TaxTMI 
TaxTMI 
2021 (3) TMI 579
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....dicating Authority. The CIRP of the Corporate Debtor commenced vide order dated 10.10.2019 and Mr. Balady Sherkar Shetty was appointed as the Interim Resolution Professional. The Committee of Creditors (CoC) in its first meeting held on 25th November 2019, appointed Mr. Shetty as the Resolution Professional. Submissions made by Applicant by way of Interlocutory Application: 3. The Applicant submits that the Resolution Professional published the invitation for Expression of Interest (hereinafter referred to as "EoI") in terms of Section 25(2)(h) of the Insolvency and Bankruptcy Code (the IB Code) in English Newspaper 'Business Standard' and local newspaper 'Lokmat' in Mumbai on 18.01.2020, wherein the last date for submission of EoI was 10.02.2020 and for submission of Resolution Plan was 05.04.2020. 4. The Applicant submits that the Resolution Professional received EoI and thereafter shortlisted four eligible applicants to be included in the Provisional List of Prospective Resolution Applicants. Thereafter the Applicants on 20.02.2020 received an Email from the Resolution Professional which included an attachment consisting of the names of eligible and ineligible applicant....
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....be in the PRA list. Hence DSKL was not included in the said final list issued by the former Resolution Professional after due consultation with the CoC of the Corporate debtor. 9. Aggrieved by the aforesaid decision of the Resolution Professional, the Applicant on 15.06.2020 sent an email captioned "Objection to inclusion of Dwarkadhish Sakhar Karkhana Limited to the provisional list of eligible prospective resolution applicants for KGS Sugar and Infra Corporation Limited". On 16.06.2020 the Applicant received a reply email from the Resolution Professional. 10. The Applicant submits that in the manner in which the CIRP conducted by the Respondent is not only reeking of bias but full of arbitrariness as evident from the fact that the Respondent was appointed as RP by this Tribunal, vide its order dated 27.05.2020 and the Respondent has claimed that he took office of the RP of the Corporate Debtor from 27.03.2020. It is submitted that such assumption of the Respondent to take control from 27.03.2020 itself shows that the Respondent has some ulterior motives. Further, within seventeen days from the appointment of the Respondent as the Resolution Profession of the CD, the said DS....
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.... the resolution professional has no adjudicatory powers." And in the instant case the Resolution Professional amidst the pendency of an Application filed by the DSKL before this Tribunal could not have added DSKL in the PRA list in haste. vi. Application the inclusion of the said DSKL in the list of eligible resolution applicants is biased as it can be seen that the Respondent without waiting for the outcome of the Application preferred by DSKL proceeded to create a new provisional list when a final list of resolution applicants was already prepared by the former Resolution Professional; vii. Further, the Respondent on 05.06.2020 also caused the extension of date for submission of the Resolution Plan to 13th of July so that he could include DSKL in the provisional list. viii. As per the approved Process Flow Document and Form G the Resolution Professional could have only changed/cancelled the timelines for submission of Resolution Plan and could not alter/cancel the whole exercise which was already completed by the former Resolution Professional. ix. It is further submitted that in the response to the objections raised by the Applicant, the Respondent nev....
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....ion authorising Mr. Ranjeet Padmakar Mulay to file the Application on behalf of the Applicant. In fact, there is not even averment in the Interlocutory Application or the Affidavit in support of the Application which states or suggests that Mr. Mulay, who has digitally signed the Application on behalf of the Applicant, is in fact an authorised representative of the Applicant. 15. The Application is therefore defective and not maintainable before this Tribunal. Therefore, it should be summarily dismissed. 16. The Respondent also submits that alternatively the Application suffers from non-joinder of DSKL as a necessary party. 17. The Hon'ble Supreme Court in Udit Narain Singh Malpaharia v. Member, Board of Revenue, Bihar and Ors., AIR 1963 SC 786, while dealing with who the necessary parties are, has held as follows: "That a party against whom relief is sought, should be named in the petition. It is equally clear that all parties affected by that order should also be necessary parties to the petition... It would be against all principles of natural justice to make an order adverse to them behind their back and any order so made could not be effective one. They were,....
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....mit a Resolution Planfor the Corporate Debtor. 21. On 23rd March 2020, DSKL addressed an e-mail to the members of the CoC requesting them to re-consider the erstwhile RP's decision in rejecting the EoI of DSKL and to allow it to submit a Resolution Plan for the Corporate Debtor. DSKL also annexed several documents to prove its eligibility and worthiness to participate in the Resolution Process of the Corporate Debtor. 22. The DSKL by way of e-mail dated 2nd April 2020, once again requested the erstwhile RP to reconsider its decision. The erstwhile RP by way of his e-mail dated 2nd April 2020 stated that DSKL's request will be placed for consideration before the CoC during their meeting to be held on 3rd April 2020. 23. During the 7th CoC meeting, which was held on 3rd April 2020, the erstwhile RP, while placing the issue of the belated EoI submitted by DSKL and its request to be allowed to submit a Resolution Plan for the Corporate Debtor, for the CoC's consideration, stated the following: i) Accepting the EoI of DSKL would entail issue of fresh Form G resulting in further delay of 45-60 days of CIRP period; ii) Majority of the shortlisted Resolution Appl....
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....icalities, the rejection of Resolution Plan even without looking into its merits, is certainly an act which shall go against the very spirit of the Code and may even result in a huge loss to the Company. Any Regulation which does not anticipate such a situation and if the same comes in the way of proper justification and implementation of the principles of the Code, the same need not be considered nor can be treated as an impediment in the implementation of the Code. 9. For all the aforementioned reasons we are of the considered view that the spirit of the Code is first and then comes the other things. The rejection of the Resolution Plan by the CoC even without opening the envelope containing the Resolution Plan on the ground that the same is submitted after the expiry of the stipulated time fixed by the CoC, is certainly against the law/Code and we hereby direct the Respondent to forthwith consider the Resolution plan of the Applicant on its merits and judicious decision may be taken in the best interest of the parties concerned. The Application is allowed." 27. The Respondent submits that although the order was in relation to late submission of a resolution plan, the....
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....low this Application." 29. The Respondent submits that in these unprecedented times of global economic slowdown, particularly in India, it is going to be difficult to find adequate number of resolution applicants to rescue corporate persons as it is even sits on India Private Limited, one of 4 eligible PRAs of the Corporate Debtor, dropped out from the Resolution Process on 6th May 2020 due to undisclosed reasons. Therefore, it is in the interest of the Corporate Debtor to receive as many Resolution Plans as possible from eligible PRAs for maximisation of value of its assets and for arriving at the most viable plan to rescue the Corporate Debtor. 30. The 180 days of CIRP of the Corporate Debtor has not expired yet in view of the lockdown. The Order dated 30th March 2020 passed by the NCLAT in Suo motu - Company Appeal (AT) (Insolvency) No. 01 of 2020 and the Regulation 40C of the CIRP Regulations, permits for the period of lockdown to be excluded while computing the timeline of CIRP of the Corporate Debtor. In the State of Maharashtra, the lockdown lasted for 99 days i.e. from 24th March 2020 to 30th June 2020. Upon exclusion of the said period of lockdown, the 180th day of C....
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....) and Jai Hind Sugar Private Limited by way of their e-mails dated 18th June 2020 and 20th June 2020, respectively. The objections raised by the PRAs were limited to the intention of legislature under Regulation 36A (6) of the CIRP Regulations. No other objections were raised, or any supporting documents were produced by the PRAs. The Respondent duly responded to the objections raised by Hemant Hari Dhatrak and Jai Hind Sugar Private Limited by way of his e-mails dated 19th June 2020 and 20th June 2020, respectively. 37. The Respondent, after giving due consideration to the objections raised by Hemant Hari Dhatrak and Jai Hind Sugar Private Limited, decided to reject them as well and proceed with the inclusion of DSKL in the prospective list of eligible PRAs. 38. On 20th June 2020, the Respondent issued the updated final list of eligible PRAs of the Corporate Debtor to the CoC of the Corporate Debtor, in compliance with Regulation 36A (12) of the Regulations. The Respondent submits that the updated final list of eligible PRAs now had an inclusion of DSKL's name and the exclusion of the name of Sitson India Private Limited. The updated final list of eligible PRAs of the Corpor....
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....ain acts from its preview. Therefore, except the excluded acts the managing director has power and privilege of conducting the business of Company in accordance with the Memorandum and Articles of Association of the Company. The institution of the emit on behalf of the Company by the managing director is deemed to be within the meaning of "substantial powers of management" since such a power is necessary and incidental for managing the day-today affairs and business of the Company. Therefore, by virtue of provisions of Section 26 the suit instituted by the Managing Director is deemed to be within his power and authority. The suit is obviously filed for the benefit of the Company. In that view of the matter, the contention that the Managing Director had no authority to file a suit is untenable and the same is rejected" 41. Further, the Applicant submits that on 24.06.2020 a Board Resolution was passed by the board of directors of the Company authorizing Mr. Ranjeet Mulay to be file proceedings on behalf of Gangamai Industries & Constructions Limited before this Hon'ble Tribunal but the same was inadvertently missed to be annexed in the Interlocutory Application. 42. The Applic....
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....it a Resolution Planfor the Corporate Debtor stated that "accepting the EoI of DSKL would entail issue of fresh Form G resulting in further delay of 45-60 days of the CIRP period......" 46. Thereafter giving due considerations to the aforesaid points the CoC resolved that "approval of CoC be and is hereby accorded to reject the request of M/s DSKL for submitting the Expression of Interest after due date i.e 10th February 2020 as per Regulation 36A (6) and RP be and is hereby authorized to communicate the decision to M/s DSKL accordingly". And subsequently via an email dated 9th April 2020 the erstwhile RP communicated the CoC's decision to DSKL. 47. With reference to contention that no express or implicit extension is taking place and no fresh form G is required and the inclusion will not affect others, The Applicant submits that, when the Respondent is changing the rules as per his own whims and fancies then at the same time such changes are needed to be in a uniform and fair manner to everyone. It is a trite law that the rules of the games cannot be changed in between. The Applicant also submits that if the Respondent want to twist and turn the procedures then he should mig....
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.... the Application. The Application can very well be decided in its absence. 52. The Hon'ble NCLAT in the matter of Kotak Investment Advisors Limited Vs. Mr. Krishna Chamadia (Resolution Professional in the matter of Ricoh India Limited) and Ors. CA (AT) (Ins) No. 344 - 345 of 2020 decided on 05.08.2020 observed as under. "23. The Resolution Plan submitted by the Appellant was opened on 9th January 2019, and the fundamentals of the plan and offer made by Appellant were disclosed to all the participants, including the Resolution Professional. After this, no further fresh bid or offer could have been accepted or considered. But, the RP illegally and unlawfully received EoI from Kalpraj Dharamshi & Rekha Jhunjhunwala on 27th January 2019, i.e. after the expiry of the deadline for submission of EoI." "27. It is also noticed that two Resolution Plans which were submitted within the deadline, were under consideration before the CoC. But before taking any decision on these Plans, the Resolution Professional accepted two other Resolution Plans, after the expiry of the deadline for submission of the Resolution Plan. If the Resolution Professional, on the advice of CoC had....