2023 (3) TMI 1477 - AT - Insolvency and Bankruptcy

Seeking Leave, to prefer an Appeal, against the Impugned Order - Person, who is not a Party, to the Original Proceedings, can prefer an Appeal or not - petitioner contends that in deciding, whether a Leave, must be granted, an Application / Appeal, ought to be taken on Demurrer, and the merits of the matter, cannot be gone into, for the sake of determining an Application, praying for Leave? - Section 61 (3) of the I B Code, 2016 - HELD THAT - It is pertinently pointed out that the 1st Respondent / Petitioner, had filed an application, before the Adjudicating Authority ( Tribunal ), as per Section 60(5) of the I B Code, 2016, read with Regulations 32A (e), seeking Sale of the Corporate Debtor, as a Going Concern, through a Private Sale, along with other Reliefs. Indeed, the 2nd Respondent (G C Logistics India Private Ltd. / Buyer), is arrayed as a Party, in the said Application. It transpires that the Petitioner / Shareholder of the Corporate Debtor, was not part of the Stakeholders Consultation Committee, and in fact, there is no obligation, on the part of the 1st Respondent / Liquidator, to consult the Petitioner / Appellant, for any reason - It cannot be ignored, that the Petitioner / Appellant, had not filed any Claim Form, in Form G, during Liquidation Period. In terms of Regulation 20 of the IBBI (Liquidation Process) Regulations, 2016, the Petitioner, has no connection to the Liquidation Process, and later to the Sale of the Corporate Debtor. In the instant case, the Petitioner / Appellant, was not in a position to prove that he is an Individual, eligible to regain control of the Corporate Debtor, there being no disqualification, as per Section 29A of the I B Code, 2016 - As a matter of fact, a Scheme, was put before the Stakeholders Consultation Committee Members, in their 9th Meeting, dated 30.10.2021 and a Secured Creditors meeting, was conducted by the 1st Respondent / Liquidator, to consider the Proposal, as per Section 230 of the Companies Act, 2013. In fact, the Petitioner / Appellant, was informed that the Proposal Terms, were not acceptable, by the Stakeholders Consultation Committee and the Secured Creditors. Keeping in mind of a candid fact that the Petitioner / Appellant, is not, a Stakeholder in the Liquidation Process of the Corporate Debtor, and has no vested interest in the Corporate Debtor, taking note of the fact that the Payment Consideration of Rs.44,64,00,000/- and the same was distributed, as per Section 53 of the I B Code, 2016, comes to a conclusion that the Leave, prayed for, by the Petitioner / Appellant, to prefer the present Company appeal is not accorded to, by this Tribunal, based on the facts and surrounding circumstances of the case, which float on the surface. Appeal dismissed.

Summary

Issues Involved:
1. Whether the Petitioner/Appellant, a shareholder of the Corporate Debtor, has the locus standi to file an appeal against the impugned order.
2. Whether the Petitioner/Appellant, not being a party to the original proceedings, can prefer an appeal.
3. Whether the Petitioner/Appellant's proposed scheme was considered by the Liquidator.

Summary:

Issue 1: Locus Standi of the Petitioner/Appellant
The Petitioner/Appellant, holding 55.19% equity shares of the Corporate Debtor, sought 'Leave' to appeal against the impugned order dated 19.01.2023. The Petitioner contended that his proposed scheme was not considered by the Liquidator, thereby prejudicing his interests. However, the Tribunal noted that the Petitioner had not filed any 'Claim Form' during the liquidation period and was not part of the 'Stakeholders Consultation Committee'. Consequently, the Petitioner had no connection to the liquidation process or the sale of the Corporate Debtor, and thus, lacked the locus standi to file the appeal.

Issue 2: Appeal by Non-Party to Original Proceedings
The Petitioner/Appellant argued that even a person not party to the original proceedings could prefer an appeal, citing Supreme Court judgments. However, the Tribunal observed that the Petitioner had not taken steps to be impleaded in the original proceedings and had not filed objections to the application for the sale of the Corporate Debtor. The Tribunal emphasized that the Petitioner was aware of the ongoing proceedings and could have filed an application before the Adjudicating Authority if aggrieved. Therefore, the Petitioner's appeal was not maintainable as he was not a party to the original proceedings.

Issue 3: Consideration of Petitioner's Proposed Scheme
The Liquidator and the 2nd Respondent contended that the Petitioner's proposed scheme was considered but found unacceptable by the Stakeholders Consultation Committee and the Secured Creditors. The Tribunal noted that the Petitioner had submitted a proposal for settlement under Section 230 of the Companies Act, 2013, but it was rejected by the stakeholders. The Tribunal also highlighted that the Petitioner had previously filed appeals before the Appellate Authority and the Supreme Court, which were dismissed.

Conclusion:
The Tribunal concluded that the Petitioner/Appellant, not being a stakeholder in the liquidation process and having no vested interest in the Corporate Debtor, could not be granted leave to appeal. Consequently, IA No. 125 of 2023 was dismissed, and the main appeal, Comp. App (AT) (CH) (INS.) No. 34 of 2023, was rejected. The connected pending IA Nos. 126 and 127 of 2023 were also closed.