2021 (5) TMI 307 - Tri - Insolvency and Bankruptcy

Seeking release of title deeds before the CoC of the respondent - title deeds of the assets/rights of the Corporate Debtor - Resolution Applicants are not banking company, but a private organization, while the Financial Creditors have facilities to securely hold the same under safe custody - HELD THAT - The Tribunal was constrained to summon the Resolution Professional as well as the Financial Creditors. They were asked to produce original title deeds. Today, they were present before the Tribunal along with the original title deeds as directed by the Tribunal. The Resolution Professional and the Financial Creditors have represented their respective cases. The Financial Creditors have submitted that the holding company too is under CIRP and they have apprehension that if the original title deeds are handed over to the successful Resolution Applicant, he may dispose of the properties in question, wherein there is charge for holding company, which is under CIRP. The Financial Creditors are directed to hand over the original title deeds to the successful Resolution Applicant in respect of lands at Bhoothpur and Vadodara and also to give No Objection Certificate (NOC) in favour of Resolution Applicant as provided in the Resolution Plan, and to release pledge of shares - successful Resolution Applicant shall not dispose of/alienate the properties of the Corporate Debtor without prior and specific order of this Tribunal, in order to protect the interest of the Financial Creditors and all the stakeholders. Application disposed off.

Issues Involved:
1. Release of title deeds and their custody.
2. Issuance of No Objection Certificate (NOC) for leasehold rights.
3. Discharge of Financial Creditors from the Monitoring Committee.
4. Implementation of the approved Resolution Plan.
5. Compliance with previous Tribunal orders.

Detailed Analysis:

1. Release of Title Deeds and Their Custody:
The primary issue revolves around the release of title deeds held by IDBI Bank and Axis Bank, which are Financial Creditors. The applicant, IDBI Bank, sought directions for the Interim Resolution Professional (IRP) of Aster Pvt. Ltd. to present the matter to the Committee of Creditors (CoC) to determine the custodian of these deeds. The Tribunal had previously directed IDBI Bank and Axis Bank to hand over the title deeds to the successful Resolution Applicant for effective implementation of the Resolution Plan. However, the Financial Creditors expressed concerns about the Resolution Applicant potentially disposing of the properties, which are under charge for the holding company also under CIRP.

2. Issuance of No Objection Certificate (NOC) for Leasehold Rights:
The applicant argued that no NOC was required from GIDC as per their letter dated 15.10.2015. However, the Tribunal had earlier directed the Financial Creditors to issue NOCs to facilitate the transfer of leasehold rights to the Resolution Applicant. The Resolution Applicant contended that the CoC’s failure to issue the NOC would hinder the implementation of the Resolution Plan, leading to potential withdrawal from the plan.

3. Discharge of Financial Creditors from the Monitoring Committee:
The applicant requested the discharge of the erstwhile Financial Creditors from the Monitoring Committee, asserting that their obligations under the Resolution Plan were completed. The Tribunal noted that the role of respondent no. 4 had changed from Resolution Professional to Chairperson of the Monitoring Committee, responsible only for supervising the implementation of the Resolution Plan.

4. Implementation of the Approved Resolution Plan:
The Tribunal observed that despite multiple orders directing the Financial Creditors to comply with the Resolution Plan, including the release of security interests and issuance of NOCs, compliance was still pending. The Tribunal emphasized the necessity of these actions for the successful implementation of the Resolution Plan.

5. Compliance with Previous Tribunal Orders:
The Tribunal reiterated its directions from previous orders, emphasizing the need for the Financial Creditors to comply with the Resolution Plan. The Tribunal had issued multiple orders directing the release of title deeds and the issuance of NOCs, but these directives had not been fully executed, leading to the current application.

Order:
The Tribunal issued the following directions to address the issues:

1. Handing Over Title Deeds and Issuance of NOC:
- The Financial Creditors were directed to hand over the original title deeds to the successful Resolution Applicant for the lands at Bhoothpur and Vadodara.
- The Financial Creditors were also directed to issue the necessary NOC in favor of the Resolution Applicant as stipulated in the Resolution Plan.

2. Restriction on Disposal of Properties:
- The successful Resolution Applicant was prohibited from disposing of or alienating the properties of the Corporate Debtor without a prior and specific order from the Tribunal to protect the interests of the Financial Creditors and other stakeholders.

3. Release of Pledge of Shares:
- The Banks were directed to release the pledge of shares in favor of the successful Resolution Applicant upon receiving the payments outlined in the Resolution Plan.

The application (IA No. 117 of 2020) was disposed of in accordance with these terms, ensuring the compliance of the Financial Creditors with the Tribunal's orders for the effective implementation of the Resolution Plan.

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