TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 65
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....IB) No.482/2019. 2. The Appellant has challenged the 'liquidation order' as well as the action of the 'Resolution Professional' (RP) to the extent that the Appellant was disallowed to participate in the 'Committee of Creditors' (CoC) meeting of the 'Corporate Debtor' (CD) and has sought the following reliefs: a. To set aside the impugned order as stated above; b. To direct the RP to set aside all the CoC meetings and conduct them afresh; c. To direct that the CIRP be re-initiated etc. 3. The CD is a manufacturer of diversity switch gear products, relay panels etc. The CD was admitted to CIRP on 11.09.2020. The 1st CoC meeting was conducted on 09.10.2020 for which the Appellant was neither issued a notice for the said meeting nor provided any agenda etc. The Appellant was issued notice for the first time in 2nd CoC meeting on 22.10.2020. The Appellant asked for the 'minutes' of the 1st CoC meeting. The RP didn't provide him. However, even for the 2nd CoC meeting, no way link was provided to the Appellant and the RP told he is obtaining legal opinion as to the participation to the Appellant. The Appellant was further disallowed to participate in all further CoC meetings. In t....
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....on 02.09.2020, ) it was held that the proviso cannot have retrospective effect and would only apply if the disqualification took place after 07.05.2018, in the following terms:- "98. In view of the above, the petitioners would not demit their office on account of disqualifications incurred under Section 164 (2) of the Act by virtue of Section 167(1)(a) of the Act prior to the statutory amendments introduced with effect from 07.05.2018. However, if they suffer any of the disqualifications under Section 164(2) on or after 07.05.2018, the clear implication of the provisos to Section 164(2) and 167(1)(a) of the Act are that they would demit their office in all companies other than the defaulting company." 6. In Anjali Bhargava and Anr. Vs. Union of India and Anr. 2021 SCC Online Del 195, the Hon'ble High Court of Delhi followed Mukut Pathak (Supra) and directed for reactivation of DIN as well as directing that such directors be treated as part of the suspended management in the following terms: "4... Since there is no stay on the judgment in Mukut Pathak (supra), it continues to hold the field. Thus, in cases where directors have been disqualified prior to 7th May, 2018, the proviso....
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....ich commenced on 11. 09. 2020. He has also submitted that Director Identification Number (DIN) of the Appellant has been disqualified by the Registrar of Companies in accordance with Section 164(2) of the Companies Act, 2013 as one of the Company i..e Apex Power Equipments Pvt. Ltd. Where the Appellant was one of the Director was struck off by the Registrar of Companies vide order dated 21.06.2017 passed in STK-7 pursuant to the notice issued by the Registrar of Companies Ahmedabad in STK-5 dated 25.04.2017. 10. The Respondent has also submitted that as per Section 167 r/w Section 164 of the Companies Act, 2013 that the office of the Director from the Company shall become vacant in case if the said director incurs disqualifications as specified in Section 164 of the Companies Act. Section 164 & 167 of the Companies Act, 2013 read as under: "Section 164 - Section 164: Disqualifications for appointment of director. (1) A person shall not be eligible for appointment as a director of a company, if - (a) he is of unsound mind and stands so declared by a competent court; (b) he is an undischarged insolvent; (c) he has applied to be adjudicated as an insolvent and his applicat....
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.... (1) The office of a director shall become vacant in case- (a) he incurs any of the disqualifications specified in section 164; ((Inserted by the Companies (Amendment) Act, 2017, w.e.f. 07.05.2018[S.O. 1833(E) dated 07.05.2018].)) [Provided that where he incurs disqualification under sub-section (2) of section 164, the office of the director shall become vacant in all the companies, other than the company which is in default under that sub-section.] (b) he absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board; (c) he acts in contravention of the provisions of section 184 relating to entering into contracts or arrangements in which he is directly or indirectly interested; (d) he fails to disclose his interest in any contract or arrangement in which he is directly or indirectly interested, in contravention of the provisions of section 184; (e) he becomes disqualified by an order of a court or the Tribunal; (f) he is convicted by a court of any offence, whether involving moral turpitude or otherwise and sentenced in respect thereof to imprisonment for not less than six....
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....t on account of the said disqualification, the Appellant is no longer the Director of the CD w.e.f. 01.11.2016 and therefore, the present appellant is having no locus standi to file the present appeal at such a belated stage. It is also stated that as per the mandate required under Section 24(3) of the Code, the RP shall only issue notice and further invite the Suspended Board of Directors of the CD to participate in the meeting of CoC who were forming the part of Board of Directors at the time when the CIRP came to be initiated by the Adjudicating Authority. He has further submitted that the mandate of Section 24(3) (b) of the Code, the RP is only supposed to give notice to members of the 'Suspended Board of Directors' as distinguished from disqualified 'Directors'. There is no provision to give notice to the disqualified 'Directors'. Even under Section 5(23) of the Code does not include disqualified 'Directors' and hence, the Appellant cannot be treated as a part of 'Suspended Board of Directors'. Even if the CIRP of the CD was not initiated by the Adjudicating Authority even in that scenario the Appellant cannot form the part of the 'Board of Directors' of the CD. This appeal is....
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....dition) no EOIs came to be received by the RP. That as no EOIs came to be received by the CD even after publication of Form-G twice, the members of CoC suggested for liquidation and further directed the RP to place the Resolution for liquidation in its 08th CoC meeting dated 08.03.2021. The members of the CoC in its 08th Meeting of CoC, resolved with 100% majority for liquidation of CD. It is submitted that pursuant to the resolution passed by the members of CoC in its 08th CoC meeting, the RP filed an application for liquidation of the CD and accordingly, the said application came to be allowed by the Adjudicating Authority vide order dated 05.05.2021. 13. We have carefully gone through the submissions made by the Ld. Counsels for the parties and the order passed by the Adjudicating Authority and have the following observations: a. The RP has tried twice for initiation of 'Expression of Interest' (EOI) process and at the first stage, he received two EOIs from the 'Prospective Resolution Applicants' who were only interested in the plant premises of the CD. However, it was not approved by the CoC and CoC decided again in the 6th CoC meeting for fresh EOI and the same were also pu....