TaxTMI 
TaxTMI 
2025 (10) TMI 1197
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....Listing Fee (ALF) of M/s. CALS Refineries Ltd., one of its group companies, appellant has preferred this appeal. 2. Brief facts governing the issue are as follows: (i) Cals (Cals Refineries Ltd.) was incorporated in 1984 and subsequently listed on BSE in 1994. Spice Energy (Spice Energy Pvt. Ltd.) i.e., the appellant was incorporated in 2007. Nyra Holdings (Nyra Holdings Private Limited (A subsidiary to Spice energy)) is a 100% subsidiary of appellant. (ii) The appellant had given unsecured loan of Rs. 32.61 crores to Nyra, out of which Nyra had invested Rs. 10.38 crores in Cals by way of loan and the remaining amount as equity, which constituted 2% of Cals equity. (iii) Pursuant to a Tripartite Agreement dated March 24, 2017 executed amongst Nyra, the appellant, and Cals, the parties mutually consented to the consolidation and transfer of investments (made by Nyra in Cals). Consequently, Nyra assigned all its claims and entitlements arising under the Loan Agreement dated April 1, 2014 to the appellant. Additionally, Nyra effected the transfer of its entire shareholding in Cals, (representing approximately 2% of the Cals equity) in favor of the appella....
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....eating appellant as 'promoter' of Cals. (xii) Starting from January 21, 2023, several correspondences took place between appellant and respondent by which respondent was informed of CIRP / liquidation process of Cals and moratorium under Section 14. On April 4, 2023, the appellant replied to the queries of respondent. (xiii) The appellant's request for review was rejected by the Request Review Committee of respondent BSE on April 26, 2023 and vide the impugned order, freezing of the demat account of the appellant was confirmed. 3. We have heard Mr. Ravi Prakash, learned advocate alongwith Ms. Kriti Karn, Mr. Siddhant Sekhri, Ms. Menali Jain, Mr. Varun Litoriya, Mr. Vaibhav Malhotra, Mr. Vishal Jain, Ms. Mahek Gupta, Mr. Mohit Sirohi, Ms. Mahima Khandelwal, learned advocates for the appellant and Mr. Pesi Modi, learned senior advocate with Mr. Manish Chhangani, Mr. Sumit Yadav, Mr. Abhay Chauhan, Mr. Atul Kumar Agrawal, Mr. D Kalyan Reddy, learned advocates for the Respondent. 4. Mr. Ravi Prakash, learned advocate for the appellant submitted as under: 4.1 The company (Cals), was under CIRP since November 2017. However, respondent BSE failed to make claim o....
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....ALF dues is imposed on promoters under the circular / Regulation 14 of the LODR Regulations. It was submitted that actions against promoters are valid only when such liability is established, which BSE has failed to do. Even the stage 3 notice dated December 1, 2022 directs the demand for ALF dues to Cals, and not to its 'promoters'. 4.7 To that effect, he placed reliance on the judgment of Hon'ble Supreme Court in Anjali Rathi (Anjali Rathi v. Today Homes and Infrastructure Pvt. Ltd. (2021) 6 SCC 728) and Ansal Crown Heights (Ansal Crown Heights Flat Buyers Assn. (Regd.) vs. Ansal Crown Infrabuild Pvt. Ltd. & Ors. (MANU/SC/0055/2024)). In view of above, he prays that appeal may be allowed. 5. Mr. Pesi Modi, learned senior advocate for the respondent submitted as under: 5.1 The demat account of the appellant has been frozen over time for multiple reasons i.e., (i) non-compliance with LODR Regulations; (ii) on the basis of SEBI's directions contained in letter dated August 7, 2017 qua suspected "shell companies"; and (iii) for non-payment of ALF. 5.2 With regard to the freezing of appellant's demat account in 2023, it was submitted that as per ....
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.... in October 2017, an Interim Resolution Professional ('IRP') was appointed by the Hon'ble NCLT on November 23, 2017. Accordingly, the said IRP took over from the erstwhile Board of directors of Cals, which was got suspended and a moratorium under Section 14 of IBC commenced. Under Section 15 of the IBC vide a public notice, claims were invited by IRP from various creditors. Statutory creditors such as Income Tax department lodged their claims in terms of the said public notice. (iv) In terms of circulars of respondent BSE, there was an outstanding liability of ALF for Cals for the year 2016-17. No claim in this regard was undisputedly filed by the respondent BSE before the IRP. Based on the registered claims before him, the IRP invited resolution applications in terms of IBC. However, as no application was received, resolution could not be made, and the adjudicating authority approved initiation of liquidation proceeding under Section 33 of the IBC. Undisputedly, again no claim was filed by respondent BSE before the liquidator, as confirmed by the liquidator, vide email dated September 26, 2019. Eventually, the adjudicating authority passed the order for liquidation in 201....
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.... of specific provisions of Section 238 of IBC, the provisions of IBC shall override other laws as held in following authorities :- i. Sundaresh Bhatt, Liquidator of ABG Shipyard vs Central Board of Indirect Taxes and Customs (supra) [(2023) 1 SCC 472]; ii. Pr. Commissioner of Income Tax vs. Monnet Ispat and Energy Ltd. (supra) [(2018) 18 SCC 786] iii. Duncans Industries Ltd. vs. A. J. Agrochem [(2019) 9 SCC 725] iv. Rajendra K. Bhutta s. MHADA [(2020) 13 SCC 208] 6.3.1 In view of the above settled law position, the BSE circular shall have no application, once the Adjudicating authority has admitted applications by a creditor for insolvency resolution of a corporate debtor. The erstwhile promoters of the company have no role in the management of affairs of the company once a company is under CIRP. We also note that, in terms of the process of CIRP laid down in IBC, just like any other creditor, the respondent BSE was also required to file its claim in the prescribed form and manner before the IRP within the due date in response to the public notice in terms of Section 15 of the IBC. Undisputedly, no such claim was lodged by the respondent BSE. ....
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.... listed entity does not constitute 'recovery proceeding' against the company under Section 33(5) of the IBC, is untenable, since the embargo in terms of Section 14 covers ANY 'suit or proceeding' (which includes recovery proceeding or otherwise). Ostensibly freezing of demat accounts is also in the nature of a 'proceedings' under the SOP circular. In view of the above, we find no legal basis for freezing the demat accounts of the appellant for non- payment of ALF by Cals, while it was undergoing resolution / liquidation. 6.6. One of the key arguments of the respondent BSE is that the moratorium under Section 14 is applicable only to the corporate debtor and not to its promoters. In our considered view, the respondent has failed to appreciate the underlying objectives of the IBC, 2016, which was enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interest of all the stakeholders including alternation in order of priority of payment of govern....
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....anges were taking graded action in terms of SOP for violation of various other corporate governance norms in terms of their own circulars and later in pursuance of the SEBI circular dated January 22, 2020. However, the violation covered in Para No. 6 of the said SEBI circular also did not include 'non-payment of ALF' as one of the violations for which fines could be levied and similarly, the para No. 7-10 of the said circular do not call for any graded action against the listed entity or its promoters. However, the Stock Exchanges were still taking such harsh action, in response to which SEBI issued another circular dated February 11, 2021, which was later reiterated by the BSE through its circular dated June 25, 2021. The said circular clearly provides as under :- "The recognised Stock exchanges may keep in abeyance the actions against any non-compliant entity or withdraw the action in specific cases where specific exemption from compliance with the requirements under the listing regulations/ moratorium on enforcement proceedings has been provided for under or any Act, court/ tribunal orders." [emphasis supplied] 7.1 The finding in the impugned order that the promoter ....