TaxTMI 
TaxTMI 
2019 (5) TMI 1815
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.... CIR Process of the Corporate Debtor afresh, etc. 3. I.A. No.221 of 2019 is filed by Shri R. Kiran Gupta, the Authorised Representative of M/s.Peepul Capital Fund III LLC ('Applicant') under Sections 47 read with 45 and 48 of the IBC, 2016, by inter alia seeking to restore the position of the Corporate Debtor as it existed before such undervalued transactions as mentioned in the Application; to conduct forensic audit in relation to the undervalued transactions involving Corporate Debtor, etc. 4. Brief facts of the case, which are relevant to the issue in question, as mentioned in applications, are as follows: (1) The instant Applications are filed by Mr.R.Kiran Gupta i.e. the Authorized Representative of PEEPUL Capital Fund III LLC i.e. the "Applicant" a private equity fund incorporated under the laws of Mauritius. Mr. R.Kiran Gupta and he has been duly authorized to file the instant Applications by virtue of Board Resolution dated 19.03.2018. (2) It is stated that Mr.P.SadanandaMaiya, Mr.P.SudarshanMaiya and Mrs.SunandaMaiya were the Promoters and Shareholders of the Corporate Debtor. In May 2016, Mr.P.SadanandaMaiya, Mrs.SunandaMaiya and Mr.P.Sudar....
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....Directors of the Corporate Debtor; the Promoters of the Corporate Debtor took mischievous and fraudulent steps of mismanaging the affairs of the Corporate Debtor by stopping to make payments of the legitimate dues to the Labor Contractor and the Banks; closing the Factories of the Corporate Debtor situated at Sy.No.65/3, 66/3, KagallaHalli, HarohalliHobli, Kanakapura Taluk, Ramanagar District -562112 on 05.04.2018, without providing the Lock Out Notice to the Workmen as applicable under law. The Promoters of the Corporate Debtor knew that the Directors appointed by the Applicant would resign to prevent any liability. Accordingly, the said acts (of mismanaging the affairs of the Corporate Debtor) were done by the Promoters of the Corporate Debtor to make the Directors appointed by the Applicant resign from the Directorship of the Corporate Debtor as well as MRPL so as to ensure that the Promoters get complete control of the Corporate Debtor and MRPL, to give effect to their mischievous and devious goal of defrauding and causing wrongful loss to the Applicant and ensuring unjust enrichment for themselves. (5) In pursuant to the notification issued by the Resolution Professio....
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....e 21 of the Code of Conduct appended to the First Schedule to the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, ("Regulations") a duty has been cast on the Resolution Professional to ensure confidentiality of the information relating to the insolvency resolution process. The said clause reads as under: "21. An insolvency professional must ensure that confidentiality of the information relating to the insolvency resolution process, liquidation or bankruptcy process, as the case may be, is maintained at all times. However, this shall not prevent him from disclosing any information with the consent of the relevant parties or required by law". (8) Further, Circular No. IP(CIRP)/007/2018 dated February 23, 2018 while substantiating upon the confidentiality obligation under Clause 21 of the Code of Conduct inter alia notes as follows: "33 The disclosure of information, except as provided for in the Code, or rules, regulations or circulars issued thereunder, is restricted. Unauthorised access to or leakage of such information has the potential to impact the processes under the Code. An Insolvency Professional, whether act....
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....the value of the assets of the Corporate Debtor and reduce haircuts; as the prospective bidders who had access to the Information Memorandum were providing bids which were closer to the liquidation value rather than a value (based) on a going concern basis. (11) It is alleged that the entire CIRP is vitiated by fraud committed by the Promoters of the Corporate Debtor in connivance with the Resolution Professional. More over the appointment of Mr.C.R.Murali as the Statutory Auditor in MRPL by the Promoters of the Corporate Debtor pursuant to him acting for the Resolution Professional cannot be a matter of co-incidence and establishes beyond reasonable doubt the nexus between the parties i.e. the RP and the Promoters of the Corporate Debtor. (12) The Applicant herein a member of the Corporate Debtor and is therefore eligible in view of Section 47 of the Code to report to this Tribunal any suspicious transactions involving the Corporate Debtor which are undervalued in nature and seek the reliefs as set out in Sections 45, 47 and 48 of the Code. Facts in relation to the Valuation of the Corporate Debtor, MRPL and the Brand 'Maiyas': (13) The ....
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.... determine the losses suffered by the Corporate Debtor and the profits made by the Promoters of the Corporate Debtor. (15) Therefore, it is contended that the entire process of CIRP was conducted in a non-transparent, collusive and biased manner and thus it is vitiated by fraud. 5. The instant application is opposed by the Resolution Professional by-filing Statement of Objections dated 11.04.2019, by inter alia contending as follows: (1) The Application is not maintainable either in law or on facts and it has no locus standi to prefer the Application at this stage and all the allegations are frivolous and untenable. The intention of the Applicant is to stall the CIR process and is made with the intention to lower down the value of the Corporate Debtor and the entire CIRP in question will become useless. (2) The Third Meeting of the Committee of Creditors held on 04.12.2018 has already considered with regard to the issue of Disinvestment of Shares held by the Corporate Debtor in the erstwhile Subsidiary, M/s.Maiyas Restaurants Private Limited. Therefore, the issue was duly considered and found that the allegations made by the Applicant found to be basel....
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....t the non obstante clause in Section 60(5) is designed for a different purpose, that is to ensure that the NCLT alone has jurisdiction when it comes to applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings. (3) The Karnataka Bank Ltd., is one of the members of the Committee of Creditors (CoC) in this matter. Karnataka Bank Ltd. is also a financial creditor with 96.01% voting share and admitted credit amount of over Rs. 77 Crores in Maiyas Beverages and Foods Pvt. Ltd. (MBFPL) in the year 2018 itself. ICICI Bank is the other financial creditor with 3.99% voting share and admitted credit amount of over Rs. 3 Crores in the year 2018 itself. ICICI Bank is also one of the members of the CoC. The other members of the CoC are the related parties with no voting share. It is submitted that under the IBC, 2016, the Resolution Professional acts under the instructions of the CoC and the Resolution Professional is accountable to the CoC. The Resolution Professional has examined the transactions to which the Applicant has raised objections and pla....
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.... IRP/RP appointed by the Adjudicating Authority, however, subject to consideration of all issues by the Committee of Creditors and final supervising power conferred on the Adjudicating Authority. It is also settled position of law that Court/Tribunal, in the normal circumstances, would not interfere over the decision taken by the concerned authority, basing on their commercial wisdom. 10. As stated supra, the Adjudicating Authority has discussed various allegations made by the Applicant, in the comprehensive common orders dated 10th May, 2019 passed in I.A. No.98 of 2019 & I.A. No.222 of 2019; and also order dated 10th May, 2019 passed in I.A. No.210 of 2019 &CP(IB) No.121/BB/2018, and found the Resolution Plan submitted by the Akashika Foods Private Limited is eligible to be approved, and thus the Resolution Plan was approved. The Petitioner though participating in the CIR Process, did not come with the higher proposal than the successful Resolution Applicant. However, the Applicant is raising many allegations with regard to the affairs of the Company and these allegations were already considered by Resolution Professional and CoC and the Adjudicating Authority as detailed in t....