TaxTMI 
TaxTMI 
2021 (2) TMI 882
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.... (a) The Applicant is the Assignee of the Janata Sahakari Bank Limited, Financial Creditor. The Petition was admitted vide order dated 4-8-2020 by this Tribunal which is annexed at pp. 15-23, Exhibit 'II' of IA and Mr. Vishram Narayan Panchpor was appointed as an Interim Resolution Professional (IRP) to carry out the function under the I&B Code. (b) Subsequently the Financial Creditor has unconditionally and irrevocably assigned the loan together with the underlying security interest with respect to the Corporate Debtor to the Applicant vide its Assignment Agreement dated 21-8-2020 which is annexed at pp.26-59, Exhibit 'III' of IA, executed between the Financial Creditor and Applicant in terms of section 5(1)(b) of the SARFAESI Act, 2002. (c) The Financial Creditor vide its letter 21-8-2020 which is annexed at p.60, Exhibit 'IV' of IA, informed the IRP along with copy of Assignment Agreement dated 21-8-2020 and intimated the identity of the Assignee as per Rule 28 of IBBI (Insolvency Resolution Process of Corporate Person), 2016. (d) Then after, the Applicant, vide its email dated 25-8-2020 which is annexed at p.61, Exhibit 'V&....
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....d certifying the constitution of CoC before this Tribunal on 27-8-2020 (i.e. a day prior). 4. Mr. Vishram Narayan Panchpor, Interim Resolution Professional, filed his affidavit in reply dated 12-9-2020 and submitted as under: (a) The IRP stated that the Applicant relied upon section (5) of SARFAESI Act, 2002 which has no application to the present proceedings under I&B Code, 2016. The only option given to an asset reconstruction company upon acquiring the financial assets of an originator is with respect to obtaining the prior consent of such originator before filing substitution application and certainly does not give the Applicant an option whether to file a substitution application or not. (b) This Tribunal has passed an admission order which is annexed at pp.96-99, Exhibit 'L' of reply, in CP (IB) No. 3619/2018 filed under section 7 of I&B Code, 2016 by TJSB Sahakari Bank Limited against the same Corporate Debtor. TJSB Sahakari Bank Limited is a member bank of consortium of banks of which the Financial Creditor in the present matter was the lead Bank. In this case, the Applicant has entered into a Deed of Assignment with TJSB Sahakari Bank Limited, ....
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....p.91-93, Exhibit 'I' of reply contending the constitution of CoC is legal and convened strictly in accordance with the law. (h) On the 4-9-2020, this Tribunal directed to the Applicant to add the CoC as necessary party to the Application and accordingly the Application was amended and served upon the CoC on 6-9-2020 by the Advocate's letter of the Applicant. 5. Mr. Amir Arsiwala, Learned Counsel of CoC has filed affidavit and submitted as under: (a) The Application filed by the Applicant is not maintainable. The Assignment agreement filed by the applicant purported to have been executed on 21-8-2020. This document shows that it evidences of stamp duty Rs. 100/-. As per Maharashtra Stamp Act, 1958, agreement of this nature require stamp duty of 0.1% of the amount of debt being assigned subject to cap of Rs. 1,00,000/-. In the absence of appropriate amount of stamp duty being paid the said Assignment Agreement cannot be taken into cognizance. (b) It is submitted by the Learned Counsel for the CoC that the amount owed by the Corporate Debtor towards the Original Petitioner as well as the other consortium members arises from an award passed by ....
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....s not become a contract, namely, that it is not enforceable in law, unless it is duly stamped. Therefore, even a plain reading of section 11(6A), when read with section 79(2) of the 1996 Act and section 2(h) of the Contract Act, would make it clear that an arbitration clause in an agreement would not exist when it is not enforceable by law." 6. Written Arguments on behalf of the Applicant/Assignee are as follows: (a) There are two option available to the Petitioner to seek withdrawal of the Petition. First being before constitution of CoC and second after constitution of CoC. In the present case the Applicant was made request to the IRP for withdrawal before constitution of CoC. However, the IRP deliberately proceeded to constitute the CoC. (b) It is admitted position that the request was initially made, by seeking the details of expenses on 25-8-2020 at p.61 and as on that date no CoC was constituted. (c) As far as substitution is concerned, admittedly, Applicant is assignee of Janata Sahakari Bank, the original Financial Creditor who is the Applicant in the Petition. Regulation 2(1)(a) defines applicant which means the person filing an application un....
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....Act, 2002 and section 2(g) of Recovery of Debts and Bankruptcy Act, 1993 and inter alia includes not just the uncrystalized debt but the debt in the form of award also. Therefore, the award as well as the decree with respect to the debt can be assigned. 7. The submissions on behalf of IRP are as follows: (a) The Applicant is not entitled to file the Form FA or seek withdrawal of the original Petition as the Applicant is the "Applicant". Section 12A r/w Regulation 2(1)(a), 30A, states that the Applicant can withdraw the original Petition. Relying on the Judgment in Feroze N. Dotivala v. P.M Wadhawani [2003] 1 SCC 433 para 13, Regulation 2(1) defines an Applicant in the following words: "'Applicant' means the person(s) filing an application under section 7, 9 or 10, as the case may be;" (b) As regards to the contention of the Applicant based on section 5A of SARFAESI Act, 2002, it is submitted that reliance on the said provision is misplaced. There is no dispute with the contention that the assignee does not need to come on record in every proceeding and the assignor can continue with the proceeding for the be for the benefit of the assigne....
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....per the timelines that are specified, a committee of creditors can be appointed at any time within 30 days from the date of each case." "53. The main thrust against the provision of Section 12A is the fact that ninety per cent of the committee of creditors has to allow withdrawal. This high threshold has been explained in the ILC Report as all financial creditors have to put their heads together to allow such withdrawal as, ordinarily, an omnibus settlement involving all creditors ought, ideally, to be entered into. This explains why ninety per cent, which is substantially all the financial creditors, have to grant their approval to an individual withdrawal or settlement. In any case, the figure of ninety per cent, in the absence of anything further to show that it is arbitrary, must pertain to the domain of legislative policy, which has been explained by the Report (supra). Also, it is clear, that under section 60 of the Code, the committee of creditors do not have the last word on the subject. If the committee of creditors arbitrarily 102 rejects a just settlement and/or withdrawal claim, the NCLT, and thereafter, the NCLAT can always set aside such decision under ....
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....se is demonstrative of the consequence of such an interpretation. The Form FA was submitted to the IRP on 26-8-2020. If a withdrawal application was made to the NCLT within 3 days, a withdrawal pre-CoC constitution would have been possible. However, by constituting the CoC on 27-8-2020, the IRP has sought to defeat the attempt. He could not have done so. The law mandates that what is to be filed in the NCLT is an application under Regulation 30A(1)(a). It therefore necessarily requires the IRP to not constitute the CoC once the Form FA is submitted to him. Otherwise, in every case, an IRP upon being furnished with a Form FA, would proceed with CoC constitution and withdrawal under Regulation 30A(1)(a) r/w section 30A(3) would become impossible. The CoC constitution cannot take precedence over the right of withdrawal under section 12A r/w Regulation 30A(1)(a). Findings & Conclusion: 10. We have gone through the documents submitted by the parties and heard the arguments of Learned Counsel of applicant assignee of financial creditor, Resolution Professional, CoC and Member of suspended Board of Directors. The Bench observed that the Interim Resolution Professional has acted fair....