AI Drafter 
TaxTMI 
TaxTMI 
2022 (6) TMI 588
X X X X Extracts X X X X
X X X X Extracts X X X X
....spondent No. 2 as per the provisions of Section 65 and 70(2). v) To pass such other orders deem fit. 2. It was averred in the application that 1st Respondent is the family concern of the Bansal Group. One Ms. Deepthi Vinod Bansal is the relative of 1st Respondent's Managing Director Mr. Sathish Bansal. 3. It was further averred that the 1st Respondent had entered into various agreements with the Corporate Debtor and its promoters and shareholders through Ms. Deepthi Vinod Bansal to take control of the Corporate Debtor. 4. It was further averred that 1st Respondent had invested Rs. 7.47 Crore in Corporate Debtor to close the bank dues of the Corporate Debtor. In turn, 49% of the shares of the Corporate Debtor have been transferred to Ms. Deepti Bansal for Rs. 1/- only as consideration vide Shareholders Agreement dated 16.11.2016. In addition to that 1st Respondent had secured its interest by creating a charge over the assets of the company. 5. Thereafter, the Corporate Debtor was admitted into CIRP on 27.04.2021 by the application filed by the 1st Respondent herein and the 2nd Respondent herein was appointed as Interim Resolution Professional of the Corporat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Applicant in the Rejoinder contended that the 2nd Respondent accepted the 1st Respondent into CoC, after knowing that it is a related party to the Corporate Debtor and now 1st Respondent is the sole member of CoC who is driving the CIR Process. It was further argued that the 1st Respondent and his niece holding 49% of shares in Corporate Debtor fall within the definition of the related party as per Sec. 5(24) of IBC, 2016 and are ineligible to be a part of CoC, to substantiate the argument placed the Shareholders' Agreement dated 16.11.2016, on record and sought to dissolve the CoC and to remove the Resolution Professional of the Corporate Debtor. 14. We have heard learned counsel for both sides. It can be seen from the records that the CIRP has been initiated against the Corporate Debtor on 27.04.2021 and 1st Respondent herein was appointed as Interim Resolution Professional. Moreover, an appeal against the CIRP order is pending lis and no stay has been granted against CIRP order. At this stage, in the absence of recall or review power available to this Adjudicating Authority the prayer (ii), sought by the Applicant to declare the CIRP initiated against the Corporate Debtor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t have any right of representation, participation or voting in a meeting of the committee of creditors." here it would be relevant to refer to the decision in Phoenix Arc Private Limited Vs. Spade Financial Services Limited & Ors., wherein it was held as follows, "57. ... The expression 'related party' is defined in Section 5(24) in relation to a corporate debtor. Section 5(24A) provides a corresponding definition in relation to an individual. 58. The definition describes a commutative relationship, meaning that X can be a related party of Y, if either X is related to Y, or Y is related to X. The definition of 'related party' under the IBC is significantly broad. The intention of the legislature in adopting such a broad definition was to capture all kinds of interrelationships between the financial creditor and the corporate debtor. 59. The term 'related party' has also been defined by Parliament in the Companies Act, 2013 for all corporations. The definition of the expression has also been expanded for listed entities by the Securities Exchange Board of India by amendment to the Equity Listing Agreement to include elem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or the previous two years; (ii) financial and operational payments for the previous two years; (iii) list of assets and liabilities as on the initiation date; and (iv) such other matters as may be specified; (b) receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made under sections 13 and 15; (c) constitute a committee of creditors; ... Regulation 17: Constitution of committee. (1) The interim resolution professional shall file a report certifying constitution of the committee to the Adjudicating Authority within two days of the verification of claims received under sub-regulation (1) of regulation 12. (2) The interim resolution professional shall hold the first meeting of the committee within seven days of filing the report under this regulation. Reading the above provisions clearly shows that it is the duty of the Resolution Professional to collect and peruse the information regarding Corporate Debtor and claimants before constituting CoC. It is also relevant to refer to Form C in the schedule of IBBI (Insolvency Resolution Process for Corporate P....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Bisayari Towers, 14/15 Halis Road, Kilpauk, Chennai 600020 address. Key Management Mrs. Trishala Vaishae Wo Mr. Amir Vaishnav: Ats. Rhea Vaishnay Mr. Ved Raksandaram and M. Farah Sheth w/n Dharam Vijay Sheth-ull residing at 3- Bayani Towers, 14/15 Halls Read. Kilpauk, Chennai 600010. (Key Managemen's "Parties" shall jointly refer Key Management. Key Investor and the "Company" and "Party" shall refer to one of them as the This agreement is to record terms of agreement between Company. Key Management, and the Key Investor based on the terms set out herein. Accordingly, this agreement and its terms will be binding on the Parties. Company Key Management Key Investor(s) Investment amount and Investment Process Megabisk Pradicis Madras Private Limited EMC Amit Vaishnav so Mr. C. N. Valinas Mr. Trshala Vaishnas w Mt. Amit Vaishnav, 3. M. Rhea Vaistas i Me. Vinod Balasundaram, and 4 Ms. Farah Sheri wo Mr. Dharams Vijay Sheth and their Affiliates MD Overseas Limited and/or its Associates Affiliates andise hund. managed or advised, directly or indirectly, by it The Key Investor and or its Associates Miliates shall vest though ....