TaxTMI 
TaxTMI 
2023 (7) TMI 313
X X X X Extracts X X X X
X X X X Extracts X X X X
....he present appeal is preferred by the Appellant under section 61(1) of the Insolvency and Bankruptcy Code, 2016 (in short "IBC") aggrieved by the order dated 8.2.2023 (hereinafter called "Impugned Order") passed by the Adjudicating Authority (NCLT, New Delhi) in I.A. No. 122/2023 filed under CP(IB) No. 1367(PB)/2018. 2. The Appellant Mr. Harish Sharma has filed this appeal in the capacity of operational creditor and lead member of the consortium which seeks to submit a scheme of arrangement under section 230 of the Companies Act, 2013 vis-à-vis corporate debtor. The consortium comprises of the Appellant and Gulshan Investment Company Limited, Montage Enterprises Private Limited and Anantjeet Nutriments LLP and the Appellant is the Power of Attorney Holder of the three last named companies. 3. In brief, the case of the Appellant is that he, by virtue of two distinct Assignment Agreements both dated 15.12.2022 executed with KM Contractors and SNI Infratech respectively, became an operational creditor of the corporate debtor M/s. C.C Constructions Limited. The Appellant has stated that the corporate debtor went in Corporate Insolvency Resolution Process (in short "CIRP") ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....held that a scheme under section 232 of The Companies Act, 2013 is a valid method of revival of the corporate debtor, and the IBBI (Liquidation Process) Regulations, 2016 (in short "Liquidation Process Regulations") and a scheme under section 230 of The Companies Act, 2013 should be seen harmoniously for revival of the corporate debtor. The Learned Counsel has also cited the judgment of this Tribunal in the matter of Y. Shivaram Prasad v. S. Dhanpal & Ors., 2019 SCC Online NCLAT 172, which lays down that in case the liquidation process under section 230 is taking more time, it is open to the Adjudicating Authority/Tribunal to extend the period of liquidation if there is a possibility of approval of the scheme of arrangement. 7. The Learned Counsel for Appellant has further referred to the judgment of this Tribunal in the matter of Kshitiz Gupta (Liquidator in the matter of Abhishek Corporation Ltd.) v. Asset Reconstruction company (India) Limited and Ors., (2019) ibclaw.in 217 NCLAT, wherein it is held that it is open to the Adjudicating Authority to grant more than 90 days' time period for approval of a scheme of arrangement and the sale of assets may be done only if the Liquid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....revival of the corporate debtor. 10. The Learned Counsel for Respondents No. 1 and 2 (in short "Respondents") has argued that the liquidation order in the present case was passed by the Adjudicating Authority on 7.10.2022 and 90 days' period for proposing a scheme for compromise and arrangement as provided in Regulation 2-B of the Liquidation Process Regulations expired on 4.1.2023. He has clarified that the publication of a notice on 26.10.2022 inviting submission of a scheme of compromise and arrangement was to only apprise the general public about such an opportunity, but it was not intended to serve as the start date of initiation of the process for submission of a scheme under Regulation 2-B, and therefore, the Appellant has misconstrued this notice to mean that the 90 days' period for submission of scheme of compromise and arrangement started from 26.10.2022. He has further submitted that no scheme has been submitted by the Appellant till the last date of hearing before this Tribunal i.e. by 23.5.2023, either before the secured creditors, who are members of the "Joint Lenders' Forum" or the Stakeholders Consultation Committee or the Liquidator and therefore, even though th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ditors and members. - (1) Where a compromise or arrangement is proposed- (a) between a company and its creditors or any class of them; or (b) between a company and its members or any class of them, the Tribunal may, on the application of the company or of any creditor or member of the company, or in the case of a company which is being wound up, of the liquidator, appointed under this Act or under the Insolvency and Bankruptcy Code, 2016, as the case may be, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs. Explanation.-For the purposes of this sub-section, arrangement includes a reorganisation of the company's share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those methods. (2) The company or any other person, by whom an application is made under subsection (1), shall disclose to the Tribunal by affidavit- (a) all material facts relating to the company, such as the latest financial position of the com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n'ble Supreme Court in the matter of Arun Kumar Jagatramka v. Jindal Steel & Power Ltd. (supra), which is as follows:- "68. Now, it is in this backdrop that it becomes necessary to revisit, in the context of the above discussion the three modes in which a revival is contemplated under the provisions of the IBC. The first of those modes of revival is in the form of CIRP elucidated in the provisions of Chapter II IBC. The second mode is where the corporate debtor or its business is sold as a going concern within the purview of clauses (e) and () of Regulation 32. The third is when a revival is contemplated through the modalities provided in Section 230 of the 2013 Act. A scheme of compromise or arrangement under Section 230, in the context of a company which is in liquidation under the IBC, follows upon an order under Section 33 and the appointment of a liquidator under Section 34. While there is no direct recognition of the provisions of Section 230 of the 2013 Act in the IBC, a decision was rendered by NCLAT on 27-2-2019 in Y. Shivram Prasad v. S. Dhanapal (herein referred to as "Y. Shivram Prasad"). NCLAT in the course of its decision observed that during the liquidation ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upreme Court in the matter of Arun Kumar Jagatramka v. Jindal Steel & Power Ltd. (supra) also refers to the judgment of this Tribunal in the matter of Y. Shivaram Prasad v. S. Dhanpal & Ors (supra), wherein the following is held by this Tribunal:- "17. Normally, the total period for liquidation is to be completed preferably within two years. Therefore, in "S.C. Sekaran v. Amit Gupta 21 Company Appeal (AT) (Insolvency) Nos. 224 & 286 of 2018 & Ors." (Supra), this Appellate Tribunal allowed 90 days' time to take steps under Section 230 of the Companies Act, 2013. In case, for any reason the liquidation process under Section 230 takes more time, it is open to the Adjudicating Authority (Tribunal) to extend the period if there is a chance of approval of arrangement of the scheme." (emphasis supplied by us)." 17. Looking at the above stated judgments of Hon'ble Supreme Court and Hon'ble Appellate Tribunal, we note that the possibility of revival of a corporate debtor under liquidation has been considered as a valid mode of revival and during liquidation process, a scheme of compromise or arrangement in terms of section 230 of The Companies Act, 2013 is a distinct and cle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eir consent of the 75% threshold as required under section 230(2)(b) of The Companies Act if it was in possession of such a scheme. We are not clear as to why he did not propose a scheme to the Liquidator or the Stakeholders Consultation Committee. We further note that as late as 23.5.2023 when this matter was finally heard by this Tribunal, the Appellant had neither submitted nor shown any evidence of such a scheme of arrangement being ready for submission. Therefore, merely stating that the Appellant was ready to propose such a scheme, if it was granted extension of timeline, appears to be an empty statement not supported by the existence and readiness of such a scheme. We further, note that the Stakeholders Consultation Committee in its meeting on 12.5.2023 took a decision with 100% of the members voting to place the corporate debtor for sale as a going concern, through auction and this auction was scheduled to take place on 12.6.2023. 20. We take note of the judgments cited by the Appellant in support of this case in the matters of Kshitiz Gupta (Liquidator in the matter of Abhishek Corporation Ltd.) (supra) and Bharat Sharma, Resolution Applicant (supra), wherein the possib....