TaxTMI 
TaxTMI 
2025 (7) TMI 1781
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....Sibal, Senior Advocate Mr Krishnendu Datta, Senior Advocate For Mr. Prateek Kumar, Ms. Raveena Rai, Ms Moha Paranjpe, Mr Siddhant Grover, Advocates for R4 Mr. Abhinav Vasisht, Senior Advocate For Mr. Savar Mahajan, Ms. Arveena Sharma, Ms. Ichchha Kalash, Ms. Samridhi Shrimali, Ms. Lakshana Viravalli, Ms. S.Madhusmitha & Ms. Akshita Sachdeva Jaitly, Advocates for R5 JUDGMENT Per: Justice Rakesh Kumar Jain: This order shall dispose of two appeals bearing CA (AT) (Ins) No. 89 of 2025 titled as "Riju Ravindran Vs. Pankaj Srivastava & Ors." (herein after referred to as 'the first appeal') and CA (AT) (Ins) No. 130 of 2025 titled as "Board of Control For Cricket In India Vs. Pankaj Srivastava & Ors." (herein after referred to as 'the second appeal') as both the appeals have been filed against the order dated 10.02.2025 passed by the National Company Law Tribunal, Bengaluru Bench, Bengaluru (in short 'the Tribunal') by which an application bearing I.A No. 837 of 2024 filed by Pankaj Srivastava (RP)/Respondent No. 1 in CP (IB) No. 149/2023 titled as 'Board of Control for Cricket in India Vs. Think & Learn Pvt. Ltd.' on 14.11.2024 under Section 12....
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....by The Board and Control for Cricket in India under Section 9of the I & B Code 2016 r/w Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules 2016, against the same Corporate Debtor herein i.e., Think & Learn Private Limited and since the Corporate Insolvency Resolution Process (CIRP) has been initiated in respect of the Corporate Debtor therein by appointing the IRP, the instant C.P is disposed of by granting liberty to the Petitioner herein to put-forth their claim before the IRP appointed in C.P (IB) No. 149/BB/2023 in accordance with the provisions of the IBC 2016 and the Regulation made thereunder. 4. However, at the request of the Learned Senior Counsel for the Petitioner, we hereby grant liberty to the Petitioner to seek restoration/revival of the said petition bearing C.P (IB) No.55/BB/2024 depending on the subsequent developments in the matter at the Appellate level; if any. 5. Accordingly, C.P (IB) No.55/BB/2024 is disposed of and all the pending IAs in the present case stands closed." 6. Mr. Byju Raveendran, promoter and suspended director of the CD challenged the order dated 16.07.2024, passed in CP (IB) No. 149 of 2023....
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....dicating Authority (AA) and also on the same date i.e. 16.08.2024 asked the IRP to file it when the appeal pending before the Hon'ble Supreme Court is dismissed. Both the letter dated 16.08.2024 and Form FA dated 16.08.2024 are reproduced as under :- To Mr. Pankaj Srivastava August 16, 2024 58, 3rd Cross, Vinayak Nagar, Hebbal, Bengaluru - 560024. Email: [email protected]; [email protected] Subject: Payment of operational debt that formed the subject-matter of CP (IB) 149 of 2023 before the National Company Law Tribunal, Bengaluru Bench Dear Sir, 1. As you are aware, the Hon'ble National Company Law Tribunal, Bengaluru Bench, by its order dated July 16, 2024 ("NCLT Order"), admitted the petition of the Board of Control for Cricket in India ("BCCI") which was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC") and initiated a corporate insolvency resolution process ("CIRP") against Think & Learn Private Limite....
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.... of complete INR. 158 crores to BCCI is made, BCCI shall make statement to withdraw the Company Petition and take necessary steps towards the same." As per the Settlement Offer, once the complete Settlement Amount is paid to BCCI, BCCI would make a statement to withdraw the Company Petition and take necessary steps towards the same. It is pertinent to note that the Settlement Offer made to BCCI was not subject to the Adjudicating Authority accepting the withdrawal of the CIRP proceedings against the Corporate Debtor. Mr. Riju Ravindran also submitted an undertaking and affidavit-cum-undertaking ("Undertakings") before the Hon'ble NCLAT undertaking to pay the Settlement Amount to BCCI in settlement of the Operational Debt. 4. Thereafter, the Hon'ble NCLAT, by its order dated August 2, 2024 ("NCLAT Order") in the Company Appeal, set aside the NCLT Order approving the settlement between the parties and with the caveat that if there was a breach of the Undertakings, the NCLT Order would automatically revive. 5. While proceedings before NCLAT were pending, GLAS filed a Motion for Temporary Restraining Order before the United States Bankruptcy Court, De....
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....the time of giving consent Rs. 75,000 payable upon the petition being admitted and Rs. 50,000 payable at the time of constituting the Committee of Creditors). BCCI has already paid an amount of Rs. 1,50,000 to you. A cheque bearing number 000015 dated 16 August 2024 for Rs. 1,25,000 drawn on Kotak Mahindra Bank Ltd. in favour of Pankaj Srivastava is enclosed hereto as per your fee quote. Accordingly, as per our understanding no amount is pending for which a bank guarantee would be required under Regulation 30A(2)(a) of the CIRP Regulations. BCCI will further comply with the provisions of Regulation 30A(7) of the CIRP Regulations, if the occasion arises. 12. BCCI is mindful and respectful of the Hon'ble Supreme Court's order dated August 14, 2024 granting a stay on the NCLAT Order. BCCI does not wish to and / or intend to precipitate any action while the matter is sub-judice before the Hon'ble Supreme Court. For the sake of good order, please note that BCCI is enclosing the withdrawal application in Form FA only to ensure compliance with the terms of the Settlement Offer. You may be well advised not to (and certainly we do not advise you to) precipitate or pursu....
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....g CP(IB) 149 of 2023 on September 8, 2023 before the Adjudicating Authority under Section 9 of the Insolvency and Bankruptcy Code, 2016. The said application was admitted by the Adjudicating Authority on July 16, 2024, in CP(IB) 149 of 2023. 2. I, Board of Control for Cricket in India, hereby withdraw the application bearing CP(IB) 149 of 2023 filed by Board of Control for Cricket in India before the Adjudicating Authority under Section 9 of the Insolvency and Bankruptcy Code, 2016. 3. I attach the required bank guarantee as per sub-regulation (2) of regulation 30A - Not applicable. On behalf of the Board of Control for Cricket in India: Name: Biswa Patnaik Authorised Signatory Date: August 16, 2024 Place: Mumbai 11. After the receipt of the letter and form FA, Respondent No. 1/IRP sent an email to the BCCI that form FA cannot be acted upon as the issue regarding settlement between the BCCI and the promoters is subject to final outcome of the civil appeal. The email dated 19.08.2024 is reproduced as under :- From: Pankaj Srivastava <[email protected]> Sent: Monday, August 19, 2024 7:24:09 PM To: <biswa.patnaik@bc....
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....ns) No 262 of 2024. 4 The Board of Control for Cricket in India (BCCI) shall maintain the amount of Rs 158 crores which has been realized in pursuance of the settlement, in a separate escrow account, to abide by further directions of this Court." In view of the stay of the operation of impugned judgment and order dated 02.08.2024 passed by the Ld. NCLAT, the order of the NCLT revives and accordingly, the undersigned is acting as an Interim Resolution Professional. The undersigned wishes to apprise you that since the Hon'ble Supreme Court has categorically directed you the Operational Creditor to keep the settlement amount in a separate escrow account and to abide by the directions under order dated 14.08.2024, your letter dated 16.08.2024 (received on 19.08.2024) as well as the enclosed FORM-FA dated 16.08.2024 cannot be acted upon by the undersigned as any settlement/compromise between the Operational Creditor and the Suspended Board is subject to final outcome of the Civil Appeal (Diary) No. 35406 of 2024. The undersigned is duty bound to act as per the terms of the order passed by the Hon'ble Supreme Court. The undersigned has noted th....
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....by various authorities, including the Enforcement Directorate, which are pending. 87. During the course of the proceedings before this Court, the CoC has been constituted. The parties are at liberty to invoke their remedies, to seek a withdrawal or settlement of claims, in compliance with the legal framework governing the withdrawal of CIRP. Nothing in this judgment should be construed as a finding on the conduct of any of the parties or other stakeholders involved in the insolvency proceedings. 88. The amount of Rs 158 crore, along with accrued interest, if any, which has been maintained in a separate escrow account pursuant to the Order of this Court dated 14 August 2024, is to be deposited with the CoC. The CoC is directed to maintain this amount in an escrow account until further developments and to abide by the further directions of the NCLT. 89. The civil appeal and special leave petition shall stand disposed of accordingly." 15. Pursuant to the liberty granted by the Hon'ble Supreme Court in para 87 of the aforesaid judgment, the Appellant in the first appeal wrote to the Appellant in the second appeal to take steps for withdrawal of the app....
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....ion of CoC and restore the CoC as on 21.08.2024 and (iii) Set aside resolutions of the CoC held on 03.09.2024 and all subsequent meetings which may have taken place." 2. Both the applications have been disposed of by the impugned order with the following directions :- "a. The reconstitution of the Committee of Creditors carried out by the Interim Resolution Professional on 31st August 2024 is hereby set aside. The Committee of Creditors constituted on 21st August 2024 is upheld and shall remain in effect. b. The Interim Resolution Professional is directed to convene a meeting of the Committee of Creditors as constituted on 21st August 2024 and submit their recommendation on appointment of the Resolution Professional. c. The resolution passed by the reconstituted Committee of Creditors on 3rd September 2024, which appointed the Interim Resolution Professional as the Resolution Professional, is hereby set aside. In addition, any subsequent resolutions, if passed by the reconstituted CoC, are also nullified. d. The Applicant No. 1, Aditya Birla Finance Limited is hereby restored to the status of a Financial Creditor, with all atten....
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....ncement on 17.07.2024 pursuant to which both the Applicants in I.A No. 660 of 2024 and I.A No. 820 of 2024, namely, Aditya Birla Finance Pvt. Ltd. and GLAS Trust Company LLC respectively, filed their claims in Form C. 8. The admission order was challenged by one of the suspended directors (Mr. Byju Raveendran) of the CD by way of CA (AT) (Ins) No. 262 of 2024 before this Tribunal. 9. During the pendency of this appeal, the Appellant and BCCI entered into a settlement on the basis of which the appeal was allowed and the CIRP was set aside on 02.08.2024 by this Tribunal. However, the order dated 02.08.2024, passed by this Court, was challenged by way of an appeal before the Hon'ble Supreme Court by GLAS Trust Company LLC. It was initially registered as Civil Appeal Diary No. 35406 of 2024 in which stay was granted by the Hon'ble Supreme Court on 14.08.2024. The order of stay read as under :- "1 IA No 175985 of 2024 for permission to file the appeal and IA No 175989 of 2024 for permission to file the appeal without certified/plain copy of the impugned order are allowed 2 Issue notice, returnable on 23 August 2024. 3 Pending further ....
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.... Trust Company LLC 11,432,98,87,753/- 11,432,98,87,753/- 99.41% Aditya Birla Finance Limited 47,12,00,000/- 47,12,00,000/- 0.41% Incred Financial Services Limited 20,34,52,440/- 20,34,52,440/- 0.18% ICICI Bank Limited Nil Nil 0.00% Total 11,500,45,40,193 11,500,45,40,193 100% 12. However, the IRP reconstituted the CoC on 31.08.2024 with only one Financial Creditor. The reconstitution of CoC is as under :- Name of The Creditor Amount Claimed Amount Verified Voting Share (%) Incred Financial Services Limited 20,34,52,440/- 20,34,52,440/- 100% Total 100% 13. The decision of the IRP dated 31.08.2024 was challenged by Aditya Birla Finance Limited by way of I.A No. 660 of 2024 on 09.09.2024 and by GLAS Trust Company LLC by way of I.A No. 820 of 2024 on 24.10.2024. 14. In the meanwhile, on 23.10.2024, the Hon'ble Supreme court allowed CA No. 9986 of 2024 and set aside the order passed by this Court on 02.08.2024 with the following conclusions :- "F. Conclusion 86.For the above reasons, we allow the present ap....
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....he three applications on the same day then it should have decided all the three applications together and should not have kept the application bearing IA No. 837 of 2024 for orders after the applications I.A No. 660 of 2024 and 820 of 2024 were decided. 17. Mr. Kapil Sibal, Sr. Adv. duly assisted by Mr. Datta, Sr. Adv. appearing on behalf of the Respondent has submitted that the application was not filed before the constitution of CoC rather it was filed somewhere in November, 2024 after the constitution of CoC. He has further submitted that the first CoC meeting about which there is a great hue and cry raised by the appellant is only with regard to approval for transfer of settlement of funds to CoC, approval for appointment of IRP as the RP and any other matter with the permission of the chair. He has further submitted that this meeting had been called in regard to the agenda qua the orders passed by the Hon'ble Supreme Court on 23.10.2024 in which it has been held that "the amount of Rs 158 crore, along with accrued interest, if any, which has been maintained in a separate escrow account pursuant to the Order of this Court dated 14 August 2024, is to be deposited wi....
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....at the settlement was arrived at between the parties on 31.07.2024 and was given effect to on 16.08.2024 because it has been mentioned in Form FA that the BCCI withdraws the application bearing CP (IB) No. 149 of 2023. He has further submitted that Regulation 30A(3) requires the IRP to file Form FA within three days from its receipt. Form FA was submitted on 16.08.2024 whereas the CoC was constituted on 21.08.2024. The settlement was arrived at between the parties before the CoC was constituted and Form FA was also submitted to the IRP to be filed before the AA on 16.08.2024, therefore, the right of the Appellant cannot be defeated if Form FA is filed after the constitution of the CoC. He has further submitted that the stage of the case of the Appellant has been noticed by the Hon'ble Supreme Court in para 78 of its order dated 23.10.2024, therefore, it shall have to be considered to be a case of filing the application for settlement before the constitution of CoC to which Regulation 30A(1)(a) is applicable and not Regulation 30A(1)(b) as held by the Tribunal. 20. He has further submitted that the Tribunal has committed an error in holding that the application could have bee....
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.... claim but at the same time it has noted that the CoC has already been constituted 27. Counsel for Respondent No. 4 has also argued that the letter dated 16.08.2024 by the BCCI, who had submitted form FA on the same date to the IRP, clearly reflects the decision of the Appellant of filing the application for withdrawal because in the said letter it was categorically mentioned that the application for withdrawal may be filed only when civil appeal is dismissed by the Hon'ble Supreme court whereas the appeal was allowed on 23.10.2024 and thereafter on being asked by the RP, the Appellant has filed the application under Section 12A alongwith form FA on 14.11.2024. 28. He has further submitted that it does not lie in the mouth of the Appellant to blame the IRP/RP for not filing Form FA within three days as stipulated in the Regulations because the Appellant itself had wished and directed the RP to file the application for withdrawal only after dismissal of the appeal by the Hon'ble Supreme Court which was eventually allowed on 23.10.2024. 29. He has also submitted that in reply to the letter dated 16.08.2024, the RP sent an email dated 19.08.2024 that any steps taken a....
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....sidered to have been filed before the constitution of the CoC on 21.08.2024 or it has to be considered as filed on 14.11.2024 that is the date of filing of the application by the IRP for settlement which is after the constitution of the CoC? 38. On 02.08.2024, the application filed under Section 9 by the BCCI was set aside by this Court on the basis of the settlement invoking Rule 11 of the NCLAT Rules, 2016. However, in the appeal filed by R4 before the Hon'ble Supreme Court against the order dated 02.08.2024, the operation of the order dated 02.08.2024 was stayed on 14.08.2024. On 16.08.2024 the BCCI handed over Form FA to the IRP and also on the same day wrote a letter to him that the application for settlement may be placed before the Tribunal only after the appeal pending before the Supreme court is dismissed. On 19.08.2024 the IRP also wrote back to the BCCI that he will file form FA only after the decision of the Hon'ble Supreme Court on the pending appeal. On 19.08.2024 the IRP verified the claim of R4 as a financial creditor and on 21.08.2024 constituted the CoC with Respondent No. 4 as one of the members of the CoC with voting share of 99.41%. 39. The Hon....
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.... CoC was not constituted whereas in para 87 it has been observed that during the pendency of the proceedings, the CoC was constituted. Para 87 is also required to be considered and is reproduced as under :- 87.During the course of the proceedings before this Court, the CoC has been constituted. The parties are at liberty to invoke their remedies, to seek a withdrawal or settlement of claims, in compliance with the legal framework governing the withdrawal of CIRP. Nothing in this judgment should be construed as a finding on the conduct of any of the parties or other stakeholders involved in the insolvency proceedings. 43. Form FA, admittedly having been filed on 14.11.2024, is post CoC. In this regard, it shall be worthwhile to refer to Section 12A and Regulation 30A of the Regulations which are also reproduced as under :- "Section 12A. Withdrawal of application admitted under section 7, 9 or 10 [12A. Withdrawal of application admitted under section 7, 9 or 10 .- The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an application made by the applicant with the approval of ninety per c....
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....egulation (2) till the date of approval by the Adjudicating Authority, as determined by the interim resolution professional or resolution professional, as the case may be, within three days of such approval, in the bank account of the corporate debtor, failing which the bank guarantee received under sub-regulation (2) shall be invoked, without prejudice to any other action permissible against the applicant under the Code.]" 44. Section 12A deals with the withdrawal of the application, filed under Section 7, 9 or 10 of the Code with the approval of 90% voting share of the CoC. 45. Regulation 30A which came to be introduced in the regulations on 25.07.2019 has provided for both the scenarios i.e. filing of the application for withdrawal before the constitution of CoC and filing of the same after the constitution of the CoC. If the application under Section 12A is filed under Regulation 30A(1)(a) before the constitution of CoC then Section 12A which mandates the approval of such application for withdrawal by 90% voting share of the CoC shall not apply but if the application is filed after the constitution of the CoC then the provisions of Section 12A shall apply with full force.....