TaxTMI 
TaxTMI 
2024 (10) TMI 463
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....s dismissed all the aforesaid Applications. Aggrieved by the said Order, Appellant has come up in this Appeal. 2. Brief facts necessary to be noticed for deciding the Appeals are: i. Corporate Insolvency Resolution Process (`CIRP') of the Corporate Debtor M/s. Hind Motors India Ltd., commenced by an Order dated 09.03.2017 passed under Section 10 of the Insolvency and Bankruptcy Code 2016, (for short `The Code or The IBC') on an Application filed by the Corporate Debtor itself. ii. On 12.09.2017, an Order of Liquidation was passed by the Adjudicating Authority. iii. The Respondent No. 2 Mr. Ashish Mohan Gupta, the Promoter and former Director challenged the Liquidation Order, which Appeal was dismissed by this Tribunal on 26.04.2018. iv. In the Liquidation Proceeding, Liquidator issued an e-Auction Notice, former Director also filed an Application seeking stay of the sale on the ground that the Scheme under Section 230 of the Companies Act, 2013 (for short `The Act') has been submitted by the former Director which needs to be considered, which Application was rejected on 23.08.2019 against which Order Comp. App. (AT) (Ins.) No. 875/2019 was fil....
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....he Liquidator, there is no error, hence the Application challenging the Auction Notice dated 02.12.2022 was dismissed. Aggrieved by the Order passed by the Adjudicating Authority dated 31.05.2024, these Appeals have been filed. 3. Learned Counsel for the Appellant challenging the Order submits that the Adjudicating Authority has committed an error in holding that Section 12A Application was not maintainable in the Liquidation Proceeding. Learned Counsel for the Appellant has relied on the 2 Member Bench Judgment of this Tribunal in the matter of `V Navneetha Krishnan' Vs. `Central Bank of India, Coimbatore & Anr.' reported in 2018 SCC Online NCLAT 904, to support his submission that 12A Application is maintainable even in Liquidation Proceeding. Learned Counsel for the Appellant further submits that Liquidator is proceeding to sell the Assets of the Corporate Debtor without constituting a Stakeholders Consultation Committee (`SCC'). It is submitted that as per the Insolvency and Bankruptcy Board Liquidation Regulations as amended by Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2022, it was incumbent on the Liquidator to constitut....
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....roval of not less than 66% of the voting share to liquidate the Corporate Debtor. It is not disputed that Liquidation commenced on 12.09.2017. Section 12A itself contemplates withdrawal of the Application with the approval of the 90% voting share of the CoC in such manner as may be prescribed. The CoC exist till continuation of the CIRP and after the Order passed under Section 33 for Liquidation, the CoC does not continues so as to take a decision for withdrawal of an Application under Sections 7, 9 & 10. The Statutory Scheme of IBC thus clearly contemplates that withdrawal of Application is permissible only during CIRP period with the approval of 90% vote shares of the CoC. The Scheme of Liquidation and the Liquidation Regulations do not contemplate any withdrawal under Section 12A. In this context, we may refer to Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016, which provides for Compromise or Arrangement. Regulation 2B provides as follows. "2B. Compromise or arrangement. (1) Where a compromise or arrangement is proposed under section 230 of the Companies Act, 2013 (18 of 2013), it shall be completed within ninety days of the order of liquidation under....
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.... was required to be passed and in absence of any good reason for extension of time, we are not inclined to grant any relief. 5. However, in view of Section 12A even during the liquidation period if any person, not barred under Section 29A, satisfy the demand of 'Committee of Creditors' then such person may move before the Adjudicating Authority by giving offer which may be considered by the 'Committee of Creditors', and if by 90% voting share of the 'committee of creditors', accept the offer and decide for withdrawal of the application under Section 7 of the I&B Code, the observation as made above or the order of liquidation passed by the Adjudicating Authority will not come in the way of Adjudicating Authority to pass appropriate order. Both the appeals are dismissed with aforesaid observations. No cost." 11. The observations made in Paragraph 5 by this Tribunal, where in the facts of the said case, where a Plan was already submitted on 178th day. The Court, however, dismissed both the Appeals but made an observation which is relied by the Appellant in Paragraph 5 that "in view of Section 12A, even during the Liquidation period, if any person, not barred under Section ....
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.... 14. Section 12A was inserted in IBC with effect from 06.06.2018, i.e., much subsequent to the above Judgment. The above Judgment in no manner help the Appellant in the facts of the present case. 15. In view of the clear Statutory Scheme as delineated by 12A, Section 33 and Regulation 2B of the Liquidation Regulation, we are of the view that during Liquidation period, an Application under Section 12A is not permissible. In the facts of the present case, it is clear that former Director of the Corporate Debtor, Ashish Mohan Gupta, himself has challenged the Liquidation Order and also sought to submit a Scheme which were all rejected up to this Tribunal. The Application which has been filed by the Appellant No. 1 under Section 12A was filed after more than three years from Liquidation commencement, which was at the instance of the former Director Aashish Mohan Gupta, which has been clearly noticed by the Adjudicating Authority in the Impugned Order. We may notice Paragraphs 3 (iv) and (v),Adjudicating Authority also in Paragraph 5 has noticed that Union Bank of India which has 80.43% vote shares as stated before the Adjudicating Authority that Union Bank of India is not inclined ....