TaxTMI 
TaxTMI 
2024 (2) TMI 677
X X X X Extracts X X X X
X X X X Extracts X X X X
.... aggrieved by the Impugned Order dated 03.08.2021 passed by the National Company Law Tribunal, Court No. V, Mumbai Bench (in short 'Adjudicating Authority') in C.P. No. 1352/(IB)-MB-V/2020, whereby the Respondent No. 2/ Dolphin Marine Foods and Processors (India) Private Limited and who is the Corporate Debtor ordered to undergo to the Corporate Insolvency Resolution Process (in short 'CIRP'). The Appellant is the Member of Suspended Board of Directors of the Corporate Debtor. 2. Heard the Counsel for the Parties and perused the records made available including the cited judgements. 3. It is the case of the Appellant that the Corporate Debtor was established on 12.12.1996 as MSME company and was engaged in the business of fish processing and exporting to various countries. The Corporate Debtor obtained cash credit facilities from time to time from the Respondent No. 1 and also repaid part amount to the Respondent No. 1. However, during financial year 2017-18, the Corporate Debtor faced financial problem due to notice by the Maharashtra Pollution Control Board, hence, the processing plant of the Corporate Debtor was stopped. 4. It is the case of the Appellant that during the fina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....odified/ enhanced from time to time the last sanction being vide letter dated 30.03.2017 with total facility availed by the Corporate Debtor was Rs. 11 Crores. The Respondent No. 1 stated that the Corporate Debtor failed to repay the outstanding dues from time to time despite all encouragement from the Respondent No. 1 and due to failure of the Corporate Debtor in making payments, the account of the Corporate Debtor was declared NPA on 30.04.2018. 13. The Respondent No. 1 submitted that due to Corporate Debtor's non-payments, the Respondent No. 1 was compelled to initiate under SARFAESI Act, 2002 on 19.06.2018 and issued notice to the Corporate Debtor for outstanding amount of Rs. 13,26,33,585.12/- . 14. The Respondent No. 1 refuted the charge of the Appellant that the Respondent No. 1 is trying to drag the Corporate Debtor into unnecessary CIRP and subsequently into liquidation and mentioned that on the contrary he was trying to facilitate the revival of the Corporate Debtor and extended permission for 'Holding on Operations' with 25% cut-back on 23.04.2019, however, there was not much improvement in situation and therefore, the Respondent No. 1 issued a Recall Notice on 03.07.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tively without considering the amount paid towards the recovery as wrongful alleged by the Appellant. 20. The Respondent No. 1 also submitted that the calculation of interest are performed electronically by centralised computer system of the Bank and there is no human intervention therefore, the Appellant's allegation regarding erroneous calculation of interest is misleading. 21. Concluding his arguments, the Respondent No. 1 submitted that the Impugned Order has been passed by the Adjudicating Authority after due consideration of all facts and the law and taking into account that there was clear debt of more that Rs. 1 Crore which resulted into default and therefore the Adjudicating Authority through well reasoned speaking order, admitted his application filed under Section 7 of the Code. 22. The main issue before this Appellate Tribunal is whether the Adjudicating authority was right in admitting the application under Section 7 of the Code of the Respondent No. 1 or the application should have been rejected on the ground that there was no debt and default by the Corporate Debtor. 23. From the averments made before us, we have noted that the Corporate Debtor has been availing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n by the Adjudicating Authority. We find from the Impugned Order that the Adjudicating Authority has gone into these aspects and thereafter correctly came to the conclusion of debt and default. 27. We note that total outstanding principals amount was Rs. 8.77 Crores and outstanding interest component were Rs. 3.61 Crores thus the total outstanding dues payable by the Corporate Debtor to the Respondent No. 1 was Rs. 12.38 Crores, which is more than the threshold limit of Rs. 1 Crore as provided in the Code for accepting the application filed under Section 7 of the Code. 28. We also note that the Corporate Debtor has indeed acknowledged and confirmed the loans credit facilities availed by it from the Respondent No. 1. 29. After careful consideration of the averments made before us by both the parties and after going through the record made available including the Impugned Order, we do not find any error in the Impugned Order. 30. The Appeal is therefore found to be devoid of any merit and is hereby dismissed. Company Appeal (AT) (Insolvency) No. 233 of 2023 31. Mr. Rosario D' Souza, the Appellant herein, is the Suspended Board of the Corporate Debtor and Mr. Mahesh Chand Gupta ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Respondent No. 2 is entitled to this additional amount of Rs. 1 Crore which is provided by the Respondent No. 3 under Resolution Plan over and above admitted claim of the Respondent No. 2. 39. We note that the Resolution Professional filed an in I.A. No. 1736 of 2022 in C.P. No. 1352 of 2020, under Section 31 of the Code for approval of the Resolution Plan which was favourably considered by the CoC and approved by the Adjudicating Authority. 40. It is the case of the Appellant that there is no provision in the Code for such additional provision of interest over and above the admitted claims. The Appellant submitted that even during process of the CIRP, Rs. 55 Lakhs was available in current account of the Corporate Debtor which could have been used for making the payment of CIRP cost and statutory dues and remaining money could have been used to pay to the Shareholders of the Corporate Debtor, whereas in the present case after the Resolution Plan was approved, the Respondent No. 2 is getting more than its admitted claim and Shareholder are not getting anything out of Resolution Plan which is not fair. 41. It is the case of the Appellant that the purpose of the Code is the Reso....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n accordance with his own commercial decision and nothing illegal can be attributed to such lawful decision. 49. The Respondent No. 2 concluded his arguments and stating that the Resolution Plan was approved by the CoC with 100% voting right in, its commercial wisdom and was correctly and legally approved by the Adjudicating Authority through well reason speaking order. 50. The Respondent No. 3 i.e., Mrs. Lalita S Powle in consortium with Suyog Agro & Poultry Products Pvt. Ltd. is the SRA of the Corporate Debtor, also countered all averments of the Appellant and opposed the Appeal. 51. The Respondent No. 3 specifically countered the averments of the Appellant regarding non consideration of the claims of the other Creditors i.e., other then the Financial Creditor and stated that the Form F of the Schedule of the CIRP Regulation, 2016 need to be filed by any other Creditors with Resolution Professional with proof and may also submit supplementary documents of clarification in support of such claims. The Respondent No. 3 submitted that the Appellant has not filed any such claim to the Resolution Professional in accordance with the Regulation 9A of Insolvency Bankruptcy Bord of Indi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he cost of the Shareholders of the Corporate Debtor i.e., Promoters. 60. We have noted the averments and found in catena of the judgments the Hon'ble Supreme Court of India had categorically stated limited scope of judicial review over the commercial domain of the CoC. 61. The financial debt always has the time value and such time values continues till the debts are paid. 62. The Financial Creditor has submitted its claim in accordance with the provisions of the Code and IBBI Regulations, 2016 at the relevant period of filing of Form C but the intent of the Financial Creditor is always to realise full outstanding dues along with interest on the original debt. 63. It is up to the Resolution Applicant who tries to revive the Corporate Debtor as per his own scheme and provide the amount in the Resolution Plan which should be sufficient to meet the CIRP costs, the payment to the Financial Creditors, Operational Creditors, Statutory dues, workmen dues employees dues and payment towards dues of the other creditors to the extent possible. Such Resolution Plan is submitted for consideration of the CoC which applies its commercial wisdom and send the same through the Resolution Professi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....omain of the financial creditor(s), to approve or reject the resolution plan, under Section 30(4) of the I&B Code. At best, the Adjudicating Authority (NCLT) may cause an enquiry into the "approved" resolution plan on limited grounds referred to in Section 30(2) read with Section 31(1) of the I&B Code. It cannot make any other inquiry nor is competent to issue any direction in relation to the exercise of commercial wisdom of the financial creditors be it for approving, rejecting or abstaining, As the case may be. Even the inquiry before the Appellate Authority (NCLAT) is limited to the grounds under Section 61(3) of the I&B Code. It does not postulate jurisdiction to undertake scrutiny of the justness of the opinion expressed by financial creditors at the time of voting" [ emphasis supplied ] 65. The relevant portion of the judgement passed by the Hon'ble Supreme Court of India in the matter of India Resurgence Arc Private Limited (Supra) is reproduced herein under :- "... the process of judicial review cannot be stretched if all the above-mentioned requirements have been duly complied with and that dissenting financial creditor, expressing dissent over the value of security....