TaxTMI 
TaxTMI 
2024 (3) TMI 1182
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....t was also disposed of. 2. In this Appeal, the Appellant has filed IA No.4170 of 2023 seeking amendment in the prayer clauses "to set aside and quash the Impugned Order dated 07.08.2023 passed by the Hon'ble National Company Law Tribunal, Mumbai Bench-IV in 3887/2022 & IA No.-64/2023...". The order dated 07.08.2023 was passed in IA No.64 of 2023. 3. By order dated 04.09.2023, this Appellate Tribunal granted leave to the Appellant to file, IA for amending Memo of Appeal to challenge order passed in IA No.3887 of 2022. Order dated 04.09.2023 passed by this Tribunal is as follows: "04.09.2023: Counsel for the Appellant has submitted that the Adjudicating Authority has decided two applications in which one application bearing IA No. 3887 of 2022 has been dismissed and another application bearing IA No. 64 of 2023 has been allowed. 2. It is submitted that due to oversight only the order passed in IA No. 64 of 2023 has been challenged through this appeal but subsequently an application has been filed for amending the memorandum of appeal to challenge the order passed in IA No. 3887 of 2023 as well. 3. It is submitted that the said application has though b....
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....e Corporate Debtor. (iv) Immediately after 4th CoC Meeting held on 01.12.2022, where Resolution Plan of the Appellant was not accepted and decision of liquidation was taken, an IA No.3887 of 2022 was filed by the Appellant. (v) In the Application filed by the Appellant, it was pleaded that the Appellant has proposed to pay 100% principal outstanding plus simple interest @ 12% p.a. towards the debt of Financial Creditor. The Appellant only prayed for exclusion of penal interest and other charges levied over the NPA account. (vi) After the resolution dated 01.12.2022 of the CoC, RP also filed an IA before the Adjudicating Authority for liquidation, being IA No.64 of 2023. It is to be noted that IA No.3887 of 2022 was filed by the Appellant, much before filing of the IA No.64 of 2023. (vii) The Adjudicating Authority vide order dated 27.02.2023 directed the Appellant to pay 25% of the amount due to the Financial Creditor by 31.03.2023 and balance 75% by 31.04.2023. Vide order dated 08.05.2023, the Adjudicating Authority permitted the Appellant to file revised Resolution Plan along with earnest money of Rs.1 crore. The Appellant, however, could not d....
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....s as this Hon'ble Appellate Tribunal may deem fit and proper in the interest of justice." 9. On 27.02.2024, when the Appeal was listed, learned Counsel for the Bank submitted that correct amount to be paid by the Appellant is Rs.6.09 crores, which claim has already been submitted before the Liquidator. The learned Counsel for the Appellant submitted that the Appellant has obtained a Bank Draft of Rs.2.11 Crore and ready to handover the Bank Draft and other amount within one day. The order dated 27.02.2024 is as follows: " 27.02.2024 : The Learned Counsel for the Appellant submit that the Bank has informed that the amount of Rs. 4.15 Crore is due. The Learned Counsel for the Bank submitted that the aforesaid amount is not correct, the correct amount is Rs. 6.09 Crore which Bank is entitled to which amount is also submitted to the Liquidator. The Learned Counsel for the Appellant submit that the Appellant has now obtained the Bank Draft of Rs. 2.11 crore after selling his house and he is ready to handover the Bank Draft to the Liquidator and another Rs. 2.04 Crore will be deposited with the Corporate Debtor account by tomorrow. Subject to de....
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....he Resolution Plan of the Appellant having not been approved by the CoC in its meeting dated 01.12.2022, the Appellant has no right to submit any modified Resolution Plan. It is submitted that even though, the Adjudicating Authority granted an opportunity to the Appellant to deposit the amount of Rs.1 crore as EMD along with modified Resolution Plan, the said amount could not be deposited by the Appellant, inspite of opportunity being given by the Adjudicating Authority. It is submitted that the offer of the Appellant to deposit Rs.75 lakhs on the date when the matter was decided, i.e., on 07.08.2023 has rightly been rejected by the Adjudicating Authority. It is submitted that even in this Appeal, several opportunities have been granted to the Appellant to deposit the entire amount, which amount could not be deposited by the Appellant and he failed to deposit the amount. Hence, the interim order was also discharged by this Tribunal on 08.01.2024. It is submitted that amount due against the Corporate Debtor is Rs.6.09 cores, which is an amount claimed by the Bank to the Liquidator. The liquidation order having been passed on 07.08.2023 and the Bank has submitted a claim to the Liqui....
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....n values of the assets of the Corporate Debtor. In view of this, it would not be proper for Vidya Sahakari Bank to deviate from its policy and allow hair cut when the value of the property is more than twice the amount due. The CoC also raised concerned about the financing arrangement from KB Finance in absence of any clarity on its status as NBFC/Financial Institution and corporate status. And this creates a doubt with respect to the ability of RA to honor its payment obligations mentioned in the Resolution Plan. Mr. Pankaj Tiwari mentioned that during the CIRP only the promoters have taken efforts to provide necessary financial assistance to the CD to maintain its going concern status and meet the expenses of CD such as salaries, wages, essential supplies, GST payments etc. and no positive and effective steps were taken by the CoC to keep the CD live, as it seems CoC's object was only to recover the money. After all the deliberations, the CoC maintained its stand and informed that the resolution plan as proposed by RA in the present form is not acceptable." 14. The above minutes clearly mentions that Bank having already field its claim of Rs....
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....m of Rs.4,92,81,826 (Rupees Four Crores Ninety - Two Lacs Eight - One Thousand Eight Hundres and Twenty - Six Only), as already proposed in I.A. 3887/2022, subject to us being permitted to submit a Revised Resolution Plan before the Committee of Creditors and on the approval of the Revised Resolution Plan by the Committee of Creditors and the Hon'ble Adjudicating Authority. (ii) That I further, do hereby undertake to make full payment to all the creditors including the financial creditors which shall be proposed in the Revised Resolution Plan. (iii) That I do hereby undertake to make the full and final payment in accordance with the timelines as proposed to be set out in the Revised Resolution Plan as approved by the Committee of Creditors and the Hon'ble Adjudicating Authority. 4. That all the statements made herein are true and correct to my knowledge. Solemnly affirmed at Pune ) Dated this 25th day of February, 2023 ) Sd/- __________________________ Pankaj Dayaprasad Tiwari APPLICANT No.1" 17. As noted above, the Adjudicating Authority in the order passed on the Application permitted the Appellan....
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....e the Adjudicating Authority, was a bonafide effort made by the Appellant, who is a Promoter of MSME. 20. The IBC itself recognises the right of MSME to revive a Corporate Debtor and even if certain ineligibility under Section 29A are not attracted. The object of Corporate Insolvency Resolution Process is always to revive the Corporate Debtor and liquidation being the last resort, which is nothing but a corporate death. The Hon'ble Supreme Court in Swiss Ribbons Pvt. Ltd. and Anr. vs. Union of India and Ors. - (2019) 4 SCC 17, laid down following in paragraphs 27 and 28: "27. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganisation and insolvency resolution of corporate debtors. Unless such reorganisation is effected in a time-bound manner, the value of the assets of such persons will deplete. Therefore, maximisation of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced....
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....ugh as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends." 21. The amount of Rs.75 lakhs was also permitted to be paid by the Corporate Debtor to the Bank by order of this Tribunal dated 11.09.2023. The Appellant undertaking to pay rest of the amount of Rs.4,92,81,826/- has also been noticed in the order dated 18.09.2023. The Appellant has filed an IA No.1129 of 2024, undertaking to pay the entire balance amount within 30 days. 22. The learned Counsel for the Respondent has raised submissions that Appellant has not made the payments inspite of the opportunity granted by this Tribunal, hence, no further opportunity be granted. The learned Counsel for the Bank has also contended that amount due on the Corporate Debtor is Rs.6.09 crores, which is the amount, which has been claimed by the Financial Creditor in accordance with the liquidation order passed by the Adjudicating Authority dated 07.08.2023. It is submitted that Financial Creditor has filed its claim before the Liquidator on 02.09.2023 Rs.6,03,67,192/-. 23. The present is a case where the Appellants - Promoters of the Corpor....