2019 (4) TMI 2078 - AT - Insolvency and Bankruptcy

Reversal of debits which has been made from the FD account - all the participants of the Committee of Creditors may be put on an equal footing to the extent of their voting rights in the Committee of Creditors - HELD THAT - It will be open to the Resolution Professional to utilise the money for the purpose of Resolution Costs to keep Corporate Debtor a going concern and in such case, the State Bank of India may ask for appropriate relief from the Resolution Professional - Appeal disposed off. Maintainability of appeal - time limitation - HELD THAT - The Appellant Punjab National Bank having preferred this appeal against the same very impugned order dated 23rd May, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), Division Bench, Chennai, after delay of 50 days beyond the period of 30 days. In this circumstances, the delay is beyond 15 days from the 30 days of date of filing, this Appellate Tribunal has no jurisdiction to condone the delay - The appeal is dismissed being barred by limitation.

Summary

Issues:
1. Challenge to the impugned order dated 23rd May, 2018 by the State Bank of India.
2. Debiting of the FD account during the Moratorium period.
3. Approval of the arrangement by the Resolution Professional.
4. Jurisdiction to condone the delay in filing the appeal by Punjab National Bank.

Analysis:
In Company Appeal (AT) (Insolvency) No. 329 of 2018, the State Bank of India contested the order directing it to reverse debits made from the FD account during the Corporate Insolvency Resolution Process. The Senior Counsel for the Appellant argued that the margin money in the FD account belonged to the Corporate Debtor and should not have been debited during the Moratorium period. It was revealed that the amount was intended for paying Operational Creditors before the Resolution Process, and the Resolution Professional had also approved this arrangement. The Tribunal declined to interfere with the impugned order, allowing the State Bank of India to take action post-Moratorium. Furthermore, the Resolution Professional was permitted to use the money for Resolution Costs to maintain the Corporate Debtor's operations, with the State Bank of India having the option to seek relief from the Resolution Professional. The appeal was disposed of with these directives.

In Company Appeal (AT) (Insolvency) No. 529 of 2018, Punjab National Bank filed an appeal against the same impugned order but with a delay of 50 days beyond the 30-day limit. The Appellate Tribunal noted that the delay exceeded 15 days from the 30-day filing period, thus lacking the jurisdiction to condone the delay. Consequently, the appeal by Punjab National Bank was dismissed as it was time-barred.

This detailed analysis covers the challenges to the impugned order, the issue of debiting the FD account during the Moratorium period, the Resolution Professional's approval of the arrangement, and the jurisdictional aspect of condoning the delay in filing the appeal by Punjab National Bank.