TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 429
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.... the present matter and appoint another RP to run the corporate debtor as a going concern, if required; and iii. To take decisions on the items envisaged under Regulations 39B, 39C and 39D of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 in the event of liquidation of corporate debtor. 2. The gist of the Applicant's brief is- 1. This Adjudicating Authority, vide its Order dated 12.03.2018 admitted the Company Petition CP(IB) No. 219/7/HDB/2017 filed under Section 7 of I & B Code, 2016 initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor and appointed the Respondent herein as Interim Resolution Professional and later confirmed as Resolution Professional (for short 'RP/Respondent') at the COC meeting held on 09.04.2018. 2. The COC at its 18th meeting held on 11.03.2019 and 12.03.2019 evaluated the Resolution Plans submitted by ARCIL, Unison Hotels Private Limited and CFM Asset Reconstruction Private Limited ("CFM ARC") and approved the Resolution Plan submitted by CFM ARC by 88% voting. 3. The RP had filed an application IA No. 281 of 2019 before the Hon'ble Tribunal seeking approval of the ....
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....rate on the future course of action. A copy of the email dated 26.05.2021 is filed as Annexure-6 of the application. 7. CRM ARC withdrew the aforesaid writ petition and again filed a writ petition W.P. No. 22667 of 2021, vide its order dated 16.09.2021 suspended the operation of the order passed by this Hon'ble Tribunal in IA No. 281 of 2019. The applicant once again sent an email dated 23.11.2021 (Annexure-7 of the application) requesting the RP to convene a meeting of the COC to discuss the way forward and renewal of bank guarantee furnished by CFM ARC but the requests of the applicant deliberately fallen on the deaf ears of the RP. 8. In terms of Regulations 39(B) and 39(C) of the IBBI, the COC has to make a best estimate of the amount required to meet liquidation costs in consultation with the RP and the COC has the option to recommend the RP to first explore the sale of the corporate debtor as a going concern or sale of its business as a going concern respectively. In the present case, neither has the COC made an estimation of the liquidation costs nor has it been able to make any recommendation to the RP. 9. The RP has failed to call for a meeting despite the multip....
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.... The Learned Counsel for the Appellant is allowed to hand over a copy of this order to "Interim Resolution Professional/Resolution Professional". iv. It is denied that in the last meeting of COC, no discussions have taken place on the liquidation costs and fee of liquidator in the event the company goes into liquidation which have to be mandatorily decided after introduction of Regulation 39B to D of the CIRP Regulations, vide amendment dated 25.07.2019. As the matter is pending consideration before the Hon'ble NCLAT and as on today no COC is in existence in the eyes of law, as such, the same cannot be demanded for by one party. v. The aforesaid provisions were brought into force from 25.07.2019 i.e. after submission of approval of resolution plan to Adjudicating Authority i.e. on 25.03.2019. When the resolution plan is pending for approval, Resolution Professional cannot initiate any action without a specific direction from this Hon'ble Tribunal. If this Hon'ble Tribunal directs the RP for conducting a COC, it will be complied. vi. RP has been furnishing information from time to time. However, the petitioner is in the habit of asking same information again and ag....
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....ed by the RP in its email dated 04.10.2019. iii. It is in the knowledge of public domain that the erstwhile promoter was involved in several fraudulent and avoidance transactions due to which ED and CBI have initiated proceedings against him and the assets of the corporate debtor under PMLA Act. It is suspected that significant amounts are siphoned off by the erstwhile promoters and relevant parties. The resolution of the COC to conduct a forensic audit was already taken by requisite majority of COC members as has also been upheld by this Hon'ble Tribunal in IA No. 344 of 2018, dated 26.02.2019. A copy of the same is filed as Annexure-3 of the rejoinder. iv. The COC during its 18th meeting had decided that the Applicant herein will be finalizing the scope of work for forensic audit and further on 12.03.2019, the COC had resolved to appoint M/s. Grant Thorton as the forensic auditor. The applicant finalized the scope of work on 15.03.2019, which is mentioned as page Nos. 6 to 7 of the rejoinders. In this connection, on 16.04.2019, RP had forwarded the concerns expressed by three individual members of COC, who do not even hold 1% of the voting share in COC and produced a lega....
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....ication has been filed, pursuant to the unanimous resolution passed by the Joint Lenders with 85% voting share in their meeting held on 20.11.2021, alleging that their multiple requests to the Resolution Professional to convene the meetings of the members of COC have turned futile. A copy of the Minutes of the said Meeting of JLM also has been filed as Annexure-I at page Nos. 12 to 18 of the Rejoinder. 7. Ld. Counsel would further submit that the RP in this case is not implementing the decisions of the COC besides failed to provide the monthly cash flow statements for the period from March 2018 to August 2019, statement of CIRP expenses, reasons for increase in expenditure, status of forensic audit, financial statements for the year 2019-20, expenses for the financial year 2020-21 etc. In support of this plea, the applicant filed copies of emails as Annexure-2, 3 & 4 at page Nos. 16 to 27 of the application. It is stated that the RP though bound to provide financial information required by the COC within a period of seven days, in terms of Section 20(10) of IBC, the RP failed to provide the same to the COC. It is stated that the decision of the members of the COC for conducting th....
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....on the Order of the Hon'ble NCLAT dated 17.02.2021, also urged that, since one of the items in the agenda to be discussed in the proposed meeting of the Members of the COC is to replace the present RP, since amounts to violation of the orders of the Hon'ble NCLAT dated 17.02.2021, no direction to call for the proposed meeting can be issued by this Tribunal and the application is liable to be dismissed at the threshold. It is further submitted that from time to time, the RP has been responding to the queries of the Members of the COC and made it clear on several occasions that after CIRP process ended, COC can be convened only upon the direction of this Tribunal. In this context, Learned Sr. Counsel placed reliance on Section 28 of IBC which is stated that once the Resolution Plan approved by COC it is to be submitted with the Adjudicating Authority for approval then COC becomes functus officio. Hence the COC now cannot call upon the RP to convene a meeting of the members of the COC. 12. Having heard the Ld. Counsels for both sides besides considering the scope of this application, we hereby, hold that the CoC is entitled to call upon the Resolution Professional to convene ....