TaxTMI 
TaxTMI 
2023 (5) TMI 1159
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....o. 3942/MB/2019. By I.A. No. 691/2021, the Appellant has challenged rejection of Resolution Plan submitted by the Applicant. 2. Brief facts of the case are:- (i) The Corporate Debtor LB Industries Pvt. Ltd. is a registered MSME. A Company Petition under Section 9 of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "The Code") was filed by the Wood Preservers Private Limited-Operational Creditor against the Corporate Debtor. (ii) On 13.11.2019, Union Bank of India issued a Show Cause Notice against the Appellant, Corporate Debtor and other directors of the Corporate Debtor asking to show cause within 15 days as to why they may not be declared defaulter as per guidelines of the Reserve Bank of India. (iii) On 19.11.2019, Company Petition filed by the Operational Creditor was admitted. Show Cause Notice dated 13.11.2019 was replied by the Appellant. After issuance of Form-G, the Appellant submitted a Resolution Plan on 04.08.2020. A Writ Petition No. 2248 of 2020 was filed challenging the show cause notice dated 13.11.2019 which was disposed of by the High Court observing that Union Bank of India to follow the RBI Guidelines. (iv)....
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.... 2022. The Adjudicating Authority directed for Liquidation as no Resolution Plan had been approved in the CIRP. Resolution Professional was appointed as Liquidator. (ix) Against the Order dated 20th January, 2022 passed in I.A. No. 173 of 2021, no Appeal has been filed. 3. We have heard Ms. Fatima Barodawalla, Advocate for the Appellant, Mr. Arvind Nayar, Sr. Advocate with Mr. Manish Srivastava, Advocate for Union Bank of India. 4. Learned Counsel for the Appellant submits that on the day when Resolution Plan submitted by the Appellant came for consideration before the CoC, there was no declaration by Union Bank of India as willful defaulter it was only notice dated 13.11.2019 issued by Union Bank of India which was immediately objected by the Appellant and ultimately order declaring the promoter and director as willful defaulter was passed on 25.05.2021. The decision of the CoC that Appellant is not eligible under Section 29A is erroneous decision. Appellant was entitled to submit a Resolution Plan which was not considered on merits. It is further submitted that against the order dated 25.05.2021 declaring promoter and directors as willful defaulter, review applicat....
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....tors and the Appellant was dated 13.11.2019. Notice was on the subject reporting as willful defaulters. Show cause notice stated that outstanding sum is Rs. 85,38,51,794.80/- and the account being NPA and the Appellant and CD failed to regularize account in spite of repeated requests. The show cause notice stated following: "As per the guidelines of Reserve Bank of India, list of defaulting firm/company along with the names of current directors and names of directors associated with the company at the time the account was classified as defaulter is to be furnished to Credit Information Companies (CICs) for circulation amongst the Banks/Fls. This will make you ineligible to raise further loan from banks and financial institutions in future. Bank also reserve its right to publish your photograph with name as willful defaulter of the bank in daily newspaper for the information of public in general and bank may also disclose the information pursuant to the requirements of any statute/law or court/tribunal order without giving any prior notice to you. In case of non-receipt of any communication to the contrary from your end within 15 days of this letter, we shall decla....
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....y the Review Committee must be the one which is manned by an officer different from the one who as a member of the First Committee of the Bank had passed the order. Reliance has been placed upon the case of SBI ..vs. Jah Developers (P) Ltd., reported in (2019) 6 SCC 787. 3. Issue notice for final disposal at admission stage to the respondents, returnable after four weeks. 4. Shri U.M.Aurangabadkar, learned ASGI waives service of notice for the respondent No.4. 5. Meanwhile, there shall be interim stay to the effect and operation of the impugned orders, until further orders." 12. The order of the High Court dated 20th September, 2021 is still in operation as submitted by Learned Counsel for both the parties. In view of the order of the High Court, the order of identification committee dated 25th May, 2021 as well as the Review Order dated 1st July, 2021 is not in operation. It is thus clear that in view of the Interim Order passed by the High Court, Appellant cannot be held to be willful defaulter as on date. 13. Although we have found that Appellant was not willful defaulter at the time he submitted the Resolution Plan and at the time his plan came ....