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2022 (12) TMI 477
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....(National Company Law Tribunal, Allahabad) in the matter of IA(IB) No. 154/ALD/2022 in CP(IB) No. 45/ALD/2019. 2. In brief, the case of the Appellant is that it is involved in the construction and development of own or leased property, including buying, selling, renting and operating of self-owned or leased real estate such as apartment buildings, non-residential buildings, developing and subdividing real estate into lots etc. The Corporate Insolvency Resolution Process (in short 'CIRP') was initiated against the Corporate Debtor Ratandeep infrastructure Pvt. Ltd. vide order dated 16.4.2019 of the Adjudicating Authority on an application under section 7 of the IBC filed by Nitin Jain & Anr. as Financial Creditor. Upon unsuccessful completion of CIRP, order for liquidation of the corporate debtor was passed on 31.1.2022 in IA No. 73/2021 and Alok Kumar Kuchchal/Respondent was appointed as the Liquidator. The Appellant preferred IA No. 115/2022 under section 60(5) of IBC seeking direction to the Resolution Professional to place the scheme of compromise and arrangement submitted by the Appellant under section 230 of the Companies Act, 2013 read with Regulation 2B of the Insolvency an....
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....f the corporate debtor, and in pursuance of this objective, the Appellant obtained an order on 13.4.2022 from the Adjudicating Authority directing the Liquidator to consider the Appellant's scheme of compromise and arrangement in respect of the corporate debtor. He has further submitted that consequent to this order, the Appellant sought information about the claims from the Liquidator vide e-mail dated 20.4.2022, and also for providing documents required by him to enable him to prepare the scheme of compromise and arrangement. 7. The Learned Counsel for Appellant has further stated that after the Appellant submitted a confidentiality undertaking to the Liquidator, he was supplied some incomplete information which also contained discrepancies in the list of creditors/claims. Thereafter, some more e-mails were exchanged between the Appellant and Respondent/Liquidator which resulted in delay in submission of the scheme of compromise and arrangement him. The Liquidator, without considering the scheme presented by the Appellant, in total disregard of the directions given by the Adjudicating Authority for consideration of the scheme of compromise and arrangement, issued a public notice....
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....g forward a credible and meaningful scheme of compromise and arrangement is clearly displayed by the fact that the said scheme purports to make provision for payment of Rs.12.48 crores to the stakeholders, but a major portion of payments are meant for creditors whose claims were either not accepted in the CIRP or who are related parties of the corporate debtor. He has claimed that the Liquidator is required to act with a view to maximise the value of the corporate debtor and the successful bid found in the e-auction is only Rs. 7.45 crores which is much less than the amount offered by the Appellant through the said scheme, and, therefore, the scheme is worth considering as it would lead to maximisation value of the assets of the corporate debtor, which is the primarily objective of the IBC. 11. In response, the Learned Senior Counsel for the Respondent No. 1/Liquidator has adverted to the string of e-mail communication exchanged between the Appellant and the Liquidator after the direction dated 9.4.2022 given by the Adjudicating Authority, starting with e-mail dated 20.4.2022 of the Appellant. He has claimed that the Appellant was not really interested in submitting a genuine sche....
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.... found that Mr. Prince Jain is acting in collusion with Mr. Rakesh Kumar Agarwal, a director of the Appellant/Bankey Bihari Infrahomes Pvt. Ltd., an allegation that has not been denied by the Appellant. He has also claimed that the act of 'collusion' between the erstwhile management of the corporate debtor and Mr. Rakesh Kumar Agarwal is established by the sharing of e-mail dated 30.4.2022 by Mr. Rakesh Kumar Agarwal, a director of the Appellant, with the erstwhile directors of the corporate debtor when this email contained confidential information relating to the claims filed in the liquidation of the corporate debtor and Mr. Rakesh Kumar Agarwal was bound by the confidentiality undertaking to keep such information confidential. 15. With regard to the Liquidator's conduct as being fair and without prejudice, the Learned Counsel for Liquidator has explained that the Liquidator has provided all the necessary information sought by the Appellant in time, but he was completely remiss in submitting a full and complete scheme within the allotted time i.e. by 02.05.2022. Therefore, the Liquidator was duty-bound to continue with the e-auction process in which eventually the successful bid....
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.... establish its bonafide by timely submission of the scheme of compromise and arrangement. He has pointed out such scheme was submitted on 24.5.2022, which is after almost six weeks from the date of order dated 13.4.2022. 19. The Learned Senior Counsel for Respondent No. 2 has adverted to the scheme of compromise and arrangement submitted by the Appellant to rebut. He has pointed out that the said scheme does not provide a better value to the legitimate stakeholders, since the scheme proposes to make payments to a number of unrelated parties, whose claims were not admitted during the CIRP and if such claims are disregarded and taken out from the total payments and then the Net Present Value (NPV) of the amount offered is considered, it will show that the resulting payments will not be better than the payments the bid offered by Respondent No. 2. He has also pointed out that while the proposed scheme proposes to make payment only to such homebuyers whose claims have been admitted by the Liquidator, it makes provision for payment to many other creditors, whose claims are not admitted during CIRP and also who are related parties of the corporate debtor. The Learned Senior Counsel for ....
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....ting with e-mail dated 20.4.2022 whereby Mr. Rakesh Kumar Agarwal requested certain information relating to claims from the Liquidator in order to prepare the scheme of compromise and arrangement. After a confidentiality undertaking was provided by the Appellant, a list of claims was provided to Mr. Rakesh Kumar Agarwal, the Appellant submitted a scheme to the Liquidator vide e-mail dated 24.5.2022. 23. It is relevant to note that the three weeks' time granted by the Adjudicating Authority for submission of the scheme of compromise and arrangement by the Appellant expired on 4.5.2022, and in view of complete silence on the part of Appellant since 2.5.2022 regarding submission of the scheme, the Liquidator was proceeding with the e-auction process. It was only on 21.5.2022, nineteen days after the last e-mail communication from Mr. Rakesh Kumar Agarwal to the Liquidator that Mr. Rakesh Kumar Agarwal sent an e-mail to the Liquidator, seeking more time for finalisation of the scheme. 24. It is also noticed that when the Appellant did not submit the scheme of compromise and arrangement within the allotted three weeks' time, which expired on 4.5.2022, the Liquidator issued a public no....
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....porate Debtor." 28. Thereafter, after the commencement of liquidation process vide order dated 31.1.2022, Mr. Rakesh Kumar Agarwal again sent a letter to the Liquidator on 3.3.2022, after passage of more than one month from the date of commencement of liquidation requesting to submit a scheme of compromise and arrangement, and upon the Liquidator expressing inability to accept such a scheme in view of the commencement and progress of liquidation, Mr. Rakesh Kumar Agarwal filed IA 115/2022 through another company 'Bankey Bihari Infrahomes Private Limited' seeking permission of the Adjudicating Authority for submission of a scheme of compromise and arrangement. This interlocutory application was disposed of by the Adjudicating Authority vide order dated 13.4.2022 with the following observations: - "This is an application filed by the "Bankey Bihar Infrahomes Private Limited" seeking a direction to the liquidator to consider the scheme propounded by the Applicant herein. Ms. Babita Jain, learned counsel for the Applicant present. Ms. Snehal Sharda, learned counsel appearing on behalf of the liquidator present. The liquidator is expected to act in accordance with the Liquidation....
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....ed such information with the counsel of Mr. Prince Jain, a creditor whose claim was not admitted during CIRP of the corporate debtor. 33. We also note that the Liquidator and the Adjudicating Authority have with due regard to fairness, natural justice and in consonance with the objectives of IBC, provided an opportunity through order in IA 115/2022, giving three weeks' time for the submission and decision on the purported scheme of compromise and arrangement as claimed by the Appellant which the Appellant failed to do in the time limit provided and was, thus, unable to establish his bonafide about his seriousness in proposing such a scheme. This has to be seen in the context of the fact that the liquidation order was passed on 31.1.2022, and that the prescribed time period for completing liquidation process was substantially over by this time. 34. Thus, in view of the fact that the Appellant neither submitted the scheme of compromise and arrangement within the stipulated time which was upto 4.5.2022 nor did he inform the Liquidator about the delay in submitting the scheme or seek any extension of time limit from the Adjudicating Authority, the intention and seriousness of the App....
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....o be completed in 24 months and provided to the homebuyers against their claims filed with the Liquidator. It is not at all clear as to how the homebuyers who have only paid part of the total cost will be treated and whether they will be required to pay any extra amount and what would be its quantum. 38. It is, therefore, noted that the purported scheme proposes to make payments to a number of related parties/unsecured creditors/not submitted claims upto an extent of 100% of admitted claimed amounts. Another issue in the proposed scheme is that it proposes to make payments within 90 days of approval of scheme whereas in the event of auction-sale the payments would be made promptly to claims in accordance with the 'waterfall mechanism' under section 53 of IBC. 39. The Learned Counsel for Appellant has cited the judgments of this Tribunal in the matters of S.C. Sekaran vs Amit Gupta & Ors. [CA (AT)(INS) 495-496/2018] and Y. Shivram Prasad vs. S. Dhanapal & Ors. [CA(AT)(Ins) 224/2018] wherein the Tribunal held that steps should be taken for the revival and continuance of the Corporate Debtor by protecting the Corporate Debtor from its management and from corporate death by liquidati....
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....gibilities which attach under Section 35(1)(f) read with Section 29-A would not apply when Section 230 is sought to be invoked. Such an interpretation would result in defeating the provisions of the IBC and must be eschewed. 72. An argument has also been advanced by the appellants and the petitioners that attaching the ineligibilities under Section 29-A and Section 35(1)(f) IBC to a scheme of compromise and arrangement under Section 230 of the 2013 Act would be violative of Article 14 of the Constitution as the appellant would be "deemed ineligible" to submit a proposal under Section 230 of the 2013 Act. We find no merit in this contention. As explained above, the stages of submitting a resolution plan, selling assets of a company in liquidation and selling the company as a going concern during liquidation, all indicate that the promoter or those in the management of the company must not be allowed a back-door entry in the company and are hence, ineligible to participate during these stages. Proposing a scheme of compromise or arrangement under Section 230 of the 2013 Act, while the company is undergoing liquidation under the provisions of the IBC lies in a similar continuum. Thu....