AI Drafter 
TaxTMI 
TaxTMI 
2022 (12) TMI 609
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....e order dated 31.05.2021 passed by the Adjudicating Authority, National Company Law Tribunal, Principal Bench, New Delhi in I.A. No.9010/2021 in (IB)/470(ND)/2019 (hereinafter referred to as NCLT). By the said order learned NCLT has allowed an application i.e. IA No.9021/2021 filed under Section 33(2) of the IBC Code. The said application was filed by Resolution Professional (hereinafter referred to as 'RP') namely Mr. Aishwarya Mohan Gahrana. It is appropriate to reproduce the order dated 31.05.2021 as follows:- "ORDER It is an IA filed u/s 33(2) of the Insolvency & Bankruptcy Code, 2016 ("the Code") by the Resolution Professional (RP) seeking liquidation order based on the resolution passed by the CoC in its 6th meeting held on 28.01.2021 with a requisite majority as contemplated under I&B Code, 2016. 2. On perusal of this application, it appears that this (IB)- 470(ND)/2019 was admitted on 08.11.2019 and this Applicant was appointed as IRP and he invited claims from the creditors and constituted CoC only of one Financial Creditor i.e. LIC Housing Finance Limited as the other Financial Creditor i.e. Dr. Arinjaya Jain was a related party to the Corporate....
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....re of the considered opinion that this is a fit case for liquidation, therefore, we hereby order for liquidation of the company with directions as follows: a. The Mr. Aishwarya Mohan Gahrana, holding Registration No.IBBI/IPA-002/1P-N00135/2017- 2018/10351 having [email protected] is appointed as the Liquidator in terms of Section 32 of the Code; b. Registry is directed to communicate this Order to the Registrar of Companies, NCT of Delhi & Haryana and to the Insolvency and Bankruptcy Board of India; c. The Order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and a fresh Moratorium under Section 33(5) of the Insolvency and Bankruptcy Code shall commence; d. This order shall be deemed to be a notice of discharge to the officers, employees and the workmen of the corporate debtor as per Section 33(7) of the Insolvency and Bankruptcy Code, 2016; e. The Liquidator is directed to proceed with the process of liquidation in a manner laid down in Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016 and in accordance with the relevant rules and regulati....
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.... Credit Billing Total in Rs. 1 April 2019 31,71,687/- 18,49,530/- 50,21,217/- 2 May 2019 39,77,753/- 19,58,928/- 59,36,681/- 3 June, 2019 32,70,450/- 18,76,906/- 51,47,356/- 4 July, 2019 43,02,166/- 19,63,676/- 62,65,842/- 5 August, 2019 45,10,666/- 19,68,947/- 64,79,613/- 6 Sep 2019 25,84,228/- 14,81,812/- 40,66,040/- 7 Oct 2019 20,92,020/- 14,09,413/- 35,01,433/- 8 01.11.19 - 15.11.19 87,33,348/- 92,517/- 88,25,865/- 9 16.11.19 - 30.11.19 6,20,223/- 21,563/- 6,41,786/- 10 01.12.19 - 15.12.19 7,05,052/- 6,634/- 7,11,686/- It is further case of the appellant that at the time when IRP took over the Corporate Debtor the hospital was having a strength of approximately 100 employees and doctors. The doctors strength has been reflected in a chart at running page 7 which is as follows:- S. No. Month/Period No. of Doctors 1 October 2019 17 2 1.11.19 to 15.11.19 15 3 15.11.19 to 30.11.19 8 4 December 19 5 It is further case of the appellant that during CIRP the RP instead of taking step to....
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.... attention to statement made in para Q at Page 26 of the Memo of Appeal which is quoted hereinbelow:- "Q. The Committee of Creditors meeting was conducted on 09.12.2019 despite the repeated request on behalf of the Appellant to take immediate steps with regard to continue operations of the Hospital, the same were ignored by the RP for the reasons best known to the RP. The fact that the payment was to be received to the tune of Rs. 1,78,50,211 Crores (approx.) from the Government Departments namely Delhi Police, Municipal Corporation of Delhi, Delhi Govt Employees Health Scheme, Central Industrial Security Force, Central Government Health Scheme, etc was simply ignored and no steps till date has been taken by the RP in this regard. The RP mentions the concern in the Minutes of the Meeting but fails to take any steps in support of the continuation of the operations of the Hospital." Learned counsel for the Appellant has also drawn our attention to running page 60 of the Memo of Appeal to show that in the Hospital upto month of October, 2019, there were 17 doctors. He further by way of referring to Page 61 of the Memo of Appeal tried to persuade the Court that till 15th No....
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....am Charitable Trust which offered for Rs.25 crores was turned down and the said Resolution Plan was rejected. Learned counsel for the appellant submits that in CIRP it is mandatory required for the RP to take all steps to see that the CD may continue as going concern and liquidation is last resort. However, the RP in the present case with malafide intention right from the very beginning was proceeding to see that the CD may proceed in liquidation instead of revival of the same. To substantiate his submission learned counsel for the appellant has referred to his written submission filed on 14.7.2022 wherein relevant portion of the Judgement of the Hon'ble Supreme Court reported in (2019) 4 SCC 17 in the matter of Swiss Ribbons Pvt Ltd and Anr Vs UOI & Others has been mentioned which is reproduced hereinbelow: "Therefore, maximization of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate deb....
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....he applications which are sub-judice before the Hon'ble Adjudicating Authority filed against the ex-directors of the CD for non-cooperation on their part, due to which the IRP/RP could not access various information/documents pertaining to the CD, details of which are as follows:- Sr No. Application Number Filed by Date of filing 1 CA No.177/2020 filed under Section 19(2) of IBC against the following a. Rajesh Narang( ex director of CD) b. Dr. Rakesh Saxena (ex director of CD) c. Gulshan Bansal (Chartered Account of CD) d. Krishna Kumar Jha (CEO of CD) The ex directors of the CD have not even filed their reply till date. RP Around January 02, 2020 2 IA No.5150/2020 filed under Section 60(5) of IBC with the prayer for providing relevant information/documents to the RP pertaining to the CD CoC November 23, 2020 Despite the evident non-corporation on the part of the ex-directors of the CD, the RP made his best efforts to revive the CD and prepared an Information Memorandum (IM) after collection of information from various sources and issued Expression of Interest on 2 (Two) occasion being on August 16, 2020 and again on September 14, 2020, ....
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.... to para 142 of judgement of Hon'ble Supreme Court passed in Kalpraj Dharamshi & Ors Vs Kotak Investment Advisors Ltd and ors. Civil Appeal No.2943-2944, 3138-3139m 2949-2950 if 2020 and Civil Appeal Nos 847-848 of 2021 which are reproduced hereinbelow: "142..................It has further been held, that the commercial wisdom of CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. 155. 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 be interfered with, excepting the limited scope as provided under Sections 30 and 31 of the I&B code." Similarly in the same para i.e. para 19 of the joint reply reference has been made to para 46 of a judgement of Hon'ble Supreme Court in Committee of Creditors of Essar Steel India Ltd through Authorised Signatory Vs Mr. Satish Kumar Gupta and other Civil Appeal No.8766-67 of 2019, which is quoted hereinbelow: "46................Thus, it is clear that when the Committee of Creditors exercises its comm....
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....in the present appeal has also been filed jointly by RP and Financial Creditor. This act of the RP is itself a glaring example of biasness. So far as conduct of the RP is concerned it can be deprecated on the point that after initiation of the CIRP when first Meeting CoC was to be held, the RP chose to visit the premises of the financial creditor and first CoC Meeting was held on 9th December, 2019 at Meeting Room of M/s LIC Housing Finance Ltd, Regional Office, 2nd floor, Jeevan Deep Building, Sansad Marg, New Delhi. In the said COC Meeting there was only one financial creditor, i.e. LIC Housing Finance Ltd. 2nd CoC Meeting was again held at the same place i.e. Meeting Room of LIC Housing Finance Ltd on 14.1.2020. At running page 94 of Memo of appeal it is evident from the resolution on 14.1.2020 i.e. 2nd Meeting of CoC that Committee expressed its intention to meet again on 25.1.2020 morning at 10 AM at the same place for 3rd Meeting of CoC. Meaning thereby that Meeting was to be held at Meeting room of M/s LIC Housing Finance Ltd. However, the proceeding of 3rd CoC which was held on 25.1.2020 indicates that Meeting of 3rd CoC was held at room of M/s Fair and Just Legal soluti....
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....ory whereas the appellant has taken specific stand that the hospital till the date of taking over by the IRP was running smoothly and generating fund also. The chart which has been brought on record in the Memo of Appeal reflects that the CD was running Febris Multispeciality Hospital of 150 beds and till when IRP was appointed the CD was generating revenue of 87 lakhs in the month of November, 2019. It is also evident from the fact disclosed in the Memo of Appeal that the strength of Doctors and staff/employees were also sufficient till the initiation of CIRP. However, immediately after IRP took charge it started reducing and within one or two months it was reduced to a negligible number. These facts are itself enough to draw an inference that the RP had given incorrect picture to the CoC in the Meeting. Moreover, in the 1st Meeting there was only one financial creditor i.e. LIC Housing Finance Ltd and this meeting was attended by both suspended directors of the CD in presence of Mr. Aishwarya Mohan Gaharana and Mr. Sharda Tyagi, legal advisor. In the 2nd CoC Meeting which was held on 14.01.2020 besides LIC Housing Finance Ltd two other financial creditors namely Siemens Fin....
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....hin one month and we hope it by August end. The Committee also raised the issue of the high cost of the valuation. The Resolution Professional appraised that the details about the appointment of the valuers were also placed before the second meeting of the committee of creditors. Further, we require valuers under all three classes as we have assets under all three classes land and building, plant and machinery and financial assets. Under the law, we require two valuers for each class. So we need to pay a total of six valuers. All valuers are required to value corporate debtor as a whole for their values as going concern as well as liquidation values. The work involved is not comparable to the routine valuation of certain and limited assets. Therefore, it seems a high cost." Item No.9 :To take note of the status of Forensic audit. The Resolution Professional informed that he received three proposals and appointed M.K. Agarwal & Company, New Delhi with the least amount of fee quotation. The auditor communicated to the Resolution Professional earlier about completion of about 70% work as of now. It is also informed that forensic auditor started work....
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....tal and was ready to spend appropriate funds for restoration of servicing of the existing facility at Febris Multispeciality Hospital and other offers were also given but same was also not accepted by the RP. The said proposal is at running page 119 to 124 of the Memo of Appeal. The ill intention of the RP is further evident on perusal of the proceeding of the 4th CoC Meeting held on 29th July, 2020 whereby unreasonable eligibility criteria under Section 25(2)(h) to invite prospective resolution applicants was included. Running page 109 of the Memo of Appeal i.e. part of the 4th CoC Meeting dated 29th July, 2020 depict regarding fixation of eligibility criteria which are as follows:- "a. A net-worth of Rs.5 Crores as per last audited balance sheet and turnover of Rs.10 crores as per last financial year and a record of profitability of last 3 financial years; or b. In case of any other person having net worth 5 crores of their own or holding company or promoters and having a sufficient means of finance in form of a bank balance or fixed deposit or sufficient fund from a committed source of finance of Rs.1 crore or more; Each person submitting an express....
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.... same was rejected. This offer had come in the month of January, 2021 whereas it has been noticed that the running hospital was made non-operational immediately IRP, who is presently RP, had taken charge of the CD. In hospital premises there were number of plant and machinery. Since it had become non-operational obviously from the month of December, 2019 to January, 2021 i.e. after lapse of more than one year certainly those plant and machinery without any operation must had been rusted and decayed due to inaction of the RP. There is no reason to come to the conclusion that even 7 storey huge hospital building was maintained during said period. Since for such a long period the hospital building, plant and machinery all had remained stand still naturally it suffered a lot, which can be one of the reasons for decrease in the value of the CD property. In the present case we have noticed that even during initial period of CIRP the appellant had offered Rs.32.5 crore. However, the said proposal was outrightly rejected. The proceeding of 2nd CoC held on 14.1.2020 reflects that the appellant had orally proposed its intention for making an offer of Rs.32.5 crores lump sum. It has been d....
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.... money paid by the patients. The hospital is a multispecialty hospital and in the present circumstances of Pandemic Covid-19 with extreme scarcity of hospitals and beds, this would go a long way to benefit the people of this city. Petitioner also undertakes that he will not take the control of the hospital or claim any right over it as the proceedings are pending before the NCLT and the Petitioner is only offering the services of his team of doctors and para-medical staff to make the hospital operational during this pandemic situation as a goodwill gesture. 3. Having heard learned counsels for both sides and looking into the facts and circumstances of the case, we hereby direct Respondent No.1 to take a decision with respect to the aforesaid offer of the Petitioner, subject to the undertaking given by him with regard to the contribution of funds and the control over the running of the hospital and also looking to the reply affidavit of Respondent No. 3 file in this petition. These aspects of the matter will be kept in the backdrop while taking a decision in the matter by Respondent No.1. Since the offer, if accepted, can be useful in the present circumstances, we hope and ....
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....the other Financial Creditor i.e. Dr. Arinjaya Jain was a related party to the Corporate Debtor. Subsequently, IRI' was appointed as RP in the First Meeting of CoC held on 09.12.2019, and he appointed two Registered Valuers to value the assets of the Company. 3. In furtherance of it, the RP prepared the Information Memorandum and apprised the CoC in its 4th meeting dated 29.04.2020 that the Copy of Information Memorandum may be obtained after submitting the confidential undertaking and Form G for inviting the expression of interest was published on 17.08.2020 after the approval of the CoC in same meeting. The Form-G was again issued on 14.09.2020 after the discussion held in the fifth CoC meeting held on 07.09.2020. This authority also extended the CIR Period for further 90 days and excluded the period from 25.03.2020 to 31.07.2020 due to Covid-19. In furtherance to the publication of Form G, the resolution professional received an expression of interest from 4 prospective resolution applicants. However, the resolution professional received two proposed resolution plan pursuant to the final list of prospective resolution applicants. In the 6th CoC dated 28.01.2021, the....
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....olvency and Bankruptcy Code, 2016 and in accordance with the relevant rules and regulations. f. The Liquidator shall follow up and continue to investigate the financial affairs of the Corporate Debtor in accordance with provisions of Section 35(1) of the Code. g. The liquidator shall also follow up the pending applications for their disposal during the process of liquidation including initiation of steps for recovery of dues of the Corporate Debtor as per law. h. The Liquidator shall submit a Preliminary Report to the Adjudicating Authority within seventy-five days from the liquidation commencement date as per Regulation 13 of the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016; i.Copy of this order be sent to the financial creditors, corporate debtor and the Liquidator for taking necessary steps; j. IA-901/2021 filed in IB-470/(ND)/2019 is disposed of in terms of the aforesaid terms." (B.S.V Prakash Kumar) Acting Chairperson (Hemant Kumar Sarangi) Member (Technical)". "Order dated 25.05.2021: It is an application filed by an ex-director Mr. Rakesh Saxena stating tha....