AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 557
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....te Debtor i.e., M/s Maruti Cotex Limited. The first Respondent (R1) is the Resolution Professional of the Corporate Debtor. Second Respondent (R2) is the petitioning creditor in the Company Petition. Third Respondent (R3) is the Maharashtra Industrial Development Corporation (M.I.D.C) against whom reliefs are sought. 2. The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated by order of this Bench dated 08/05/2019 on a petition filed by R2 against the Corporate Debtor. This Bench by an order dated 02/07/2020 approved the Resolution Plan submitted by the Applicant. 3. R3 is a Government of Maharashtra undertaking which is established under the provisions of the Maharashtra Industrial Development Act, 1961 (MID Act, 1961) with the objective of ensuring planned and accelerated industrial development in the State of Maharashtra. R3 allotted Plot Nos. T-17 and T-17 (Part) respectively admeasuring 2,64,966 square meters and 57,143 square meters of land, in favour of the Corporate Debtor vide agreement of lease dated 29/03/2007. Subsequently, vide pre-determined lease deed dated 31/12/2007, R3 granted lease of the said lands/plots in favour of the Corpor....
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....s not issued 'No Objection Certificate' to mortgage the leased land, the Applicant is not in a position to avail the loan sanctioned by HDFC and to further implement the Resolution Plan. 9. R3 on 02/11/2020, issued the following letter to the Applicant: "Maharashtra Industrial Development Corporation (Adopted enterprise of the Government of Maharashtra) Date:- 02/11/2020 Ref: C80846 To, M/s Maruti Cotex Limited, 405, Maker Chamber - V, Nariman Point, Mumbai 400021. Sub:- Kagal-Hatkanangale 5 Star Industrial Area (Regarding Transfer of Plot No. T-17 and T-17 Part, area admeasuring 3,22,109 Square Meters) Sir, This is to inform you that the Plot No. T-17 and T-17 Part admeasuring 3,22,109 Square meters in Kagal - Hatkanangale 5 Star Industrial Area is in the name of M/s Maruti Cotex Ltd. J.M. Financial Asset Reconstruction Co. Pvt. Ltd. has filed a petition before the National Company Law Tribunal (NCLT), Mumbai as the land owner M/s Maruti Cotex Ltd. has been unable to pay off its debts to several financial institutions; and an order under the said petition has been passed on 02/07/2020. Vide the said order, the resolution plan made by M/s Shre....
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.... the hearing and final disposal of the present application, extend the period of implementation of the sanctioned resolution plan; f. For costs of this application. 11. The Applicant pleaded the following in support of the prayers: A. On the initiation of CIRP and on approval of the Resolution Plan, the Applicant has already pumped in money to the extent of Rs. 24.50 Crores and arranged for performance guarantee of Rs. 7.50 Crores. The balance to be infused is Rs. 45.11 Crores. B. Due to unexpected Covid-19 pandemic there is delay in the implementation of the Resolution Plan and this Tribunal by an order dated 07/09/2020 extended the time for compliance of the terms of the approved Resolution Plan until 26/11/2020. C. R3 filed claim of Rs. 2.92 Crores in the CIRP. Enquiries revealed that R3 was raising an additional demand for Rs. 16.6 Crores approximately towards transfer charges, penalty for late submission of Building Completion Certificate, etc. However, no claim was filed by R3 in respect of these dues during CIRP. D. The Resolution Plan provides for Rs. 50 Lakhs towards the debt of Operational Creditors out of which Rs. 2,67,226/- was paid to R3 as per the Res....
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....his Authority is binding on all stakeholders including R3. 12. Respondent Nos. 1 & 2 did not file any reply to the Application, no relief is claimed against them however, they took part in the hearing. Reply of R3: 13. Respondent No. 3 filed reply to the Application and submitted as below: A) Upon the completion of CIRP, which came to an end on the approval of the Resolution Plan, this Application filed under section 60(5)(c) of the Code, cannot be decided by this Tribunal and this Tribunal does not have jurisdiction to decide the questions raised by the Applicant. The Code itself is not applicable and only the general law is applicable. B) R3's dues as enunciated in the letter dated 02/11/2020 are squarely covered under Regulation 31(b) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and were required to be paid to R3 under the Resolution Plan. C) R3 was precluded from re-entering and retaking possession of the leased plots in view of Section 14(1)(d) of the Code. Hence R3 could not lease the plot to other potential lessee(s) and the rights of R3 has been prejudicially affected. ....
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....lead to manifest and irreconcilable absurdity. Therefore, the Tribunal does not have jurisdiction under Section 60(5) of the Code and is not a forum to determine the validity of the levy by R3 which necessarily arises after completion of CIRP of the Corporate Debtor. I) The Applicant's submission that the applicability of transfer fee is attracted only when there is transfer of shareholding and not when there is fresh issue of share is wholly misconceived and opposed to the R3's circulars. J) Further the question whether the levy is attracted only upon the transfer and not upon the issue of shares effecting a change in shareholding cannot be decided by NCLT. K) The Applicant's contention that the change in shareholding is effected by the operation of law and is binding on R3 as provided under Section 31 of the Code is hopelessly flawed and misconceived. Change in shareholding is pursuant to the voluntary acquisition of shareholding of the Corporate Debtor by the Applicant. Such acquisition is not mandatory under any law. The consequent change is also not due to operation of any law but it is pursuant to the act of parties i.e., the Corporate Debtor issuing shares to the Resol....
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....orate debtor or corporate person. (b) Any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India, and (c) Any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code." 16. R3 submitted its claims after the approval of Resolution Plan. R3 was aware of the CIRP and had filed the claim of Rs. 2.92 Crores as an Operational Creditor before the Resolution Professional. The claim has been dealt with in the Resolution Plan. 17. Presently the R3 has made a claim of Rs. 3.50 crores approximately, after the approval of Resolution Plan without giving any details thereof. It should have claimed the same before the Resolution Professional as an operational debt if it related to the pre-CIRP or as CIRP costs if it was incurred during the CIRP. No explanation is forthcoming for not claiming the same as indicated. In any case, since no claim has been made at the appropriate stage, this cannot be fastened to the Applicant after the approval of Resolution Plan. 18....
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.... representative under [subregulation (8)] of regulation 16A; (ab) out of pocket expenses of authorised representative for discharge of his functions under [section 25A]; (b) amounts due to a person whose rights are prejudicially affected on account of the moratorium imposed under section 14(1)(d); (c) expenses incurred on or by the interim resolution professional to the extent ratified under Regulation 33; (d) expenses incurred on or by the resolution professional fixed under Regulation 34; and (e) other costs directly relating to the corporate insolvency resolution process and approved by the committee." 24. An ordinary scanning of the above Section and Regulations demonstrates that by no stretch of imagination, the above claim by R3 in its letter dated 02/11/2020, in response to the request made by the Applicant for the issue of 'no dues certificate' and 'no objection certificate' for creating charge, can be classified as Corporate Insolvency Resolution Process costs. The discussion regarding the nature of the claims in the following paras will also contribute to the above proposition. 25. R3 claimed Rs. 12,32,85,400/- and Rs. 7,05,41,900/- as Renewal fees and T....
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....o make a claim from the Successful Resolution Applicant. 28. R3 submitted that there is no conflict or inconsistency between the MID Act and the Code. It is also submitted that the Code cannot override any other law listed under exclusive purview of the State under List 2 of Schedule VII of the Constitution of India. This is not an issue here. The issue here is, whether the action of R3 in making delayed claim with the Successful Resolution Applicant is in order or not. The answer would have to be an emphatic no. Hence there is no necessity to analyse whether Code overrides MID Act or not. 29. It is also not in doubt that required approvals have to be given by the concerned authorities under the relevant laws and rules framed thereunder. However, no authority can deny the renewal of licence or lease, on the ground that past dues are not paid, even without making a claim (water charges) during CIRP. In respect of Transfer and Renewal fees, we have adduced reasons how the belated claim made is not in consonance with the provisions of the Code. 30. In this regard it is apt to refer the judgement of the Hon'ble Supreme Court in the case of Committee of Creditors of Essar Steel India....