TaxTMI 
TaxTMI 
2025 (1) TMI 435
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....ows: (i) Corporate Insolvency Resolution Process ("CIRP") of Dreamz Infra India Ltd. in CP(IB)84/2019 commenced vide order dated 20.08.2019 passed by Adjudicating Authority Bengaluru Bench in which the Applicant was appointed as Interim Resolution Professional. (ii) On 09.11.2019, Committee of Creditors ("CoC") passed a resolution replacing the Applicant and appointing one Mr. Konduru Prasanth Raju ("K.P. Raju"), as RP. The Adjudicating Authority vide order dated 17.12.2019 did not approve the resolution of CoC and offered the Applicant to work as RP at the fixed rate of Rs.6.75 lakhs per month. (iii) Order dated 17.12.2019 was challenged by CoC before this Tribunal in Company Appeal (AT) (Ins.) No.34 of 2020, which Company Appeal was decided on 13.01.2021, setting aside the order dated 17.12.2019 passed by Adjudicating Authority appointing Applicant as RP. This Appellate Tribunal while setting aside order dated 17.12.2019 directed that fees paid/ payable in terms of impugned orders, shall be protected. In pursuance of the order of this Appellate Tribunal dated 13.01.2021, the Applicant handed over charge of the RP to K.P. Raju. (iv) The Corporat....
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....make his claim of CIRP costs in CP(IB)No.84 of 2019. (vii) On 24.08.2023, Section 7 Application CP(IB)No.113/BB/2022 was admitted by the Adjudicating Authority Bengaluru Bench. The Applicant filed this Contempt Application for taking action under the Contempt of Courts Act, 1971 against the Respondents for violation of order of this Tribunal dated 13.01.2021 in Company Appeal (AT) (Ins.) No.34 of 2020 in passing order dated 24.08.2023. 2. Shri Ashok Kriplani, the Applicant has appeared in person in support of the Contempt Application. When the Contempt Application came for consideration on 25.11.2024, this Tribunal granted time to the Applicant to file an affidavit explaining the question of limitation for filing a Contempt Application for violation of order dated 13.01.2021. In pursuance of the order of this Tribunal dated 25.11.2024, the Applicant filed affidavit dated 09.12.2024. 3. We have heard the Applicant appearing in person. 4. The Applicant explaining the limitation under Section 20 of the Limitation Act, 1971 submits that order dated 24.08.2023 has been passed by the Adjudicating Authority and within one year from the said order, the present Contempt Ap....
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....P has directed the payment of fees and costs to the Applicant and the CP(IB)84/BB/2019, which was filed against the CD was initiated with regard to combined Projects and the Applicant was entitled for his fees, which was protected by order dated 13.01.2021 for all the Projects of the CD. Since, the assets of the Sumadhur Project, to which CP(IB) No.84/BB/2019 has been confined by order dated 04.9.2020, are only Rs.55 lakhs, whereas CIRP cost to which the Applicant is entitled is Rs.2.15 crores. Hence, the Applicant has rightly filed Application with respect to other Projects, i.e. Sneh Project and Samhita Project for deciding upon the CIRP cost of the Applicant, which Application was wrongly rejected by the Adjudicating Authority. It is submitted that the Adjudicating Authority while passing the order dated 24.08.2023 for initiating CIRP with regard to Project Samhita of the CD, has violated the order dated 13.01.2021. Hence, both the Members of the Adjudicating Authority, who are Respondent Nos.1 and 2 need to be proceeded under the Contempt of Courts Act, 1971. The Applicant submits that the present RP, who is appearing in CP(IB) No. 84 of 2019 is misconducting himself and not ta....
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.... Orders which we are passing. The steps taken by them pursuant to Impugned Orders shall be treated as acts done in regular course. The steps taken by them in CIRP and fees paid/payable in terms of Impugned Orders, shall be protected." 9. The Applicant relies on directions issued in paragraph 12(D), which directed that "The steps taken by them in CIRP and fees paid/ payable in terms of Impugned Orders, shall be protected". The grievance which has been raised in the Contempt Application and by various Applications filed by the Applicant in the CIRP of the CD with respect to other two Projects namely - Sneh Project and Samhita Project, is only with respect to CIRP costs to which the Applicant was entitled and the present Contempt Application has also been filed for the purpose of CIRP costs, which according to the Applicant he was entitled as per order dated 13.01.2021. 10. The Applicant has brought on the record order dated 04.09.2020 passed by Adjudicating Authority in CP(IB) 84/BB/2019, which directed the CIRP be deemed to be in respect of only Sumadhur Project. Various Applications filed by the Applicant, Members of the CoC and various Homebuyers, came to be decided by commo....
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.... proceeding be initiated against the CD. In CP(IB)No.83/BB/2021 an order was passed on 15.02.2023 by Adjudicating Authority, by which Section 7 Application was admitted against the CD with respect to Sneh Project. Order dated 15.02.2023 is filed as Annexure A14, where Adjudicating Authority after noticing the submission of the parties, admitted the petition with respect to Project Dreamz Sneh Project. It is useful to extract paragraphs 14 to 17 of the order, which are as follows: "14. It is pertinent to refer here the judgement dated 04.02.2020 passed by the Hon'ble NCLAT in the matter of Flat Buyers Association Winter Hills-77, Gurgaon vs. Umang Realtech Pvt. Ltd. through IRP & Ors. in Company Appeal (AT) (Insolvency) No.926 of 2019 wherein it is inter alia held that a Corporate Insolvency Resolution Process (CIRP) against a real estate Company would have to be limited to only the concerned project and will not affect other projects undertaken by it. 15. Further, the Hon'ble NCLAT in a recent judgment dated 10.06.2022 in the matter of Ram Kishor Arora Suspended Director of M/s. Supertech Ltd. vs. Union Bank of India & Anr. in Company Appeal (AT) (Insolven....
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....cy Resolution Process or until this Bench approves the Resolution Plan under sub-section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33 as the case may be. 17. The Petitioners have proposed the name of Mrs. Jaya Bharuka, a qualified insolvency professional having Registration No. IBBI/IPA- 002/IP-N00781/2018-2019/12432 as the Interim Resolution Professional (IRP) in respect of the Corporate Debtor. Written Consent given by the IRP in Form 2 dated 08.09.2021 has been filed along with the C.P at Page Nos.1516-1520, wherein it was declared she is eligible to be appointed as IRP in the case of the Corporate Debtor and that no disciplinary proceedings are pending against her with the Board or ICSI Institute of Insolvency Professionals. However, since the Certificate of Registration is not filed, the IRP shall file the same within one week from the receipt of this order. 12. Thus, CP(IB) No.83/BB/2021 was admitted with respect to Sneh Project, in which CIRP, the Applicant filed an IA No.168 of 2022 praying for impleadment and seeking a direction to decide upon unpaid CIRP costs of the Applicant. Application - IA No.168 of 2022 filed ....
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....cannot seek any unpaid Fees/Costs from the 'Members of the Committee of Creditors' of another project of the 'Corporate Debtor'. This Tribunal, is of the considered view that the 'Appellant' has no 'Locus standi' to make his claim in C.P.(IB) No.83/BB/2021 and therefore this 'Tribunal' does not find any substantial ground(s) to interfere with the well-considered order of the 'Adjudicating Authority' in I.A. No.168 of 2022 in C.P. (IB) No.83/BB/2021. Needless to add, the Appellant is at liberty to pursue his remedy, if so advised, in accordance with law. No costs. Pending IAs are closed." 14. It is useful to notice that challenging the order dated 04.07.2023, the Applicant filed Civil Appeal (Diary No.33778/2023), which Appeal was dismissed by the Hon'ble Supreme Court vide order dated 12.12.2023. The order passed by the Hon'ble Supreme Court on 12.12.2023 is as follows: "IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. of 2023 (Arising out of Diary No.33778 of 2023 ASHOK KRIPLANI ...APPELLANT(S) VERSUS RAMANATHAN BHUVANESHWARI & ANR. ....RESPONDENT(S) ORDER Delay condoned. We do no....
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....ech Ltd. vs. Union Bank of India & Anr. in Company Appeal (AT) (Insolvency) No.406 of 2022, inter alia opined that in CIRP Process, Project-wise Resolution has to be started as a test to find out the success of such Resolution and allowed the IRP therein to constitute the CoC with regard to the Project Eco Village II only. "Moreover, three -Member Bench of the NCLAT, Principal Bench,New Delhi in the matter of 'Majestic Towers Flat Owners Association & Anr.' V.Housing Development and Infrastructure Ltd & Ors.', has held that Project Wise Insolvency can be granted to bring about better Resolution and prevent Liquidation as the sufferers would be the Homebuyers....." 14. We have carefully considered the arguments of the respective Counsel. In view of the facts and circumstances discussed above, the present Petition being complete and having established the default in payment of the financial debt and for the default amount being above Rs.1,00,00,000/- (Rupees One Crore Only), the Petition is admitted in respect of "Dreamz Samhita" Project of Respondent-Dreamz Infra India Limited under Section 7 of the I&B Code, 2016.Accordingly, moratorium is declared in terms of Section 14 o....
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....mitted by Adjudicating Authority in admitting Section 7 Application. The Contempt of Courts Act, 1971 defines civil contempt in Section 2, sub-clause (b), which is as follows: "2(b) "civil contempt" means wilful disobedience to any judgment, decree, direction, order, writ or other process of a court or wilful breach of an undertaking given to a court;" 20. Section 12 provides for punishment for contempt of court. The allegation in the Contempt Application are that civil contempt has been committed by the Respondents while admitting Section 7 Application vide order dated 24.08.2023, which is in violation of order dated 13.01.2021. The civil contempt as defined in Section 2(b), came for consideration before the Hon'ble Supreme Court in large number of cases. We may refer to judgment of the Hon'ble Supreme Court in (2014) 14 SCC 446 - T.C. Gupta vs. Bimal Kumar Dutta and Ors. where the Hon'ble Supreme Court in paragraph 10 laid down following: "10. ....A contempt action being in the nature of quasi-criminal proceeding the degree of satisfaction that must be reached by the court to hold a person guilty of commission of contempt would be akin to what is required to ....
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....3 was passed on an Application filed by Financial Creditors in a class. Right of Financial Creditors to initiate Section 7 Application against Corporate Debtor is preserved by the IBC and the Application filed in exercise of statutory right granted to the Homebuyers in a class and admission of Section 7 Application was made on the findings of debt and default. We fail to see any contempt or violation of order dated 13.01.2021 passed by this Tribunal in Company Appeal (AT) (Ins.) No.34 of 2020 by the Adjudicating Authority while passing order dated 24.08.2023. The contention of the Applicant is that Adjudicating Authority while passing the order dated 24.08.2023 has not taken into consideration the CIRP costs to which Applicant was entitled, while conducting the CIRP of the CD, which commenced on 20.08.2019. 24. We have already noticed above that with regard to CIRP of the CD with respect to another Project, i.e. Sneh Project, Section 7 Application was admitted on 15.02.2023, on an Application filed by M/s. Dreamz Sneh Projects Allottees Welfare Association, in which CP(IB)No.83/BB/2021, the Applicant has filed IA No.168 of 2022 praying for impleadment in the said Project and to ....
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.... of the Applicant in filing contempt against Adjudicating Authority is unjustified act, which action has no legs to stand. For his unpaid CIRP costs with reference to his appointment as RP in CP(IB)No.84 of 2019, the Applicant was free to take all steps for realising its unpaid CIRP costs, but he has no authority to initiate contempt action against the Adjudicating Authority while admitting CIRP with respect to another Project of the CD. 29. The Applicant has also placed reliance on two judgments of the Hon'ble Supreme Court being Civil Appeal Nos.5023-2024 of 2024 in State Bank of India & Ors. vs. The Consortium of Mr. Murari Lal Jalan and Mr. Florian Fritsch & Anr. decided on 07.11.2024. The above was a case where Hon'ble Supreme Court while deciding an Appeal arising out of order of NCLT Mumbai Bench and NCLAT, has made observations in paragraph 182 and 183, which have been relied by the Appellant. The present is not a case where NCLT has contravened or violated any of the order of the Hon'ble Supreme Court, rather the order of NCLT is in accord with the order of Hon'ble Supreme Court dated 12.12.2023 noted as above. There can be no two opinions that any violation of the o....