TaxTMI 
TaxTMI 
2020 (2) TMI 300
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....nas Thomas i/b Ethos Legal for the Respondent No.5. ORAL JUDGMENT : [Per S.C. Dharmadhikari, J.] 1 By this Writ Petition under Article 226 of the Constitution of India, the petitioner seeks the following relief : "(a) That this Hon'ble Court be pleased to issue a writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, direction or order in exercise of its power under Article 226 of the Constitution of India and after calling for the records and proceedings relating to Miscellaneous Application No. 1039 of 2019 in Company Petition No.156 of 2018 and Miscellaneous Application No.691 of 2019 in Company Petition No. 1256 of 2018 and after examining such records, proceedings and the Impugned Orders (i) passed in Miscellaneous Application No. 156 of 2018 and (ii) passed in Miscellaneous Application No. 691 of 2019 in Company Petition No. 156 of 2018 dated 28th November 2019 being Exhibit 'A' and Exhibit 'B' hereto be quashed and set aside;" 2. The petitioner No.1 is Kotak Investment Advisors Limited, a company registered under the Companies Act, 1956, and the second petitioner is the Associate Director of the petitioner No.1. Both are functioni....
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....ioners is that the Plan submitted by it was opened on 9th January, 2019 and the details of the same were disclosed to all participants, including the Resolution Professional. It is their case that at that stage no further offer or bid could have been accepted. After the deadline for submission of Resolution Plan had expired, there was no question of thereafter entertaining any other Plan. However, there were two other Resolution Plans which were accepted by the Resolution Professional. Those were, inter alia, of Kalpraj Dharamshi and Rekha Jhunjhunwala. They were submitted allegedly on 13th January and 28th January, 2019, well beyond the stated deadline of 8th January, 2019. The petitioners immediately lodged their protest against this belated submission of the Resolution Plan and acceptance thereof by the Resolution Professional vide their emails dated 29th January, 2019 and 10th February, 2019. However, there are certain details revealed to the petitioner after it perused the reply filed by the respondent No.1 to their Miscellaneous Application. The petitioners, therefore, say that these facts, in addition to those narrated till paragraph 6.9, were set out by them in a Miscellane....
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.... was the first order of the Bench (a two-Member Bench of the NCLT). Thus, the Member (Technical) was aware that Miscellaneous Applications were heard earlier and reserved for orders. The Tribunal heard the Miscellaneous Application No. 691 of 2019 and closed it for orders on 19th September, 2019. The advocates of the petitioner were present at the time of hearing on 19th September, 2019, but they were not heard and objections raised by them were not taken into consideration by the members of the Bench. The petitioners say that they were not allowed to raise any objections as their Miscellaneous Application was already heard and the matter was closed for orders. It was pointed out that that the learned Member (Technical) never heard the objection to the Resolution Plan. He was privy to the papers and proceedings in relation to the sanction and he sanctioned the plan without taking into consideration any objections raised by the petitioners or any other objector. Then in paragraph 6.25, the petitioners allege that on 28th November, 2019, the Tribunal proceeded to pass the impugned order. Though the order was not pronounced in open court, it was later uploaded on the website of the Tr....
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.... from a salutary principle recognised in law. The argument is premised on the fact that principles of natural justice are part and parcel of the rule of law. These principles envisage equity, fairness and justice even in quasi judicial and judicial proceedings. They go to the root of the matter. If there is a serious breach and violation of these salutary principles, the order passed in the proceedings is null and void. Thus, from the inception these proceedings cannot be declared to be in accordance with law. Mr. Seervai contended before us that Miscellaneous Application No. 1039 of 2019 was reserved for orders. That was the petitioners' application. It appeared on at least five occasions, namely 7th, 19th and 26th August, 2019 and on 6th and 7th September, 2019 and thereafter on 20th September, 2019. The petitioners application, as is clear according to Mr. Seervai, from Exhibit-G, was heard and reserved for orders. Our attention is invited to the order made on 3rd July, 2019 and the copy of this order is at Exhibit-G, page 192 of the paper-book. Mr. Seervai submits that once these two Miscellaneous Application Nos. 1039 and 2023 of 2019 were heard fully and reserved for orders, ....
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....decided only by Mr. Shrawat who was sitting singly and there was, at the relevant time, no Bench of two Members as is now projected before this Court. Mr. Seervai says that because Mr. Shrawat is part of the Bench does not mean that the Bench comprising him can pass an order on the petitioners' Application No. 1039 of 2019. 13. Mr. Seervai has invited our attention to page 56 of the petition paper-book and particularly paragraph 4 of the impugned order to urge that the Bench proceeds on the footing that a Committee of Creditors takes a commercial decision. Such a commercial decision is required to be upheld and the Resolution Plan undergoing the scrutiny of such Committee is required to be sanctioned or approved. The Bench projects as if arguments of the petitioners were canvassed or that they were also taken into consideration. In fact, the petitioners had no occasion to participate in the hearing on Miscellaneous Application No. 691 of 2019 and they would never endorse the statement of law stated to be culled out from a decision of the Hon'ble Supreme Court by the Tribunal. The Bench proceeds on the footing that there is no dispute to the Resolution Plan placed forward before ....
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....it passed a verdict adverse to them. Surely, the petitioners cannot object when there is no prejudice. The petitioners took a chance until the Resolution Plan of respondent No.3 was approved. Once their plan was not approved, the petitioners have levelled allegations against Members of the Tribunal. In the circumstances, we should proceed to dismiss the petition. Mr. Dwarkadas also brought to our notice, page 196 of the paper-book. That is a copy of the order passed by the Tribunal on 26th August, 2019. That makes a reference to some of the applications which were heard on the occasion previous to this order. The Tribunal records that orders on these Miscellaneous Applications are also reserved and they are yet to be pronounced. Miscellaneous Application Nos. 262 and 691 are to be heard on 6th September, 2019. However, the Bench heard Miscellaneous Application No. 691 of 2019 on 19th September, 2019, and reserved it for orders. Thus, according to Mr. Dwarkadas, the matter appeared subsequent to the date on which the petitioners application is stated to have been heard and reserved for orders. In support of his contentions, Mr. Dwarkadas relies upon the order sheet as well. 16. H....
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.... comes Part II, which contains some additional definitions in section 5. The provision which has been invoked in this case by the debtor is to be found in Chapter II titled as Corporate Insolvency Resolution Process. We find that the application having been made and admitted, entails appointment of a Resolution Professional. His appointment and tenure is covered by section 16 and his duties are set out in section 18. 20. The appointment of the Resolution Professional thereafter results in constitution of a Committee of Creditors vide section 21. This Committee has the power to not only to consider the proposals, but related issues and the duties of the Resolution Professional in that regard are set out in section 25. What we have noted from the scheme of these sections is that there is a Resolution Plan which can be submitted by even a resolution applicant (section 30). Then, by section 31, there is an approval thereto. Section 32 is vital for our purpose and it says that any appeal from an order approving the Resolution Plan shall be in the manner and on the grounds laid down in sub-section (3) of section 61. Section 61 of the Code provides for appeals and Appellate Authority. ....
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....eard by a single Member Bench. The two Member Bench of the NCLT, in the impugned order, attempts to demonstrate that the petitioners did not pray for a separate order on their application and allowed their Miscellaneous Application to be heard together with Miscellaneous Application No. 691 of 2019 of the respondent Nos.2 and 3. The petitioners state that by mere reference to their application in the title to the impugned order or, by including the petitioners' advocate's name in the list of advocates who appeared for parties, does not mean that the petitioners agreed or acquiesced in the hearing of their application afresh or taking up of their application by Mr. Shrawat, together with Mr. Chander Bhan Singh, Member (Technical). Thus, the petitioners did not agree at all to their application being heard by a Bench of two Members although it was initially heard and reserved for orders by Mr. Shrawat. Merely because Mr. Shrawat was part of a Bench of NCLT does not mean that the petitioners allowed him to adopt the course that he has adopted in passing the impugned order. The petitioners maintain that in the absence of any consent or approval on their part, the course adopted by the ....
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....reed and consented to the two Members taking up the Miscellaneous Application filed by them even though on two prior occasions, it was heard by a single Member and reserved for orders. The petitioners, therefore, have clearly consented to their application be taken up by the Bench comprising two Members. Equally, they do not deny that they were present. 24. To our mind, these are disputed questions of fact and as the petitioners can file an appeal against the impugned order, they can very well include the above challenge in the Memo of the same. We are of the opinion that a writ petition would not be maintainable in this case simply because the petitioners argue that there is a serious breach and violation of the principles of natural justice and that issue goes to the root of the case. The petitioners may say that a particular principle has been violated and breached and this aspect is very serious and goes to the root of the functioning of the Tribunal and the procedure adopted by it. However, such issues would have to be considered in the backdrop of the facts. For a Writ Court to proceed and take up such a challenge, the facts have to be undisputed. In the instant case, ther....
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....e petition point towards the contrary. 25. To our mind, therefore, it would be highly unsafe to entertain this petition, all the more when the petitioners have an alternate equally efficacious remedy of filing an appeal against the impugned order in terms of sections 32 and 61 of the IBC. In the Memo of Appeal, they can always raise all grounds, including that are raised in the present petition. They can always urge before the Appellate Authority that the impugned order is a nullity because it is contrary to section 419 of the Companies Act, 2013 and Rule 150(2) of the NCLT Rules. They can always raise the plea that their consent was not obtained and in the absence of their consent, the Tribunal heard Miscellaneous Application No. 1039 of 2019 although it was fully heard prior to 19th September, 2019, and reserved for orders. Alternatively, on 19th September, 2019, the Members of the Bench did not hear the petitioners' advocate fully although he was present. All grounds being available, we do not think that in writ jurisdiction, we should interfere. That amounts to scuttling an elaborate process of resolution of disputes arising during the course of applicability of the Insolven....