TaxTMI 
TaxTMI 
2022 (4) TMI 1485
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....nder section 7 of Insolvency and Bankruptcy Code, 2016 against Manthan Broadband Services Pvt. Ltd. for initiation of Corporate insolvency Resolution Process (CIRP). 3. Alliance Broadband Services Pvt. Ltd., being the petitioner Financial Creditor provided the Corporate Debtor with a loan for Rs. 10.20 Crore. On default of the same, Corporate Insolvency Resolution Process (hereinafter known as CIRP) against the Corporate Debtor was initiated vide this Adjudicating Authority's order dated 18.09.2019 in C.P. No. 1634/KB/2018. Mr. Shashi Agarwal was appointed the Interim Resolution Professional and on his resignation the applicant became the Resolution Professional. 4. Thereafter the Hon'ble National Company Law Appellate Tribunal, vide order dated 26.09.2019, directed the Interim Resolution Professional to not constitute Committee of Creditors (hereinafter known as CoC) if, not already constituted. The said embargo was lifted vide Hon'ble National Company Law Appellate Tribunal's order dated 22.10.2019. 5. The 180 day CIRP time period expired on 18.03.2020, after which the lockdown started. The Tribunal, vide order dated 1.11.2020 extended the CIRP period by ....
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.... the of objects IBC. Resolution Professional has rejected the EOI without presenting it to the CoC and without appreciation on merits, in spite of the fact that 21 days were remaining for the completion of 270 days period. It is well established that all attempts have to be made towards achieving a successful resolution of Corporate Debtor before liquidation is considered. The Resolution Professional has not adopted the said approach. Hence the instant application has been filed seeking 2 weeks' time to submit a resolution plan, direction upon Resolution Professional to consider the said resolution plan, and dismissal of IA 356/KB/2021. 13. Furthermore, an application, IVN. 4/KB/2021 has been filed by the intervenor, Alliance Broadband Services Pvt. Ltd., praying for the following reliefs: a) the Applicant Financial Creditor be permitted to intervene in interlocutory application I.A. 379/KB/2021; b) if necessary, Applicant Financial Creditor be added as a party respondent in I.A. 379/KB/2021; c) I.A. 379/KB/2021 be dismissed. 14. The intervener here has a claim of Rs. 11.93 crores secured by way of pledge of equity shares and mortgage by deposit....
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....lear on the issue. c. Hearing of IA 356/KB/2021 and IA 379/KB/2021 together and disposal of both within 3 months as ordered by Hon'ble HC in WPO 1767 of 2021. 20. The Applicant in IA 99/KB/2022 claims to be a secured operational creditor of Corporate Debtor, who has contributed to CIRP Cost, and has an admitted claim of Rs. 29 crores). The said applicant has submitted that on publication of form G, last date of submission of EOI was set on 21.12.2020. After the expiry of said date, ICNCL filed IA. 221/KB/2021 for seeking permission to submit EOI. This Tribunal allowed the same but the company withdrew from the process. Subsequently, Hathway jumped into the scenario with desire to submit EOI and demanded 2 weeks time. The Resolution Professional rejected the attempted tactics on 26.02.2021. 21. The applicant in I.A. 99/KB/2022 has submitted that since till 538 days of CIRP no resolution plan was received, CoC passed resolution to liquidate the Corporate Debtor at the 11th CoC meeting dated 11.03.2021 accordingly, IA 356/KB/2021 was filed on 17.03.2021 after 546 days of CIRP. Again after staying silent till 24.03.2021, Hathway filed IA 379/KB/2021 with contradictor....
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....application. It is also stated by the applicant that if permitted by the Adjudicating Authority, it will deposit a sum of Rs. 10 Crores to demonstrate the genuine, intent and motive of the Applicant. 28. The relief sought by the applicant in the above application is opposed by Alliance Broadband Services Private Limited on the following grounds;- i. Alliance, though a Financial Creditor, could not be placed on the CoC because Corporate Debtor holds shares in Alliance. However, the same shares are pledged with Alliance for a substantial loan obtained by the Corporate Debtor. Alliance also has equitable mortgage of land owned by CD at Tajpur. Initially, though Corporate Debtor offered to settle the matter with Alliance by making payment of the debt but this was not done. ii. The application by Indian Cable Net Company Limited [ICNCL] is a mala fide attempt to delay and scuttle the CIRP of the Corporate Debtor. iii. On an earlier occasion, ICNCL had filed IA No. 221/KB/2021 inter alia, seeking extension of time to file a Resolution Plan in respect of the Corporate Debtor. On February 22, 2021 considering the fact that ICNCL was prevented from filing the E....
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....ct from 1.11.2020. 6. 15.12.2020 date of EOI- Form G publication 7. 21.12.2020 Last date of receipt of EOI 8. 22.12.2020 * 8th Meeting- only 1 EOI submitted. Atria submitted EOI- Resolution Professional said that information memorandum will be shared with Atria on the basis of audited financials for year ended 31 March 2017. * Provisional list of PRAS initiated by Resolution Professional 9. 21.01.2021 Atria withdrew from CIRP via email. 10. 25.01.2021 * 9th Meeting held- ICNCL's interest in submitting Resolution Plan is discussed. Said interest interest was presented via email dated 25th January, 2021 (on 266th day of CIRP) * ICNCL has not submitted EOI. 11. 25.01.2021 Last date of submission of Resolution Plan 12. 5.02.2021 IA 221/KB/2021 was filed by ICNCL for permission to submit resolution plan. 13. 9.02.2021 vide order in IA 142/KB/23021, exclusion of 50 days was ordered. CIRP now scheduled to expire on 19.03.2021 14. 22.02.2021 in IA 221/kb/2021, ICNCL was allowed 5 days to submit Resolution Plan. Accordingly, Resolution P....
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....IA 356/KB/2021 and IA 379/KB/2021 be heard together on same date. 27. 21.02.2022 I.A. 193/KB/2022 has been filed by ICNCL seeking leave to submit a resolution plan within two weeks from the date of order 30. Ld. Senior Counsel Mr. Jishnu Saha strenuously argued that his client i.e. Hathway has reasons to believe his request for putting up a Resolution Plan sent to the RP was not put before the CoC and this has prejudiced him and thus applicant has a right to approach this Authority and invoke the powers of this Tribunal under Section 60(5) of Insolvency and Bankruptcy Code Read with Section 11 of NCLT Rules to seek the direction to RP place and to grant the relief as sought in the present case. However, this submission was opposed by the Resolution Applicant. In order to determine the veracity and correctness of the argument of the Ld. Senior Counsel appearing for the applicant, this Adjudicating Authority summoned the record i.e. minutes of the CoC meetings and it have been produced before us and thus we had to opportunity to examine these minutes. 31. From the above facts emanating from record the picture that emerges is summarized as under:- i. Hathway Ca....
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....Star said that they have waited for long and have even contributed/agreed to contribute costs for smooth running of CIRP of Manthan. However, even after best efforts the Resolution Plan/revival for Manthan could not happen within the timelines of IBC, 2016 including seeking extension and exclusion. Both are of the view to opt for liquidation of Manthan as it is the only option left. Sony and Star are not in a position to contribute any further costs as indicated in the last meeting of CoC. vii. CISCO also stated that even after best efforts by all, it seems chance of resolution/revival is remote although there is a new bidder inform of Reliance Jio which has submitted its EOI. viii. In view of the request from CISCO, it was decided to convene 11th meeting of CoC on 8th of February, 2021 at 3 PM which was agreed unanimously. 32. From the minutes of the 11th meeting of CoC it is emerges and is reproduced hereafter. i. At internal Page-4 of these minutes the CoC and other creditors deliberated in details all efforts put by the creditors to arrive at a successful and viable resolution plan within the framework of IBC, 2016 in spite of absolute non-cooperat....
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....9, the Head Office has been under lock and key by the landlord since October, 2019 and without electricity and water and absolutely non habitable till date, the access to the office where all the records of the Corporate Debtor are kept has been made available only since 23rd November, 2020. Full cooperation was provided for valuation exercise to RP by providing list of assets of the Corporate Debtor and also site visits. Necessary efforts for financials for FY 2017-18 and FY 2018-19 are being put. The erstwhile Directors of the Corporate Debtor are also incurring costs for towards counsels consultation and drafting of the petition to challenge the Illegal rights Issue by Alliance Broadband Services Pvt. Ltd. so as to appeal against the same and seek Direction from the Hon'ble NCLT for revoking of the Illegal Rights Issue which if granted will restore the Corporate Debtor to be the majority shareholder. The liquidation process is going to be long and painful and non-beneficial for all the creditors and it will kill any opportunity for revival of the Corporate Debtor. The 10.09 acres of the 13.5 acres Tajpur land is a converted land wherein the valuer has been informed that he s....
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....e through e-voting as it wanted to understand the latest provisions of law. The sole CoC member further communicated that the result would be communicated through email to RP on or before 6 pm (IST) on 11.03.2021. Hence the following resolution was put on e-voting: "RESOL VED THA T the CoC of Manthan Broadband Services Private Limited hereby approves that liquidator to be appointed by Hon'ble Adjudicating Authority would be entitled to a fee as prescribed under Regulation 4(2) of IBBI (Liquidation Process) Regulations, 2016. It is further evident from the minutes of this meeting of the CoC and the same is reproduced hereinafter. After much discussions and deliberations, the CoC arrived at following conclusions: a. There are no operations of the Company since mid of FY 2018-19 as per records. There is no running business of the Corporate Debtor. Hence the business of the Corporate Debtor cannot be sold off as a going concern within the meaning of Regulation 31(1) of the IBBI (Liquidation Process) Regulations, 2016. b. The CoC recommends to sell the Corporate Debtor under Regulation 32 C of the IBBI (Liquidation Process) Regul....
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....his regard. RP also stated that till date no contribution for running CIRP/funding of legal costs from board of directors (suspended) has been taken till date. It was also noted by members of the CoC that CIRP costs including fees of RP would accrue till the date of approval of resolution plan by Hon 'ble Adjudicating Authority/passing of liquidation order by Hon'ble Adjudicating Authority. 34. From the above minutes of the meetings of the CoC it is apparent that in spite of their being a request by applicant to put in a Resolution Plan and request by one director of the Corporate Debtor to consider this request to save the Corporate Debtor from liquidation, the CoC by 100% voting in its commercial wisdom took a conscious decision to go in for liquidation of the Corporate Debtor. 35. In the matter of Shashi Dhar Vs. Indian Overseas Bank and Ors., the Hon'ble Supreme Court has held that the legislature while enacting the IBC, consciously does not provide any ground to challenge the commercial wisdom of the individual Financial Creditors or the collective decision of the CoC before NCLT and the decision of the CoCs commercial wisdom has been made non-justiciable. ....