TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 649
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....ribunal directed e-filing of the Appeal to clarify correct position of law. 2. The Appellant claims that he was Resolution Professional of "Wig Associates Pvt. Ltd." - Corporate Debtor. The Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Mumbai) had admitted CP 1214/IBC/NCLT/MB/MAH/2017 under Section 10 of Insolvency and Bankruptcy Code, 2016 (IBC - in short), on 24th August, 2017. The Resolution Plan submitted by Mr. Mahendra Wig was approved by Committee of Creditors (COC - in short) on 20.04.2018 and was placed before the Adjudicating Authority for approval. The Adjudicating Authority approved the Resolution Plan vide Impugned Order dated 4th June, 2018 (Annexure - 1A - Page 39). The present Appeal is with regard to such Impugned Order. 3. The Appellant claimed that after this Tribunal had given Orders dated 1st August, 2018 he had sought clarification from IBBI (Insolvency and Bankruptcy Board of India) and after the Orders were passed on 11th January, 2019, the present Appeal is filed in order to resolve the legal controversy. The Appellant claims that the Impugned Order may be set aside/affirmed. 4. It is stated that the earlier Appeal was filed by IBB....
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.... (Amendment) Act, 2017 No.8 of 2018" (Amendment - in short) was passed. The Adjudicating Authority was aware that the amendment provided that the amended Act shall be deemed to have come into force on 23rd November, 2017 (the date of the Ordinance). Impugned Order shows that in spite of being aware of such Ordinance and Amendment, the Adjudicating Authority went into an exercise of interpreting this Section and went on to observe that Creditors/Stakeholders must be aware of the Rules at the commencement of the game/proceedings. It observed that "CIRP is a process and can be said to be that the process is nothing but continuous of one proceeding, which commences from the date of "Admission" of an Application Order either under Section 7, 9 or 10 and it ends till the Order is passed under Section 31 approving the Resolution Plan or under Section 33 by initiating "Liquidation"." The Adjudicating Authority recorded opinion that the CIRP had commenced and Resolution Professional had invited expression of interest which resulted into submission of Resolution Plan by the Resolution Applicant and thus, according to Adjudicating Authority "the same is to be dealt with as per the provisions ....
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....s entitled to file the Resolution Plan in view of Section 240A of IBC which was brought into force with effect from 6th June, 2018 "while the Impugned Order was passed on 4th June, 2018". The Respondent No.1 is also arguing that acceptance of the Resolution Plan was discretion of the COC and thus, the same cannot be interfered with. 9. The Respondent No.3 - IBBI has strongly opposed the process adopted by the Appellant while conducting the CIRP. According to the Respondent No.3, the Resolution Applicant - Mr. Mahendra Wig was barred under Section 29A of the IBC to even propose Resolution Plan. It is to be stated that the scheme of IBC does not contemplate treating One Time Settlement offers as Resolution Plan and thus the OTS as offered by Mr. Mahendra Wig could not have been accepted. According to the Respondent No.3, the Appellant has conducted the CIRP against the provisions of IBC and the Regulations and thus the Resolution Plan deserves to be set aside. 10. Respondent No.3 claims that Mr. Mahendra Wig who proposed the OTS was a personal guarantor for the loan taken by the Respondent No.1 Company. He was not eligible to be Resolution Applicant. According to Respondent No.3, S....
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....to a Resolution Plan and thus the whole process was vitiated. 12. Section 29A deals with persons not eligible to be Resolution Applicants. There is no dispute that earlier an Ordinance was issued on 23rd November, 2017 to stop such ineligible persons (as under Section 29A) from becoming Resolution Applicants and subsequently, the Act came to be passed in this regard and 29A of IBC has become part of the Code. 13. Annexure - 14 (Page - 240) Minutes of the third COC dated 5th April, 2018, shows Mr. Mahendra Wig and Mr. Puneet Wig as representing Corporate Debtor - Wig Associates. Item 7 of the Minutes shows the Secured Financial Creditor - Bank of Baroda asking the Appellant to explore possibility of treating OTS proposal (which it had already accepted) as Resolution Plan. This was subsequent to the passing of the Ordinance and even the Amendment Act which inserted Section 29A on 18th January, 2018. The Resolution Plan of Mr. Wig who was undisputedly a related party, was accepted on 20.04.2018 in the 4th COC (Annexure - 16 - Page 248). Section 29A hits the eligibility of the persons to submit a Resolution Plan if a person falls in any of the categories as mentioned in the Section. ....
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....ext of retrospectivity of Section 29A of the IBC observed in para 98, as under:- "98. This being the case, it is clear that no vested right is taken away by application of Section 29A. However, Shri Viswanathan pointed out the judgments in Ritesh Agarwal and Anr. v. SEBI and Ors., (at paragraph 25), K.S. Paripoornan v. State of Kerala (at paragraphs 60-66),Darshan Singh v. Ram Pal Singh (at paragraph 35), Pyare Lal Sharma v. Jammu & Kashmir Industries Ltd. (at paragraph 21),P.D. Aggarwal v. State of U.P (at paragraph 18), and Govind Das v. CIT (at paragraphs 6 and 11), to argue that if a Section operates on an antecedent set of facts, but affects a vested right, it can be held to be retrospective, and unless the legislature clearly intends such retrospectivity, the Section should not be construed as such. Each of these judgments deals with different situations in which penal and other enactments interfere with vested rights, as a result of which, they were held to be prospective in nature. However, in our judgment in ArcelorMittal, we have already held that resolution applicants have no vested right to be considered as such in the resolution process. Shri MukulRohatgi, however, a....