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2022 (2) TMI 18
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.... I.A. 715 of 2019 seeking Liquidation under Section 34(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the 'Code'). 2. The Hon'ble Supreme Court in Civil Appeal Nos. 6533 of 2021 between 'Bank of India' Vs. 'Anil Kaneria & Ors.' has noted that the matter be taken up for hearing on the date fixed, but as the Appellant Counsel has sought for adjournments to place some Judgements in support of his case, and the matter was taken up finally on 13.01.2022 and heard at length. 3. Submissions of the Learned Counsel appearing on behalf of the Appellant: * It is submitted that the Insolvency Application under Section 7 of the Code was filed on 03.07.2018, which is more than three years after the 'Corporate Debtor' was declared as NPA on 30.03.2015 and hence is 'barred by Limitation'. The Learned Counsel relied on the Judgements of the Hon'ble Supreme Court in 'Babulal Vardharji Gurjar' Vs. 'Veer Gurjar Aluminium Industries Private Limited & Anr.' (2020) 15 SCC 1, 'Laxmi Pat Surana' Vs. 'Union Bank of India and Anr.' (2021) 8 SCC 481, and in 'B.K. Educational Services (P) Ltd.' Vs. 'Parag Gupta & Associates', (2019) 11 SCC 633. * As the 'Corp....
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....et Reconstruction Company (India) Limited', (2019) 10 SCC 572. o 'Babulal Vardharji Gurjar' Vs. 'Veer Gurjar Aluminium Industries Private Limited & Anr.' (2020) 15 SCC 1. o 'Laxmi Pat Surana' Vs. 'Union Bank of India and Anr.' (2021) 8 SCC 481. o 'Committee of Creditors of Essar Steel through Authorized Signatory' Vs. 'Satish Gupta & Ors.', (2020) 8 SCC 531. o 'Joseph Joseph & Ors.' Vs. 'Churakulam Tea Estate Pvt. Ltd.' NCLT Kochi, IA/(IBC)/74/KOB/2021 in IBA/21/KOB/2019. o 'Enviiro Bulkk Handling Systems Pvt. Ltd.', I.A. No. 741 of 2021 in C.P. (IB) No. 1319/MB/2017. 4. Submissions of the Learned Counsel appearing on behalf of the Respondent: * Learned Counsel submitted that CIRP against the 'Corporate Debtor' commenced on 26.04.2019 and as no Resolution Plan was received even after issuance of three publications for 'Expression of Interest' on 16.07.2019, 31.07.2019 and on 23.08.2019 respectively, the members of the CoC resolved to go for Liquidation by Resolution dated 09.10.2019. I.A. 715 of 2019 was filed seeking a direction from the Adjudicating Authority for liquidating the 'Corporate Debtor' and the same was allowed. ....
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....jority of 88.44% approved the Resolution for Liquidation of the 'Corporate Debtor' during the e-voting held on 09.10.2019. Based on this decision, the IA seeking Liquidation was filed on 17.10.2019. It is submitted by the Learned Counsel that this Appeal itself is barred by Limitation as the Appellants have falsely stated that the date of knowledge of the Impugned Order is 16.09.2020, whereas the Respondent issued a Public Announcement of the Liquidation Process on 18.07.2020 itself. Assessment: Issue of Limitation 5. The contention of the Learned Counsel for the Appellant that the date of NPA is 30.03.2015 and Section 7 Application was filed on 03.07.2018 and hence is 'barred by Limitation', is unsustainable as the material on record evidences the revival letters, written by the 'Corporate Debtor', the last one being 28.11.2015. It is seen that the Bank has enclosed these revival letters duly acknowledged and signed by the 'Corporate Debtor' from time to time and the Section 7 Petition filed on 06.07.2018, cannot be said to be 'barred by Limitation'. The ratio of the Hon'ble Supreme Court in 'Dena Bank (Now Bank of Baroda)' Vs. 'C. Shivkumar Reddy & Anr.' (2021) 10 SCC 33....
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....e validity of the "approved" resolution plan by CoC; and not for approving the resolution plan which has been disapproved or deemed to have been rejected by CoC in exercise of its business decision." [emphasis supplied] 150. It will therefore be clear, that this Court, in unequivocal terms, held, that the appeal is a creature of statute and that the statute has not invested jurisdiction and authority either with NCLT or NCLAT, to review the commercial decision exercised by CoC of approving the resolution plan or rejecting the same. 151. The position is clarified by the following observations in paragraph 59 of the judgment in the case of K. Sashidhar (supra), which reads thus: "59. In our view, neither the adjudicating authority (NCLT) nor the appellate authority (NCLAT) has been endowed with the jurisdiction to reverse the commercial wisdom of the dissenting financial creditors and that too on the specious ground that it is only an opinion of the minority financial creditors....." 152. This Court in Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) after reproducing certain paragraphs in K. Sashidh....
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....ntation. The scope of interference by the adjudicating authority in limited judicial review has been laid down in Essar Steel [Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta, (2020) 8 SCC 531], the relevant passage (para 54) of which we have reproduced in earlier part of this judgment. The case of MSL in their appeal is that they want to run the company and infuse more funds. In such circumstances, we do not think the appellate authority ought to have interfered with the order of the adjudicating authority in directing the successful resolution applicant to enhance their fund inflow upfront." 155. This Court observed, that the Court ought to cede ground to the commercial wisdom of the creditors rather than assess the resolution plan on the basis of quantitative analysis. This Court clearly held, that the appellate authority ought not to have interfered with the order of the adjudicating authority by directing the successful resolution applicant to enhance their fund inflow upfront. 156. It would thus be clear, that the legislative scheme, as interpreted by various decisions of this Court, is unambiguous. The commercial wisdom of CoC is not to ....
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....turnover does not exceed five crore rupees; (ii) a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and (iii) a medium enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees. 2. Becoming a micro, small or medium enterprise.- (1) Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online in the Udyam Registration portal, based on self-declaration with no requirement to upload documents, papers, certificates or proof. (2) On registration, an enterprise (referred to as "Udyam" in the Udyam Registration portal) will be assigned a permanent identity number to be known as "Udyam Registration Number". (3) An e-certificate, namely, "Udyam Registration Certificate" shall be issued on completion of the registration process." 12. It is the cardinal principle of construction that every statue is prima facie prospective, unless it is expressly or by necessary implication mad....
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.... of evidence are prima facie prospective and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only." 15. We also find it relevant to refer to paragraphs 110.2 to 110.5 in 'Director General of Trade & Anr.' Vs. 'Kanak Exports & Anr.' (2016) 2 SCC 226, in which it is observed as hereunder: State of Rajasthan & Ors. v. Basant Agrotech (India) Ltd. "21. There is no dispute over the fact that the legislature can make a law retrospectively or prospectively subject to justifiability and acceptability within the constitutional parameters. A subordinate legislation can be given retrospective effect if a power in this behalf is contained in the principal Act. In this regard we may refer with profit to the decision in Mahabir Vegetable Oils (P) Ltd. v. State of Haryana (2006) 3 SCC 620, wherein it has been held that: "41. We may at this stage ....
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....hat which it was not, that Act I understand to be retrospective. That is not this case. The question here is whether a certain provision as to the contents of leases is addressed to the case of all leases or only of some, namely, leases executed after the passing of the Act. The question is as to the ambit and scope of the Act, and not as to the date as from which the new law, as enacted by the Act, is to be taken to have been the law." These observations were made in dealing with the question as to the retrospective construction of Section 3 of the Conveyancing and Law of Property Act, 1892 (55 & 56 Vict. c. 13). In substance Section 3 provided that in all leases containing a covenant, condition or agreement against assigning, underletting, or parting with the possession, or disposing of the land or property leased without licence or consent, such covenant, condition or agreement shall, unless the lease contains an expressed provision to the contrary, be deemed to be subject to a proviso to the effect that no fine or sum of money in the nature of a fine shall be payable for or in respect of such licence or consent. It was held that the provisions of the said section appli....
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....conclusion that the said notification is only 'Prospective in nature' and not a 'Retrospective' one because the said notification does not in express terms speak about the applicability of retrospective operation. The relevant words are conspicuously absent besides there being no implicit reference to be drawn for such a construction. 18. The Learned Counsel for the Appellant strenuously argued that paras 43 & 83 of 'Arcelormittal India Private Limited' Vs. 'Satish Kumar Gupta & Ors.', (2019) 2 SCC 1, are applicable to this case. Paras 43 & 83 are detailed as follows: "43. According to us, it is clear that the opening words of Section 29A furnish a clue as to the time at which sub-clause (c) is to operate. The opening words of Section 29A state: "a person shall not be eligible to submit a resolution plan...". It is clear therefore that the stage of ineligibility attaches when the resolution plan is submitted by a resolution applicant. The contrary view expressed by Shri Rohatgi is obviously incorrect, as the date of commencement of the corporate insolvency resolution process is only relevant for the purpose of calculating whether one year has lapsed from the date of cla....
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.... corporate insolvency resolution process. If there is a resolution applicant who can continue to run the corporate debtor as a going concern, every effort must be made to try and see that this is made possible. A reasonable and balanced construction of this statute would therefore lead to the result that, where a resolution plan is upheld by the Appellate Authority, either by way of allowing or dismissing an appeal before it, the period of time taken in litigation ought to be excluded. This is not to say that the NCLT and NCLAT will be tardy in decision making. This is only to say that in the event of the NCLT, or the NCLAT, or this Court taking time to decide an application beyond the period of 270 days, the time taken in legal proceedings to decide the matter cannot possibly be excluded, as otherwise a good resolution plan may have to be shelved, resulting in corporate death, and the consequent displacement of employees and workers." 19. The contentions of the Learned Counsel that amendments enforced during CIRP shall be applicable to decide the eligibility to submit the Resolution Plan & that the promoters of the 'Corporate Debtor' become eligible as the law was amended durin....