AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 485
X X X X Extracts X X X X
X X X X Extracts X X X X
....llant submitted that he is the director of Challengerz Web Solutions Pvt. Ltd. ("Challengerz") and Hacienda Infosoftech Pvt. Ltd. ("Hacienda"), companies in which the Corporate Debtor holds shares. The Appellant submitted that the Corporate Debtor entered into two Agreements to Sell dated 08.10.2018 with the Respondent for the transfer of 100% equity shareholding of Challengerz and Hacienda. It is the case of the Appellant that these agreements were entered into following verbal assurances by the Promoters of the Three C Group, who represented that the transfer of shares would facilitate the development of valuable properties owned by these companies, namely Plot FH-17, Sector 133, Noida (owned by Challengerz) and Plot 8A, Sector 127, Noida (owned by Hacienda). 4. The Appellant submitted that they were induced to enter into these agreements based on assurances that the properties were free of encumbrances and that the Appellant would gain full management control and physical possession of the properties to develop and market them. The Appellant further submitted that the Promoters personally assured attractive and financially viable terms, promising significant profits for the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Appellant's rights. The Appellant contended that the Corporate Debtor and the Promoters caused the bank accounts of Challengerz and Hacienda to be frozen through fraudulent letters dated 17.10.2018 sent to the Manager, Bank of India, Mohali, accompanied by backdated and forged documents. The Appellant further submitted that the Corporate Debtor, through Three C Builders Pvt. Ltd. (a non-shareholder in Hacienda or Votive Propbuild Pvt. Ltd.), misrepresented facts in a letter dated 25.10.2018 to the authorities. This letter falsely claimed that a sale of properties owned by Hacienda and Votive Propbuild Pvt. Ltd. was to occur, leading to the wrongful attachment of Hacienda's property (Plot 8A, Sector 127, Noida) to satisfy a recovery decree of Rs. 34.75 Crores issued by the National Consumer Disputes Redressal Commission (NCDRC) on 05.09.2018 against six Judgment Debtors, including the Corporate Debtor and the Promoters. 10. The Appellant contended that the attachment, ordered by the Sub- Divisional Magistrate, Dadri, on 27.10.2018, was blatantly illegal, as Three C Builders Pvt. Ltd. had no legal authority to act on behalf of Hacienda or Votive Propbuild Pvt. Ltd. The Appellan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....judicating Authority cannot assume jurisdiction over matters pending before another tribunal or court. 14. The Appellant submitted that the applications and the impugned order are infructuous due to the loss of original share certificates of Challengerz and Hacienda. The Appellant contended that in August 2019, they misplaced a bag containing these documents at City Centre, Khanna. Despite efforts, including filing a police complaint (No. 105-5D, dated 26.10.2019) and a reminder application dated 09.06.2020 with the Deputy Superintendent of Police, Khanna, the documents remain unrecovered. The Appellant submitted that this fact could not be presented during the hearing on 29.07.2020 due to technical disruptions disconnecting their counsel, and the briefing counsel was not permitted to make further submissions. 15. The Appellant contended that the Adjudicating Authority erred in failing to recognize that the original title deeds and documents of the properties held by Challengerz (Plot FH-17, Sector 133, Noida) and Hacienda (Plot 8A, Sector 127, Noida) belong to these companies as separate legal entities, not the Corporate Debtor. The Appellant submits that the Corporate Debto....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ents of the Corporate Debtor. 22. The Respondent further submitted that, under the provisions of Section 18(1)(a), (d), and (f) of the Code, the Interim Resolution Professional is entrusted with a range of duties, which are equally applicable to the Resolution Professional post-appointment. The Respondent contended that these statutory obligations unequivocally mandate the Resolution Professional to secure and take possession of all assets of the Corporate Debtor, including the original share certificates and related documents that form part of the Corporate Debtor's estate 23. The Respondent submitted that, upon assuming control and charge over the management and affairs of the Corporate Debtor, it came to his knowledge that the Corporate Debtor had entered into Agreements to Sell dated 08.10.2018 with the Appellant herein. The Respondent contended that these Agreements were executed for the sale of shares held by the Corporate Debtor in the subsidiary companies, namely Challengerz for a total consideration amounting to Rs. 10 crores and Hacienda for a total sale consideration of Rs. 30,93,75,000. The Respondent asserted that these financial terms were explicitly stipulated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itted that, as the duly appointed Resolution Professional, he was legally and morally duty-bound to discharge the responsibilities entrusted to him under Sections 18 and 25 of the Code. Accordingly, upon taking over the charge and management of the Corporate Debtor, the Respondent had undertaken all necessary and appropriate steps in strict compliance with the law and the provisions of the Code to ensure the protection and custody of any asset over which the Corporate Debtor retains ownership rights, as recorded in the balance sheet of the Corporate Debtor. The Respondent contended that this includes the original share certificates of Hacienda and Challengerz along with all other original documents that were temporarily possessed by the Appellant. 27. The Respondent submitted that the Appellant, with the sole intention of deviating the attention of this Appellate Tribunal, has raised frivolous and extraneous contentions regarding an alleged dispute between the Appellant and the promoters of the Three C Group, namely Mr. Nirmal Singh, Mr. Supreet Singh Suri, and Mr. Vidur Bhardwaj. The Respondent contended that these contentions have no bearing whatsoever on the subject matter of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly sound decision that upholds the rights of the Corporate Debtor and the Resolution Professional to reclaim its assets. 30. The Respondent submitted that the status quo order dated 05.04.2019, as pleaded by the Appellant only serves to support the Respondent's claim, as it mandates the maintenance of the status quo regarding the shareholding of Hacienda and Challengerz, which are 100% subsidiaries of the Corporate Debtor. The Respondent asserted that, as of the present date, the shareholding of the said companies continues to vest exclusively with the Corporate Debtor. The Respondent further submitted that the Appellant has no legal or equitable right whatsoever to hold custody of the original share certificates of Hacienda and Challengerz. 31. The Respondent referred to the judgment of the Hon'ble Delhi High Court in Liberty House Group Pvt. Ltd. v. State Bank of India and Ors., reported in MANU/DE/0727/2019, which reaffirmed that no civil court shall have jurisdiction over matters within the purview of the NCLT under the Code. 32. The Respondent submitted that the Appellant has, for the very first time and under the garb of the instant Appeal, raised a frivolous content....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re us that ATS dated 08.10.2018 between the Corporate Debtor and according to the Appellant, the Corporate Debtor was required to transfer 100% shareholding of both the companies i.e., Hacienda and Challengerz. Further, the Corporate Debtor was required to get requisite permission and approvals from various authorities within 11 months of the ATS and thereafter, the Appellant was required to pay the balance consideration. It has also been pleaded that 2% of the consideration was paid and acknowledged by the Corporate Debtor as stipulated in Clause 1 of the ATS dated 08.10.2018. 36. The Appellant has also brought out that in terms of Clause 6 of ATS, possession of title deed of property owned by Hacienda and Challengerz along with share certificates and some statutory documents were handed over to the Appellant. The Appellant further brought out that Corporate Debtor initiated proceedings against the Appellant under Section 241 and 242 of the Companies Act, 2013 in respect of Hacienda and Challengerz and status quo order of shareholding was passed by the National Company Law Tribunal on 05.04.2019. 37. During arguments, the Appellant conceded that he was willing to return back....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under: - "25. Duties of resolution professional: (2) For the purposes of sub-section (1), the resolution professional shall undertake the following actions, namely: - (a) take immediate custody and control of all the assets of the corporate debtor, including the business records of the corporate debtor;" (Emphasis Supplied) This makes position quite clear in favour of the Respondent. 42. We further observe that in terms of Section 18(1)(a), (d) and (f) of the Code, the Respondent/Resolution Professional is also required to take over the assets of the Corporate Debtor. The relevant portion reads as under: - "18. Duties of interim resolution professional. -The interim resolution professional shall perform the following duties, namely: - (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to- (i) business operations for the previous two years; (ii) financial and operational payments for the previous two years; (iii) list of assets and liabilities as on the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a corporate entity and not a personal property of any individual, hence, the whole process of the Appellant taking possession of the share certificate, without following due process and without paying the consideration, is fallacious and not legal. 44. The Appellant conceded that he was willing to handover the shares of Hacienda and Challengerz, however, it was not possible due to fact that the same was lost by the Appellant at City Centre, Khanna, Punjab. The Appellant also tried to impress upon us that he has taken the reasonable steps of following it up with the police. In this connection, it was perplexing to understand as to why the Appellant had chosen to take such important documents to City Centre, Khanna. On a pointed query by the Appellate Tribunal to the Appellant, the Appellant could not give any satisfactory answer and could not satisfy to why no proper FIR was filed. The Appellant merely filed police complaint bearing No. 105-5D, dated 26.10.2019 which does not reflect the seriousness of the Appellant. We also note that the Appellant, for the first time, has raised this contention concerning a purported police complaint filed on 26.10.2019 and 28.10.2019 at P.S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n respect of Hacienda as stipulated in Clause 1 of the agreement. We also note that the Resolution Professional has brought out clearly that the Appellant has failed to perform its obligation of payments under said ATS and therefore, the Resolution Professional had served notice of termination dated 16.01.2020 asking the Appellant to make the payment, failing which the said ATS shall be deemed to be terminated. 49. The Appellant has claimed that he has already paid 2% of consideration amount in the bank account of the Corporate Debtor. However, on asking specific details by this Appellate Tribunal, the Appellant could not identify and clarify exact date of the transaction through which such payment was made or specific details of payments made. The Appellant repeated that he made payments to the Corporate Debtor in newly opened bank account with Bank of India, sometime in September, 2010. At this stage, we reiterate that we could not find any such details of payments to the Corporate Debtor in the appeal paper book or other submitted documents by the Appellant. It is also interesting to note that the Appellant has claimed to make payment sometime in September, 2010, whereas the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and (c) any question of priorities or any question of law or facts arising out of or in relation to the insolvency resolution or any liquidation proceedings of the corporate debtor or corporate person under this Code." (Emphasis Supplied) 54. We will also refer to Sections 63, 231, and 238 of the Code, which bars any civil court or other authority, except NCLT or Appellate Tribunal, from taking cognizance of matters pertaining to the CIRP process. The relevant provisions are reproduced hereunder: "Section 63: Civil court not to have jurisdiction- No civil court or authority shall have jurisdiction to entertain any suit or proceedings in respect of any matter on which National Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under this Code. Civil court not to have jurisdiction... Section 231: Bar of jurisdiction- "No civil court shall have jurisdiction in respect of any matter in which the Adjudicating Authority or the Boar....