TaxTMI 
TaxTMI 
2023 (12) TMI 313
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....lution Professional has rejected the IA No.3787 of 2022. Aggrieved by the aforesaid order, this Appeal has been filed. 2. Brief facts of the case necessary to be noticed for deciding this Appeal are:- 2.1. 'Osian's Connoisseurs of Art Private Limited', the Corporate Debtor was founded in 2000. Corporate Debtor was in business of artworks and has its own auction house and the centre for research and documentation. The Corporate Debtor sponsored a private trust called 'Osian Art Fund' under the Indian Trusts Act, 1882. 'Oseta Investments Trustee Company Pvt. Ltd.' ("Oseta" or "Trustee") for short) was appointed as a Trustee of the Trust. The Trust Deed was executed on 10.03.2006 between the trustee and the Corporate Debtor and an Asset Management Agreement dated 08.06.2006 was executed between Oseta and the Corporate Debtor under which the Corporate Debtor was to act as an Asset Management Company of the Trust ('Osian Art Fund'). The Corporate Debtor launched a fund, "The Osian's Art Fund Scheme Contemporary 1" inviting subscription from private investors in order to make investments in artworks and an amount of Rs.1,02,40,00,000/- was collected from 656 investors for the said purp....
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....hat the amount from the Art Fund was considered in the resolution plan, which provides that all claims arising on account of OAF shall be paid out of the proceeds of sale of assets belonging to OAF and that no valid claims arising out of SEBI's order dated 28.05.2021 were received. Resolution Plan having been approved by the CoC in the CIRP, the Resolution Professional filed an IA No.2645 of 2022 before the Adjudicating Authority for approval of the Resolution Plan. On 12.12.2022, SEBI filed an IA No.3787 of 2022 before the Adjudicating Authority where following prayers have been made:- "i. That this Hon'ble Tribunal be pleased to declare that the sum of Rs. 30,86,62,832/-(Rupees Thirty Crore Eighty Six Lakh Sixty Two Thousand Eight Hundred and Thirty Two only), along with the interest at the rate of 10% per annum on the principal amount collected from the investors, from the date when the amount to such investors first became due and till the date of closure of its scheme, to the Investors of 'Art Fund' which is subject matter of the SEBI Order dated 28.05.2021 be kept outside the resolution process/plan as it does not form part of the properties and assets of the Co....
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....nce, the said amount does not belong to the assets management company i.e. Corporate Debtor by virtues of clause (a) of explanation to Section 18 of the IBC which provides that asset held in trust by the Corporate Debtor shall not be included in the assets of the Corporate Debtor, hence, the Resolution Professional was obliged to keep apart the total investment as investors to be returned under the Scheme to the investors. It is submitted that due to the above reason, the prayer was made to keep Rs.30,86,62,832/- apart from the assets of the Corporate Debtor which application has wrongly been rejected by the Adjudicating Authority. It is submitted that all inventories of the OAF i.e. trust having come in the hands of the Corporate Debtor which has been handed over to the Resolution Professional, the Resolution Professional has to keep the aforesaid amount separately and not to deal the said amount in the Resolution Process of the Corporate Debtor. It is submitted that the order dated 28.05.2021 passed by the Appellant directing for refund to the investors along with the interest have become final which need to be complied with. It is submitted that since the assets of the OAF i.e. ....
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....he parties and perused the record. 7. Before we proceed to enter into the respective submissions of both the parties, it is relevant to notice the order passed by the Appellant dated 28.05.2021 under Section 11 and Section 11B of the SEBI Act, 1992. Directions issued by the SEBI in the said order is contained in paragraph 16. Paragraphs 16 to 19 of the order are as follows:- "16. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11 and 11B read with Section 19 of the SEBI Act, 1992 and Regulation 65 of CIS Regulations, hereby issue the following directions: a. Osian shall refund the balance amount to remaining Investors. Osian shall also pay on the total principal amount collected from each of the remaining investors, an interest at the rate of 10% per annum, from the date when amount to such Investors first became due and till the date of closure of its scheme. The aforesaid balance amount shall be refunded within a period of Six months from the date of this order and the aforesaid interest on total amount shall be paid within a period of Nine months from the date of coming into force of this order. b. Osian shall file winding up and ....
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....orporate Debtor was to comply the order within six months. The direction under paragraph 16(a) came into force only on July 2021 and before the period of six months was expired. CIRP against the Corporate Debtor commenced on 19.01.2021. The Appellant is well informed about the CIRP of the Corporate Debtor. Appellant himself has brought on record a letter dated 20.05.2022 sent by the Suspended Director of the Corporate Debtor informing about the commencement of the CIRP. Learned Counsel for the Appellant has pressed his submission that the Suspended Director has informed the Appellant that all the other assets and liabilities have been handed over to the Resolution Professional. The Appellant vide its e-mail dated 27.09.2022 asked the Resolution Professional to send the form required for filing claims. The e-mail dated 27.09.2022 is as follows:- "From: MEDHA SONPAROTE Sent: 27/09/2022 15:05 To: [email protected] Cc: SHRADDHA JOSHI Subject: Refund to investors as per SEBI order dated 28/05/2021 Sir/Madam, SEBI has passed an order dated 28/05/2021 (copy attached). Out of the total amount of Rs.1,02,40,00,000/- collected by Osian from the 656 Investors. An amou....
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....l the facts of the case and plea taken by the Resolution Professional. The Resolution Professional in its Affidavit has reiterated that the monies in the OAF do not form part of the assets of the Corporate Debtor and they have not been recorded in the information memorandum dated February, 2022 prepared under the IBC. Resolution Professional has further pleaded that Pipara & Co. LLP. Chartered Accountants has been directed to carry out a forensic audit with a view to investigate the transactions between the Corporate Debtor and OAF and a report has been submitted by forensic audit. It is useful to extract pleadings in paragraphs 6 and 7, which are to the following effect:- "6. In the aforesaid background and in response to the limited issue raised before the Hon'ble Tribunal on the OAF monies being available with the Corporate Debtor and/or considered as an asset of the Corporate Debtor, I say and submit that the monies under the OAF do not form part of the assets of the Corporate Debtor and have accordingly not been recorded in the Information Memorandum dated February 2022 prepared under the Code: Further, Pipara & Co. LLP. Chartered Accountants have carried out a forensic ....
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....tors fur collective investment by way of acquisition, holding, management, trading or disposal of Indian and foreign art or any other property..". (Ref: Pg. 19) "II. The Trustee Company is responsible for the management of the Art Fund and for providing information to the Unit Holders, the Sponsor, and any other regulatory body and to ensure compliance by the Art Fund AMC of all statutory formalities. (Ref.: Pg. 19) "II. The Trustee Company, through the AMC is, inter alia, empowered and entitled to: (i) "Pay all costs, charges expenses and outgoings of and incidental to the administration and execution of the Trust and the management and maintenance of the Trust Property and incurred for the same (including remuneration of the Trustee Company and the AMC)..." (Ref.: Pg. 20) (o) "Take into its custody and/or control all the capital, assets. property of the scheme floated by the Art Fund and hold the same in trust for the Unit Holders in accordance with the Trust Deed." (Ref: Pg. 22) "D. I. The AMC shall manage the schemes of the Art Fund in accordance with the provisions of the Asset Management Agreement, the Trust Deed and the objectives of each scheme option. The AM....
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....ution Plan, the Resolution applicant shall take over the management of the Corporate Debtor and shall once again become the Asset's Manager of OAF and at such time the SRA would then be able to take successful steps towards the execution of the SEBI Order and the monies may be refunded to the investors. Since, the issue of approval of Resolution Plan is subjudice before this Tribunal, this Tribunal is not expressing anything about the entitlement of the Corporate Debtor to continue as the Asset's Manager of the OAF. 4. As rightly contended by the RP, SEBI cannot insist for compliance of its order by RP after commencement of moratorium and knowing well that the Corporate Debtor is merely an Asset's manager of the OAF. The above application is nothing but an illegal attempt by SEBI to enforce the order knowing well that the moratorium U/s 14 has kicked in against the Corporate Debtor and no legal proceedings can be instituted or continued against Corporate Debtor." 14. The Appellant in its application had prayed to keep apart the amount of Rs.30,86,62,832/- as if the said amount belonging to OAF has been received by the Corporate Debtor and need to be separated and se....