TaxTMI 
TaxTMI 
2021 (7) TMI 858
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....ith the Order dated 28.07.2020 passed by the Hon'ble National Company Law Tribunal, Ahmedabad Bench, Court No. 2 (Adjudicating Authority) in I.A No. 90/ 2020 in I.A. 691 of 2019 in C.P. (I.B.) No. 397/NCLT/AHM/2018, whereby and where under in I.A. No. 691 of 2019 filed in C.P. (I.B.) No. 397 of 2018 filed by Allahabad Bank (Respondent No. 1) under Section 60 (5) of the Insolvency & Bankruptcy Code, 2016 (in short "IB Code")the Learned Tribunal have appointed a new Interim Resolution Professional, replacing the Appellant herein. The Bench while exercising its power under 'Rule 11' ofNCLT Rule, 2016 allowed in Interlocutory Application and appointed Mr. Kiran Shah as a new IRP/ RP in the CIRP proceedings. 2. The number of facts of this case is as follows: - (i) The C.P. (I.B.) No. 397 of 2018 was filed under Section 7 of Insolvency & Bankruptcy Code, 2016 by way of M/s. Abhinandan Multitrade Pvt. Ltd. / Respondent No. 4 which was admitted under Order dated 06.09.2019 and whereby the Appellant was appointed as Interim Resolution Professional. (ii) After Appellant took over the charge of IRP and made public announcement and thereafter Committee of Creditors (in sho....
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....he majority of voting share to appoint the IRP/RP so proposed by the Applicant, it is expedient to appoint an independent IRP/RP to break any kind of stalemate between the Financial Creditors. Moreover, the very object of IB Code is to complete the CIRP in the time bound manner and if the dispute with regard to the IRP will continue, in that event, the very object of the IB Code will get frustrated. The IB Code prescribes timelines for various activities of the CIRP. It is mandatory to complete a CIRP within 180 days, extendable by a one-time extension of up to 90 days [M/s. Surendra Trading Company v. M/s. Juggilal Kamlapat Jute Mills Company Limited & Ors.]. 12. Though as per Section 7 of the IB code, the Financial Creditor has the prerogative to propose the name of the IRP/RP and thereafter, they may change it by filing an application under Section 22 of the IB Code. However, to resolve this issue and to end the stalemate between the secured and unsecured Financial Creditors, this Bench in exercise of power under Rule 11 of the NCLT Rules 2016, do hereby appoint Mr. Kiran Shah as the new IRP/RP and direct him to convene the CoC meeting and complete the CIRP as early as ....
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.... the Adjudicating Authority have passed the Impugned Order invoking power under 'Rule 11' of the NCLT. So, the Impugned Order passed by the Hon'ble Adjudicating Authority cannot be sustain by law and fit to be set aside and the Appeal be allowed. 10. Submissions on behalf of the Respondent No. 1 (i) Respondent No. 1- Allahabad Bank (now Indian Bank) have also filed his Reply Affidavit during the course of the arguments. Respondent No. 1 referred to the Order dated 17.09.2020 issuing Notice Respondent No. 1 & Respondent No. 2 formulated the following questions. "Issue raised in this Appeal is that the expressed provision of law under I&B Code has been over ruled and Rule 11 of NCLT Rules, 2016 has been invoked to substitute the Appellant by another person as IRP which is legally unsustainable." (ii) Learned Counsel for the Respondent No. 1 further referred to the provisions of Rule 11 of National Company Law Tribunal Rules, 2016 ("NCLT Rules, 2016) which is reads hereunder 'Rule 11' inherent powers. "Nothing in these rules shall be deemed to limit or otherwise effect inherent powers of the Tribunal to make such Order "as may be necessary for the meeting....
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....hand, on perusal of the records, it is found that the CIRP period of 180 days expired on 4th March 2020 and, thereafter, the same was extended for further 90 days, the said period has already been expired. Ld. Lawyer Mr. Nandish Chudgar submitted that a direction may be given to convene meeting of CoC for appointment of RP. Under such circumstances, if the matter will be sent for convening the meeting of Committee of Creditors, then there is every likelihood of stalemate between secured financial creditor and unsecured financial creditor as reflected from various IAs filed in recent past. In that event, every object of the IBC will get frustrated and the CIRP cannot be concluded within the stipulated time. In view to save the time, it is expedient to pass appropriate order in the IA No. 691/2019, the interest of justice, instead of lingering further for further argument. Heard the learned lawyers for both sides. (x) Learned Counsel for the Respondent No. 1 further submitted that as the timeline for completion of CIRP proceedings was reaching fast and in view of the stalemate between the Secured and Unsecured Creditors the CoC Meeting could not be....
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....bmitted that there is no illegality in the Impugned Order and accordingly there is no merit in the Appeal and the Appeal is fit to be dismissed. (xvii) Resolution Professional was also directed to file status quo during course of the hearing and they file the status report on 23.06.2021. The Status Report indicates that no sooner he was appointed that Resolution Professional in the case by NCLT Ahmedabad Bench on 28.07.2020 and we obtained the order on 31.07.2020. (xviii) After hearing the Learned Counsel for the Appellant and Learned Counsel for the Respondents in this case Status Report was called from Respondent No. 2 on 23.06.2021 in a seal cover. (xix) On 05.07.2021 Learned Counsel for the Parties were further heard and the Status Report was further submitted by Learned Counsel for the Respondent No. 2 in a seal cover and it was opened in the Court and from the perusal of the Status Report which reads as under:- "3. Immediately after obtaining the copy of the order on 31.07.2020, the present RP had communicated with erstwhile Interim Resolution Professional (IRP) from 31.07.2020 itself and thereafter with the Suspended Management of the Corp....
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....operties was done by the representative(s) of the Suspended Management and certain employees of the Corporate Debtor instead of the erstwhile IRP or his representative(s). 5.The Corporate Debtor is having total 11 properties at 6 different locations to the extent of the information available with the present RP till date. The Corporate Debtor is also having a subsidiary company and the said company is also having a manufacturing unit at Kalmeshwar in the vicinity of Nagpur. 6.During the tenure of the erstwhile IRP, the erstwhile IRP had called total 3 (Three) meetings of the Committee of Creditors out of which third meeting could not be held owing to the stay order of the Hon'ble Adjudicating Authority. After the appointment of the present Resolution Professional of the Corporate Debtor, the present RP has called, convened and conducted total 5 (Five) meetings of the Committee of Creditors till date. During those meetings, various matters and issues were discussed and voted upon; which include approval of the remuneration and expenses by the Resolution Professional, appointment of professionals, publication of Form G for inviting Expression of Interest, approval o....
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....ainst the Suspended Management as well as the erstwhile IRP of the Corporate Debtor under the provisions of section 19 read with section 60 (5) of the Insolvency and Bankruptcy Code, 2016 on account of their non-cooperation. In addition to the same, the present RP has appeared, attended and dealt with various other matters filed before the Hon'ble Adjudicating Authority i.e., Hon'ble National Company Law Tribunal, Ahmedabad Bench, Ahmedabad. 14. The present RP has assisted to complete the Transaction Audit which was conducted by the firm, namely, M/s. Chaturvedi and Chaturvedi, Chartered Accountants, who were appointed to review and report on the avoidance transactions in terms of the Insolvency and Bankruptcy Code, 2016. 15. The present RP had also conducted various meetings and held multiple discussions with the major Lease Holder of the Corporate Debtor - PVR Limited and negotiated terms and conditions for fresh leave and license agreement which contributes to the considerable portion of the revenue of the Corporate Debtor. 16. It is required to apprise that during the tenure of the present RP, the significant amount of time was consumed and could not ....