TaxTMI 
TaxTMI 
2021 (4) TMI 1144
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.... this common order. IA/3896/2020 & IA/3898/2020: 3. Both of these applications are being preferred to seek permission to file application under Section 12A of the Insolvency and Bankruptcy Code 2016 read with Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 for withdrawal of Corporate Insolvency Resolution Process against the Corporate debtor. 4. The brief facts, as per averments, leading to filing of the application IA/3896/2020 are as under: i. That the application is filed by financial creditors/applicants seeking permission of the Adjudicating Authority to allow the financial creditors/applicants to file the application under section 12A of the IBC 2016 read with regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, for withdrawing the petition bearing No. (IB) 1781 (ND) 2018 titled as 'Ms. Indu Kumar Vs. Saha Infratech Private Limited' filed under section 7 of the IBC 2016. ii. That the Section 7 IBC 2016 application was admitted by this Adjudicating Authority vide order dt. 28....
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....uthority vide order dated 28.02.2020 has never taken charge/commenced the Corporate Insolvency Resolution Process of M/s. Saha Infratech Private Limited, and thus, no public announcement of notice as required under Section 15 of the Code was made. Thus, no Committee, as being provided in Section 21 of the Code, has been formed. Thus, the applicants herein are seeking withdrawal of their application under Regulation 30-A. ii. That since his appointment Mr. Arun Jain, the Interim Resolution Professional (IRP), neither commenced nor acted to further the Corporate Insolvency Resolution Process of M/s. Saha Infratech Private Limited, and thus, has not incurred any expense to the knowledge of Applicants, therefore no Bank Guarantee is required to be furnished as per sub regulation (2) of Regulation 30-A. IA/3371/2020: 6. This application is preferred on the behalf of Aashray Social Welfare Society/Financial Creditors under Rule 11 of the NCLT Rules, 2016 for appointment of an Interim Resolution Professional of the Corporate Debtor. 7. The brief facts, as per averments, leading to filing of the instant application are as under: i. That CIRP was initiated against....
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.... Debtor, Saha Infratech Private Limited vide order dated 28.02.2020. ii. That the Applicant also moved a Section 7 application vide Company Petition No. IB/485/PB/2019. However, this Adjudicating Authority admitted the Corporate Debtor to insolvency and the application was disposed of. iii. That the Applicant by way of the present application seeks the appointment of an unbiased, competent and independent Interim Resolution Professional ("IRP"), as the IRP appointed by way of the admission Order dated 28.02.2020 - Sh. Arun Jain-has failed to take charge of the affairs of the Corporate Debtor, contrary to the provisions of the Code. The IRP has neither issue public announcement nor called for claims from creditors and as a consequence, failed to constitute the Committee of Creditors u/s. 18 of the Code. The IRP has reluctantly failed to run the Corporate Debtor as a going concern u/s. 20 of the Code. iv. That a total of 14 petitions u/s. 7 or 9 of the Code were clubbed and last listed together for hearing before the Hon'ble Principal Bench on 06.02.2020. While the aforesaid bunch of applications were pending adjudication, the Petitioners therein later ....
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....n'ble Tribunal feels appropriate in the facts and circumstances of the present case. IA/3896/2020 & 3898/2020: 10. Ld. Counsel appearing for the applicant submitted that the main application was admitted by this Adjudicating Authority on 28.02.2020 and Mr. Arun Jain having IBBI registration No. IBBI-/IPA-O1/IP-00590/2017-18/11029 was appointed as an Interim Resolution Professional (IRP) but he never took the charge and therefore, no public announcement as required under Section 15 of the IBC, 2016 was made by the IRP. 11. He further submitted that they also submitted Form FA to the IRP for the withdrawal of the main application but the IRP did not file the withdrawal application. 12. He further submitted in view of Regulation 30A of Insolvency Resolution Process for Corporate Persons Regulations, 2016. The IRP or RP was required to file an application within three days from the date of receipt of Form FA. 13. He further submitted that since all the three Petitioners on whose application the CIRP was initiated are presently travelling outside India, on the basis of special power of Attorney and authorization letter, the applicants have filed the present applicatio....
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.....02.2020 and Mr. Aran Jain was appointed as an IRP but it is also a fact that the said Mr. Arun Jain never took the charge of CIRP and made no public announcement as required under Section 15 of the IBC by the IRP. It is also a fact that during the pendency of these applications i.e., IA/3371/2020 and IA/3912/2020, the IRP Mr. Jain was summoned and he had appeared on 19.10.2021. For convenience, the order dated 19.10.2021 passed by this Tribunal in these IAs is reproduced below: "IA/3371/2020 & IA/3912/2020: The Counsel for the Applicant is present and prayed for appointment of new RP on the grounds that the IRP Mr. Arun Jain who was appointed vide Order dated 28.02.2020 of this Tribunal has failed to take charge of the Corporate Debtor. He has neither made the public announcement of the CD being under CIR Process nor formed the CoC till date. Further, it has been brought to our notice that an email dated 19th June, 2020 sent by the IRP Mr. Arun Jain to the Office of the Counsel for the Applicant has recorded that he had filed an Application before this Authority for Appointment of an alternative RP. Whereas, it does not appear that any such Application has been filed befo....
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...., 2016. Said provisions are quoted below: Section 12A: Withdrawal of application admitted under Section 7, 9 or 10. 12A. The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an application made by the applicant with the approval of ninety per cent voting share of the committee of creditors, in such manner as may be prescribed.] Regulation 30A IBBI (Corporate Insolvency Resolution) Regulations 2016. Withdrawal of application. (1) An application for withdrawal under section 12A may be made to the Adjudicating Authority: (a) before the constitution of the committee, by the applicant through the interim resolution professional; (b) after the constitution of the committee, by the applicant through the interim resolution professional or the resolution professional, as the case may be: Provided that where the application is made under clause (b) after the issue of invitation for expression of interest under regulation 36A, the applicant shall state the reasons justifying withdrawal after issue of such invitation. (2) The application under sub-regula....
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....be filed by the applicant on whose prayer the application under Section 7, 9 or 10 is admitted and secondly, it must be approved by 90% voting share of the CoC. The application for withdrawal application admitted under Section 7, 9 or 10 shall be filed by the applicant. 26. Similarly, Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 provides that an application for withdrawal under section 12A may be made to the Adjudicating Authority before the constitution of the committee, by the applicant through the interim resolution professional and after the constitution of the committee, by the applicant through the interim resolution professional or the resolution professional, as the case may be. And the proviso says that if the application is made under clause (b) after the issue of invitation for expression of interest under regulation 36A, the applicant shall state the reasons justifying withdrawal after issue of such invitation and Regulation 30A Sub Regulation 2 says that application under sub-regulation (1) shall be made in Form FA of the Schedule accompanied by a bank guarantee towards estimated expenses incurred on or by the interi....
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....led to initiate the CIR process and discharge his duties as required under the IBC, 2016. 30. The circumstances suggest that the IRP deliberately did not make the Public Announcement, so that the Corporate Debtor could get time to settle the matter with the Applicants, who initiated the CIR Process. Further, the aforesaid Applicants and IRP in connivance with the Corporate Debtor abused the process of law in order to avoid the strict condition of terminating the CIRP by 90% Votes of the Member of the CoC as stipulated in Section 12A of IBC, 2016. 31. At this juncture, we would like to make it clear that under Section 7 of the IBC, 2016 at the time of filing of the application, the petitioner is required to mention the name of the IRP in the application and enclose his/her consent form. Accordingly, we notice that the consent form (Form 2) was given by the IRP Mr. Arun Jain, which is at page 74 of the main petition and he was appointed IRP. Even then, Mr. Arun Jain IRP failed to perform his duties under the law and the applicants have knowingly not taken any step to file an application for his replacement. 32. Further, we observe that the applicants, who have filed the pres....
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.... may, in the first meeting, by a majority vote of not less than sixty-six per cent of the voting share of the financial creditors, either resolve to appoint the interim resolution professional as a resolution professional or to replace the interim resolution professional by another resolution professional. (3) Where the committee of creditors resolves under sub-section (2): (a) to continue the interim resolution professional as resolution professional subject to a written consent from the interim resolution professional in the specified form, it shall communicate its decision to the interim resolution professional, the corporate debtor and the Adjudicating Authority; or (b) to replace the interim resolution professional, it shall file an application before the Adjudicating Authority for the appointment of the proposed resolution professional along with a written consent from the proposed resolution professional in the specified form. (4) The Adjudicating Authority shall forward the name of the resolution professional proposed under clause (b) of sub-section (3) to the Board for its confirmation and shall make such appointment after confirmation b....
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.... of the IBC, 2016 has a provision for replacement of Resolution Professional, who was appointed under Section 22 of the IBC. Hence, in our considered view Section 27 is not applicable in this matter, because prayer is for the replacement of the IRP not the RP. Therefore, under Section 22 of the IBC, 2016, there is a provision for replacement of IRP, who is appointed under Section 16(2) or (3) of the IBC, 2016 but under this provision, the replacement can be made only with the approval of the 66% of the voting share of the financial creditors/CoC but here in the case in hand, it is an admitted fact that the CoC has not been constituted, even the public announcement as required under section 15 of IBC has not been made and the IRP has not taken the charge of the Corporate Debtor to initiate the CIR Process. 38. At this juncture, we would also like to refer to Section 16 of the IBC, 2016 which deals with the provision of appointment and tenure of the IRP and the same is quoted below:- 16-Appointment and tenure of interim resolution professional. (1) The Adjudicating Authority shall appoint an interim resolution professional on the insolvency commencement date, wit....
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....he provisions of the IBC Code, 2016 as well as Regulations thereunder and his conduct is not free from doubts. And an inference can be drawn that the IRP Mr. Arun Jain in connivance/collusion with the Corporate Debtor as well as the applicants/Financial Creditors obstructed the proceedings of CIRP and in this way, caused a serious and irreversible obstruction to the the judicial proceedings. The CIRP, which is required to be completed within the prescribed period, has been virtually kept in abeyance due to conduct of the IRP. 42. We further notice that vide order dated 19.10.2020, Mr. Arun Jain IRP was asked to explain the reasons as to why contempt proceedings should not be initiated for flouting the order of admission of the CIRP. He was also directed to file a short Affidavit by or before 23.10.2021 to explain the reasons for not initiating CIRP against the CD and the reasons why he could not inform this Authority about the same. Mr. Arun Jain IRP neither submitted the explanation as sought for nor filed the Affidavit. All this shows that the IRP not only failed to perform the duty of initiating CIRP of the CD but also disobeyed the directions given by this Adjudicating Autho....