TaxTMI 
TaxTMI 
2021 (12) TMI 12
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....ibunal, Mumbai Bench IV Mumbai). 2. The 'Adjudicating Authority' (National Company Law Tribunal, Mumbai Bench IV, Mumbai) while passing the impugned order dated 16.12.2020 in IA No.1198/2020 in CP(IB) No.3049/MB/C.IV//2019 under the heading 'Findings and Conclusion' at paragraph 10 has observed the following:- "We have gone through the documents submitted by the parties and heard the arguments of Learned Counsel of applicant assignee of financial creditor, Resolution Professional, COC and Member of suspended Board of Directors. The Bench observed that the Int3erim Resolution Professional has act4ed fair and has taken actions as per requirements of the Code judiciously. It is a settled law by the Hon'ble Supreme Court through various judicial pronouncements that Corporate Insolvency Resolution Proceedings are proceedings in rem. On the issue as to which event is crucial for withdrawal of CIRP, as per the law laid down by Hon'ble NCLAT in K.C. Sanjeev Vs Solar Offset Printer Pvt Ltd (Company Appeal (AT)(Insolvency) No.1427/2019) dated 28.02.2020, the relevant date for considering withdrawal of CIRP is the date of application and nothing else. As a matter of fact, in this ....
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.... the email on the same day stating that he would respond after considering the position of law. 6. The 1st Respondent had replied through email dated 26.8.2020 to the intimation of the 'Appellant' given on 25.8.2020. The 1st Respondent/RP had insisted that the 'Appellant' shall file a substitution application so as to enable him to act upon the request of the Appellant, although he was intimated by the 'Assignor' and 'Assignee' about the 'Assignment of Loan'. However, the 1st Respondent had refrained to take action as required under Law. 7. It is the stand of the Appellant that through an email dated 26.8.2020 it provided a copy of the 'assignment deed' dated 21.8.2020 which was earlier provided by the 'Financial Creditor' to the 1st Respondent. Besides this, the Appellant had attached a copy of Form 'A', together with a Demand Draft of Rs. 3 lakhs to the Resolution Professional/1st Respondent requesting him to withdrawn the application. Further, the Appellant had delivered the aforesaid Form 'A' together with Demand Draft of Rs. 3/- lakh to the 1st Respondent on 27.8.2020, since 'Committee of Creditors' was not constituted till date and that till 28.8.2020 the 1st Respondent....
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....drawal application under Regulation 30A(1)(a) of the CIRP Regulations, 2016 based on the single ground that the 'Appellant' was not substituted in the main application as 'Financial Creditor' in place of 'Janatha Sahakari Bank Ltd'. 14. The Learned Counsel for the Appellant contends that the 'Adjudicating Authority' had passed the 'impugned order' of dismissing the Interlocutory Application resting on the reason that no application for 'withdrawal of CIRP' was ever filed by the 'Interim Resolution Professional' before it. In this regard, it is the plea of the Appellant that the 'Adjudicating Authority' had to take into account the fact that the 'Appellant' had filed the 'withdrawal Application' vide Form 'A', which the then Interim Resolution Professional was bound to file before the 'Adjudicating Authority'. 15 The Learned Counsel for the Appellant adverts to the fact that the 1st Respondent by transgressing his powers had achieved the role of the 'Adjudicating Authority' and rejected the Form 'A' at the threshold on account of the same being not 'maintainable'. The Learned Counsel points out that the instant case is a classic example where the 1st Respondent had violated th....
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....ims etc. 21. The Learned Counsel for the Appellant refers to Regulation 17(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 under the caption 'Constitution of Committee' whereby and whereunder the Interim Resolution Professional shall file a Report certifying the constitution of committee to the 'Adjudicating Authority' within two days of the verification of claims received under sub-regulation (1) of Regulation 12 etc. 22. The Learned Counsel for the Appellant contends that with the 1st Respondent/RP the assignment deed was received on 21.8.2020 and further that everything was with him as on that date. The Learned Counsel for the Appellant refers to Regulation 2(1) (a) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation 2016 which provide the definition of 'Applicant', meaning the person(s) filing an application under Section 7, 9 or 10 as the case may be. 23. The Learned Counsel for the Appellant adverts to Section 5(7) of the I&B Code, 2016 which defines 'Financial Creditor' meaning any person to whom a financial debt is owed and include....
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.... applicant in this case is JSBL, and it is open for JSBL to make the request for withdrawal to me, if it so chooses. As on date, CFMARP is neither the Applicant nor a Claimant of the Corporate Debtor, since CFMARP has not chosen to file its proof of claim with me till date. 6. In case CFMARP wishes to proceed to withdraw, through me as the IRP, the claim as an assignee/transferee of the original applicant bank, then CFMARP will first have to take steps to implead itself in the place and stead of JSBL and amend the cause title of CP(IB)No.3049/MP.IV.2019 ('the said Petition') before the Hon'ble NCLT, Mumbai so that CFMARP becomes the Applicant in place of JSBL. You may do the needful if you are so advised and thereafter make the said request to me." 25. The Learned Counsel for the Appellant refers to Form 'FA' filed by the applicant dated 26.08.2020 (Application for withdrawal of Corporate Insolvency Resolution Process) wherein at para 1 and 2 it is observed as under: "1. The Janatha Sahakari Bank Limited had filed an application bearing CP(IB)No.3049/MB.IV/2019 on 14th August, 2019 before the Adjudicating Authority under Section 7 of the Insolvency and Bankrupt....
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....ers of the 'Committee of Creditors', therefore, while calling meeting of the 'Committee of Creditors', they should also be called for voting in accordance with the existing provisions of law. In that view of the matter, we direct the 'Resolution Professional' to place the proposal of Appellant/ Promoters before the 'Committee of Creditors'. If necessary, the date of meeting of the 'Committee of Creditors' be fixed in the manner as prescribed under the Regulations and information be given to the 'Financial Creditors' including the allottees to take part." On behalf of the Appellant a reference is made to the decision of the Hon'ble Supreme Court of India in the matter of Swiss ribbons Pvt Ltd V Union of India and Ors reported in (2019) 4 SCC 17 wherein it is observed that the Resolution Professional has only 'Administrative powers' and not an Adjudicatory powers. 27. The Learned Counsel for the Appellant refers to Judgement of this Tribunal in Comp App (AT)(Ins) No.105/2020 in the matter of Gouri Pd Goenka Vs Surender Kumar Agarwal wherein at para 8 it is observed as under:- "8. Taking into consideration the fact that the Appellant has already settled the matter with ....
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....he Appellant/Applicant (CFM ARC Pvt Ltd) against the 1st Respondent and another (filed under Section 60(5) and 12A of I&B Code, 2016 r/w Regulation 28 and 30A of the Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016) in which the following reliefs were sought:- "(a) that this Hon'ble Tribunal be pleased to declare that the action of IRP of not accepting Form FA from the Applicant was contrary to law and not in accordance with the provisions of IBC as well as SARFAESI Act, 2002; (b) that this Hon'ble Tribunal be pleased to direct the IRP to accept the request of Applicant herein for withdrawal of the proceedings and take steps in accordance with law; (c) That this Hon'ble Tribunal be pleased to declare that constitution of COC on 27th August, 2020 i.e. after receiving request ffor withdrawal of the proceedings is contrary to law and therefore same may be quashed and set aside; (d) Pending the hearing and final disposal of this Application, this Hon'ble Tribunal be pleased to restrain the IRP to conduct further meeting of the COC; (e) Pending the hearing and final disposal of this ....
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....not even signed. This fact was brought to the notice of the COC during its 1st Meeting, and the same was recorded in the Minutes of the said Meeting. 35. The Learned Counsel for the 1st and 3rd Respondent submits that when the assignment took place on 21.8.2020, for four days after the assignment, the Appellant had not taken any action and there was no explanation from the Appellant as to why it has not submitted Form FA till 25.08.2020. Apart from that the claim of the Appellant was received only on 7.9.2020 and was admitted on 14.9.2020. PLEAS OF 2ND RESPONDENT 36. The Learned Counsel for the 2nd Respondent submits that in IA No.1198/2020 in CP(IB) No.3049/MB.IV/2019 there is no prayer for withdrawal either under Section 12 A of I&B Code, Regulation 30A of CIRP Regulations or Rule 11 of National Company Law Tribunal Rules 2016 and that no relief in Ia No.1198/2020 was sought for admission to the Committee of Creditors as a Member and as such the applicant has no desire to participate in the CIRP of the Corporate Debtor. 37. The Learned Counsel for the 2nd Respondent comes out with a stand that 'CIRP' once started, it is for the benefit of all the 'Creditors' and not j....
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.... of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 provides that an application for withdrawal should be submitted to the Interim Resolution Profession or the Resolution Professional, as the case may be in Form FA of the Schedule before issue of invitation for 'Expression of Interest' under Regulation 36A. In fact, the said application should be accompanied by a Bank Guarantee towards estimated cost incurred for the purposes of clauses (c) and (d) of Regulation 31 till date of application. The Committee of Creditors will consider the application within 7 days of the receipt of the application and if approved the same, with 90% voting share, the Resolution Professional will submit application to the Adjudicating Authority on behalf of the applicant, within 3 days of such approval. Thereafter, the Adjudicating Authority, may by an order, approve the application submitted before it. ASSESSMENT 42. It comes to be known that an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 in CP(IB) No.3049/MB.IV/2019 was filed by the Financial Creditor/Janatha Sahakari Bank Ltd seeking the initiate CIRP against the Corporate Debtor/Oasis Al....
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....2020, in terms of Rule 17 of CIRP Rules, 2016. 47. The other contention of the Appellant is that it was excluded from the COC, if classified as unsecured creditor and further that Appellant alone would have had 74% of voting rights and would have had majority in the Committee of Creditors. 48. At this stage this tribunal worth recalls and recollects the order of the Hon'ble Supreme Court of India dated in Brilliant Alloys Pvt Ltd V. Mr. S. Rajagopal and Ors, Special Leave Petition (Civil) No.31557/2018, wherein it is observed that Regulation 30A(1) is not mandatory but is directory for the simple reason that on the facts of a given case, an application for withdrawal may be allowed in exceptional cases even after issue of invitation for Expression of Interest under Regulation 36A. 49. Further this Tribunal aptly points out the observations made by the Hon'ble Supreme Court of India in the decision Swiss Ribbons Pvt Ltd and Ors Vs Union of India (UOI) and Ors reported in MANU/SC/0079/2019 whereby and whereunder at paras 52 and 53 it is observed as under:- "52. It is clear that once the Code gets triggered by admission of a creditor's petition under Sections 7 to 9,....
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....ved the following:- "5. However, in view of Section 12A even during the liquidation period if any person, not barred under Section 29A, satisfy the demand of 'Committee of Creditors' then such person may move before the Adjudicating Authority by giving offer which may be considered by the 'Committee of Creditors', and if by 90% voting share of the 'committee of creditors', accept the offer and decide for withdrawal of the application under Section 7 of the I&B Code, the observation as made above or the order of liquidation passed by the Adjudicating Authority will not come in the way of Adjudicating Authority to pass appropriate order. Both the appeals are dismissed with aforesaid observations." 51. The reality of the matter is that the Appellant, the Assignee of 'JSB', standing in the shoes of 'JSBL', will become an 'Applicant' in so far as the withdrawal is concerned as per Regulation 30A and 12A of the IBC, 2016. If the Regulation 30A(1)(a) is pressed into service then it is incumbent on the part of the Interim Resolution Professional/Resolution Professional to constitute the 'Committee of Creditors'. Furthermore, in the instant case it can safely and securely be sai....