TaxTMI 
TaxTMI 
2022 (1) TMI 571
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....ior Counsel for the Appellant No.1 the 'Adjudicating Authority' (National Company Law Tribunal, Division Bench II, Chennai) in MA/731/2019 in CP/280/IB/2018 (Filed by the Applicant/1st Respondent in Comp App (AT)(CH)(Ins) No.1/2022 & Appellant in Comp App (AT)(CH)(Ins) No.9/2022) by virtue of the impugned order on 24.12.2021 had dismissed the said Miscellaneous Application by arriving at the conclusion that the alleged transaction mentioned in MA No.731/2019 filed by the Resolution Professional in respect of the 'Corporate Debtor' does not constitute 'preferential transaction' as per Section 43 of the I&B Code and dismissed the said MA/731/2019 and closed the other connected MA/769/2019, IA/04(CHE)/2021 and MA/114/CHE/2021. APPELLANT'S SUBMISSIONS 2. Assailing the correctness, legality and validity of the impugned order dated 24.12.2021 in MA/731/2019 in CP/280/IB/2018 passed by the 'Adjudicating Authority' (National Company Law Tribunal, Division Bench II, Chennai) the Learned Senior Counsel for the 1st Appellant submits that the impugned order dated 24.12.2021 had given a 'windfall bounty' to the Respondents, because of the fraud played by them upon the 'Corporate Debtor', ....
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....in relation to the shares of the 3rd Respondent held by the 'Corporate Debtor'. 9. The Learned Senior Counsel for the 1st Appellant submits that the 'jurisdiction' for 'Avoidance of Transaction' is exclusively conferred only on the 'Adjudicating Authority' and that the ingredients of Section 63 of the I&B Code creates a bar upon the parties to approach any other forum. In this connection the observation made by the 'Adjudicating Authority' in pagaraph 48 of the impugned order had required the parties to approach an appropriate forum for 'reliefs' which could only be given by the 'Adjudicating Authority' itself. 10. The Learned Senior Counsel for the 1st Appellant advances an argument that the 'Adjudicating Authority had failed to appreciate in a real perspective in regard to the fact whether the mere payment of an advance and reaping the later benefit, will disentitle the Resolution Applicant who had paid 100% to the 'Committee of Creditors' of the benefits claimed under the Resolution Plan 2nd APPELLANT'S SUBMISSIONS 11. The Learned Senior Counsel for the 2nd Appellant submits that the 1st Appellant/Successful Resolution Applicant took over the 'Corporate Debtor (2nd A....
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....red that though Rs. 12.5 crores was said to have been disbursed on 02.03.2016, the Balance Sheet of the 2nd Respondent for the period ending 31.03.2016 (financial year 2015-16) had not disclosed any such loan but had expressly asserted that no related party loan were given during this period and Director's Report by signed by the 4th Respondent. 17. Likewise, the Learned Senior Counsel for the 2nd Appellant points out that for the Financial Year ending 31.03.2017 (financial year 2016-17) the Director's Report of the 2nd Respondent had reported that no loans were provided by the 2nd Respondent to any 'Related Party', though Rs. 7 crores was purportedly disbursed as per the loan agreement dated 2.12.2016. 18. The Learned Senior Counsel for the 2nd Appellant by pointing out that the 'Corporate Debtor' in its 'Annual Report' for the year 2015-16 reported no such loans were availed during the said period and the total borrowing for the financial year 2015-16 shows that no such borrowing existed during financial year 2015-16. As a matter of fact, in regard to the 2nd Respondent/South India Hotels the only entry in the 'Books of the Corporate Debtor' was shown as sum of Rs. 49.13 La....
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....uld not have been relied upon as creating a 'Security Interest' by the 'Adjudicating Authority', as per decision of this Tribunal in Volkswagon Finance Pvt Ltd V. Shree Balaji Printopack Pvt Ltd (vide Comp App (AT)(Ins) No.02/2020). 24. The Learned Senior Counsel for the 2nd Appellant refers to the order of this Tribunal in Interups Inc V Kuldeep Kumar Bassi, (Cmp App (AT)(Ins) No. 1079/2020) wherein it is held that the proceedings for 'Avoidance' can continue after approval of the Resolution Plan and the decision in Venus Recruiters Case does not prohibit the same. 25. The Learned Senior Counsel for 2nd Appellant refers to the judgement of this Tribunal in K.L. Jute Products Pvt Ltd V. Tirupati Jute Inds Ltd (vide Comp App (AT)(Ins) No. 277/2019), in regard to the plea of the 3rd Respondent in respect of Regulation 35A of the CIRP Regulations. 26. On behalf of the Appellants, a plea is made pending disposal of the instant Comp App (AT)(Ins) No. 1/2022, an interim order of restraining the Respondents from alienating or encumbering the 4,00,00,000 shares held by the Respondents in the 3rd Respondent and from alienation or encumbering the assets of the Respondent be granted,....
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....t Respondent/Appellant points out that the Information Memorandum contains a detailed note on the shareholding of the 'Corporate Debtor' in the 2nd Respondent (in Comp App (AT)(CH)(Ins) No.9/2022) and the invocation of the shares pledged by the 1st Respondent. As a matter of fact, the Resolution Applicant was informed of the pending proceedings under Section 43 before the 'Adjudicating Authority' and that subject to the outcome of the pending litigation the Resolution Applicant may get the shares in the 2nd Respondent. 31. The Learned Senior Counsel for the 1st Respondent/Appellant urges before this Tribunal that the Resolution Professional is duty bound to report the update on the implementation of the Resolution Plan and progress at every stage is being regularly monitored by him and in fact, the continuation of Section 43 application under the Code in this connection and the Successful Resolution Applicant had indicated that any benefit from the 'Avoidance Application' shall proceed. 32. In view of the above, on behalf of the 1st Respondent/Appellant (in Comp App (AT)(CH)(Ins) No.9/2019), an interim order of injunction restraining the Respondents from in any way dealing wi....
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.... Hotels Pvt Ltd) projects an argument that the contention advanced on behalf of the Appellants that the shares of the 3rd Respondent are an asset of the 'Corporate Debtor' and was taken over by the Resolution Plan and further that the transaction of invocation of pledge and subsequent sale by the 2nd Respondent is a fraudulent one are mutually destructive argument. 38. The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) brings it to the notice of this Tribunal as per Section 18(1) of the I&B Code, the 'Interim Resolution Professional/Resolution Professional' should have taken possession of the assets of the 'Corporate Debtor' and indeed, the 3rd Respondent's shares subject to the 'Present Appeal' were not taken possession of by the Resolution Professional. 39. Continuing further, The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) points out that the Resolution Professional had acknowledged the invocation of the Pledge....
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....solution Plan was approved on 20.01.2020 and that the 1st Appellant is not entitled to more than what was mentioned in the 'Information Memorandum' and that the 'Information Memorandum' prepared by the 'Resolution Professional' has stated that 4,00,00,000 shares of the Respondent was pledged to the 2nd Respondent and in the 1st week of October, 2018 the pledge was invoked and that the sais shares were not part of the assets of the 'Corporate Debtor' when the Resolution Plan was being proposed/considered/approved and that the present 'Appeal' is not maintainable. 45. The Learned Senior Counsel for the 3rd Respondent (Comp App (AT)(CH(Ins) no. 1/2022) and 2nd Respondent (in Comp Appeal (AT)(CH)(Ins) No. 9/2022) comes out with a plea that the 'Resolution Professional' of the 'Corporate Debtor' had addressed numerous letters to 'TASMAC', the only customer of the 3rd Respondent/Apollo Distilleries & Breweries Pvt Ltd and 'TASMAC' had thereafter stopped issuing indents/Purchase Orders. Besides this no prima facie case is made out for the grant of the interim order, as sought for by the Appellants. 46. The Learned Senior Counsel for the 3rd Respondent cites the Hon'ble Supreme Court....