TaxTMI 
TaxTMI 
2021 (2) TMI 13
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....12 extracts of New Phaltan Sugar Works Limited existing on GAT Nos. 62/1, 62/2, 62/3A, 62/4, 62/5A, 62/8A, 65/2, 69, 70, 71/1, 74 (11Gat Nos.) 2. The learned counsel appearing for the applicant mentioned the facts of the case. He initiated with stating about this Company Petition bearing number 2956 of 2018 was filed by one Cosmos Co-Operative Bank (hereinafter called as "the original petitioner") who was the financial creditor of M/s New Phaltan Sugar Works Limited (hereinafter referred to as "the Corporate Debtor"). This petition was filed under section 7 of the Code and was admitted by this Tribunal vide an order dated 22-2-2019 initiating Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. 3. He further stated that during the course of the CIRP, the applicant herein, in response to the IEM and the Bid Document issued by the Resolution Professional (RP), submitted a Resolution Plan to the Committee of Creditors (CoC) to which the CoC in its 9th meeting voted with 100% voting in favour of the Resolution Plan thus approving it. In this Resolution Plan, the Applicant had proposed to pay an aggregate sum of Rs. 67,61,06,870.10/- in a specified manner therewith.....
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....ed as Exhibits "D-1" and "D-2". 7. The counsel further mentioned that during the course of the hearing of the said Misc. Application No. 3271 of 2019, the Farmers were represented for the Farmer's Dues recorded in the Information Memorandum issued by the Resolution Professional which was according to the claims received by the Resolution Professional. This Tribunal, after hearing all the necessary parties to the said Misc. Application No. 3271 of 2019 and upon being satisfied that the Resolution Plan submitted by the Applicant herein complied with the requirements and provisions of the Insolvency and Bankruptcy Code, 2016 and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, approved the Resolution Plan along with Scheme of Amalgamation vide an Order dated 11-11-2019. This order is annexed and marked as "Exhibit E". 8. To this order dated 11-11-2019 of this Tribunal, there was an Appeal vide M.A. no. 1458/2019 assailed by the aggrieved erstwhile Management before the Hon'ble NCLAT which was dismissed by the Hon'ble NCLAT vide Order dated 19-12-2019. This order was further appealed in the Hon'ble S....
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....t further stated that the aforesaid fact has been recorded by the Monitoring Committee, made specifically for the purpose of looking into the successful implementation of New Phaltan Sugar Works Limited, in its meeting held on 21-4-2020. A copy of extract of the minutes of the 4th Monitoring Committee Meeting dated 21st April, 2020 is also annexed with the copy of the application and marked as "Exhibit G". It has marked each progress and implementation of the plan. This Committee consists of the Resolution Professional and the Secured Financial Creditors. Copies of the letters and/or receipts issued by the financial and operational creditors acknowledging the amount received by them from the Applicants in full and final satisfaction of their dues are annexed by the applicant and marked as Exhibit "H". 11. The Applicants further stated that much prior to the passing of the said Order dated 11-11-2019, the erstwhile promoters and/or management of New Phaltan Sugar Mills Limited i.e. the Company in liquidation had failed and neglected to pay the farmers dues and on account of the failure on the part of the promoters and/or management of Company in Liquidation the Sugar Commissioner, ....
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....of the immoveable property which now stands vested and transferred in favour of the successful resolution Applicants. 14. The applicant further showed grief that despite the receipt of the said communication from the office of the Collector, the Respondent for the reasons best known to him has not passed appropriate orders and direction for withdrawal and/or quashing and/or setting aside of the R.R.C. However, it is pertinent to note that in the meantime the Respondent has vide letter dated 19-11-2019, after an extended hearing and discussion on the Resolution Plan and it's implementation vide the Hon'ble NCLT's order issued its permission for issuance of Sugarcane Crushing Licence for the year 2019-20 in favour of the Applicant, a copy of the which is annexed at Exhibit "L". 15. The Counsel for the applicant further mentioned that on account of the Respondent's failure to pass appropriate orders and directions for withdrawal and/or quashing and/or setting aside of the R.R.C., they vide their separate letters dated 20-3-2020, 25-3-2020 and 5-6-2020 addressed to the Respondent (annexed and marked as Exhibits "M-1" to "M-3" respectively) called upon and requested it....
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....ings by investigating agencies for wrong doing of the previous management will defeat the very purpose and scheme of CIRP, which inter-alia includes resolution of insolvency and revival of the company, and also the efforts of the bank to realize dues from their NPAs would get derailed. Otherwise too, the money realized by way of resolution plan has been recovered by the banks and public financial institutions and other creditors who have lent money to the erstwhile promoters to recover their dues which they have lent to the erstwhile management for creation of moveable or immoveable assets of the corporate debtor in question and therefore, to attach such an asset in the hands of new promoters or resolution applicant ('Applicant') would only negate the very purpose of IBC and eventually destroy the value of assets. 18. The Applicants further stated and submitted that after the Order dated 11-11-2019 being passed, the Applicants in compliance of their obligation have not only paid dues as per the Resolution Plan to the Financial and Operational Creditors but have also incurred huge expenses in restarting, running and operating the Sugar plant which stand transferred and vest....
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....so far as the corporate debtor or its assets are concerned, after approval of the Resolution Plan by the Adjudicating Authority and the completion of the CIR Process, i.e. a statutory process under the IBC, there cannot be any attachment or confiscation of the assets of the Corporate Debtor by any agency. All pre-existing action initiated and/or are pending against the Corporate Debtor including any encumbrance by way of mortgage, hypothecation, charge, lien and/or any other form of encumbrance stands discharged and/or released. The Applicants further say and submit that the said immoveable property in respect of which the Respondent has issued R.R.C. was prior to the issuance of R.R.C. was mortgaged by the Corporate Debtor in favour of the Banks i.e. the Financial Creditors. Therefore, the claim of the financial creditors in respect of the said property is prior in point of time as compared to that of the Respondent. Further, issuance of R.R.C. only results in creation of a charge on the property and it does not result in transfer and/or creation of interest in the immoveable property in favour of the Respondent. Therefore, the claim and/or right of the Respondent is subservient t....
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....2 Extracts of New Phaltan Sugar Works Limited existing on GAT Nos. pursuant to the Order dated 11-11-2019. 23. The Respondent on the other hand has denied all the averments and allegations. He stated that the Corporate Debtor has failed to pay cane payment i.e. FRP (Fair and Remunerative Price) as declared by the Central Government to the farmers who had supplied their sugarcane to the Corporate Debtor during the crushing season 2017-18. As per the provisions of section (3)(3) of Sugarcane (Control) Order, 1966, the Corporate Debtor has to pay the FRP to cane supplier farmers within 14 days from the date on which the sugarcane was supplied by the farmers, which in this case, the Corporate Debtor has failed to pay within the stipulated time. After receipt of various complaints against them from the farmers regarding non payment of FRP amount, the Respondent has passed two Orders i.e. RRC (Revenue Recoery Certificate) dated 26-4-2018 for an amoun to Rs. 4786.95 Lakhs plus interest and 18-9-2019 for an amount of Rs. 138.82 pluls interest under the provisions of section 3(8) of Sugarcane (Control) Order 1966 to recover the arrears of FRP amount along with 15% interest as arrears of la....
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....g authority was not made a party to the proceedings before this Tribunal and was not given an opportunity ot represent the details of RRCs and at the stage of execution before CoC. Applicant by its letter dated 25-3-2020 agreed to pay the additional amoun if the NCLAT and/or the Supreme Court of India pass the order to that effect which means the Applicant is principally ready to pay the remaining amount and therefore, directions to be passed to the applicant to pay the FRP arrears in the interest of justice. FINDINGS We are of the opinion that the alleged act on the part of Respondent in not withdrawing and/or recalling its order of issuance of R.R.C. is causing enormous harm, loss and injury to the Applicant. The said immoveable property vests and/or stands transferred in favour of the Applicant in furtherance of the said Order dated 11-11-2019 of this Tribunal. The Applicant is deprived of the effective use of the said immoveable property on account of the aforesaid act on the part of the Respondent despite the Applicant having paid the entire amount of consideration. Also, the Applicants' title to the said immoveable shall continue to be defective till such time the said ....
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....or merely acts as an authority to recover from the said producer of sugar in a case where the producer of sugar has defaulted in paying the whole or any part of the price of sugarcane to the growers of sugarcane. The relevant provision is provided herewith: Section 3. (8): "Where any producer of sugar or his agent has defaulted in furnishing information under clause 9 of this Order or has defaulted in paying the whole or any part of the price of sugarcane to a grower of sugarcane or a sugarcane growers co-operative society within fourteen days from the date of delivery of sugarcane, or where there is an agreement in writing between the parties for payment of price within a specified time and any producer or his agent has defaulted in making payment within the agreed time specified therein, the Central Government or an officer authorized by the Central Government in this behalf or the State Government or an officer authorized by the State Government in this behalf may either on the basis of information made available by the producer of sugar or his agent or on the basis of claims, if any, made to it or him regarding non-payment of prices or arrears thereof by the concerned grower ....
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....y purpose and scheme of CIR process, which inter-alia includes resolution of insolvency and revival of the company, and the efforts of the bank to realise dues from their NPAs would get derailed. Otherwise too, the money realised by way of resolution plan is invariably recovered by the banks and public financial institutions and other creditors who have lent money to the erstwhile promoters to recover their dues which they have lent to the erstwhile management for creation of moveable or immoveable assets of the corporate debtor in question and therefore, to attach such an asset in the hands of new promoters or resolution applicant would only negate the very purpose of IBC and eventually destroy the value of assets. (8) In light of the above, it is respectfully submitted that the ED while conducting investigation under PMLA is free to deal with or attach the personal assets of the erstwhile promoters and other accused persons, acquired through crime proceeds and not the assets of the Corporate Debtor which have been financed by creditors and acquired by a bona fide third party Resolution Applicant through the statutory process supervised and approved by the Adjudicating Authority....
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....y enactment as under the said State law, the State Government may take over the management of the relief undertaking, after which a temporary moratorium in much the same manner as that contained in Sections 13 and 14 of the Code takes place under section 4 of the Maharashtra Act. There is no doubt that by giving effect to the State law, the aforesaid plan or scheme which may be adopted under the Parliamentary statute will directly be hindered and/or obstructed to that extent in that the management of the relief undertaking, which, if taken over by the State Government, would directly impede or come in the way of the taking over of the management of the corporate body by the interim resolution professional. Also, the moratorium imposed under section 4 of the Maharashtra Act would directly clash with the moratorium to be issued under sections 13 and 14 of the Code. It will be noticed that whereas the moratorium imposed under the Maharashtra Act is discretionary and may relate to one or more of the matters contained in Section 4(1), the moratorium imposed under the Code relates to all matters listed in Section 14 and follows as a matter of course. In the present case it is clear, ther....