2022 (6) TMI 499 - Tri - Insolvency and Bankruptcy

Seeking release of Statutory electronic and physical Books of Accounts of the Applicants 1-3 to enable them to file their Income Tax and Goods and Service Tax Returns and other statutory filings with the respective departments - seeking release of 8 generators (which includes engine, alternator, and an enclosure), 2 Alternators and its Electrical panels purchased by the 3rd Applicant from 3rd party vendors, subject to submission of Form G and such other conditions - seeking release of generators and motors that belong to Bharat Sanchar Nigam Limited (BSNL), Fertilizers and Chemicals Travancore Ltd (FACT) and the Kerala Minerals and Metals Ltd. (KMML) who are the customers of the 2nd applicant which were brought to the factory for carrying out certain repairs, subject to submission of Form G - seeking release of Mobile Phone of the General Manager - seeking release of John Deere spare parts imported by the 1st Applicant. Whether the reliefs sought for in this application can be granted by this Tribunal? - HELD THAT - This application has been filed by (i) Cornier Private Limited (ii) Cornier Power Systems Pvt. Ltd and (iii) M/s Whispower Sales Services Pvt.Limited. According to the constitution of applicants herein and the Corporate Debtor, it shows that in the Corporate Debtor Mr.Thomas George and Asha Mary Thomas have 49% shareholding, in 3rd applicant Whispower Generator Sales and Services (P) Ltd. the above persons have 100% shareholding, in 2nd applicant Cornier Power Systems Pvt. Ltd the above persons have 100% shareholding and in 1st applicant cornier Private Limited, the son of Mr.Thomas George and Daughter in Law of Thomas George has 100% shareholding. From the above, it is clear that they are related parties to the Corporate Debtor. This application has been filed by the applicants in order to flout the directions contained the above order. Since the Corporate Debtor s suspended Directors Mr. Thomas George and Mrs. Asha Mary Tomas are having 100% shares in the 2nd and 3rd applicant companies and their son and daughter in law having 100% share in the 1st applicant company, they are estopped from raising such a claim that they want to get the reliefs sought in this application. Strictly speaking the properties mentioned in his application has been admittedly purchased by the 3rd applicant, which is a related party to the Corporate Debtor as per Section 5(24A) of the IBC, 2016 and that the 3rd applicant did not raise such claims over these properties by failing an objection to the Section 66 application while it was adjudicated - Since no third party came forward with such a request and the that the applicants are related parties to the Corporate Debtor, the Liquidator need not release such properties, as those properties are of the Corporate Debtor and the Liquidator have full control over them. Since these applicants are related parties of the Cooperate Debtor, they are approaching with this application raising the issue that the generator and motors belong to BSNL, FACT, and KMML and they are the customers of the 2nd applicant and they brought it for repairs - there are no reason to interfere in the matter and grant any relief to the applicants - application dismissed.

Issues Involved:
1. Release of statutory electronic and physical books of accounts.
2. Release of 8 generators, 2 alternators, and electrical panels.
3. Release of generators and motors belonging to third-party customers.
4. Release of the General Manager's mobile phone.
5. Release of John Deere spare parts.

Comprehensive, Issue-wise Detailed Analysis:

1. Release of Statutory Electronic and Physical Books of Accounts:
The applicants sought the release of their statutory electronic and physical books of accounts to file their Income Tax and Goods and Service Tax Returns. The tribunal noted that the applicants and the Corporate Debtor had common directors and were related parties. The tribunal had previously declared transactions involving these parties as fraudulent and directed the respondents to make good the losses caused to the creditors of the Corporate Debtor. The tribunal found that the applicants were attempting to flout the directions of the previous order, and since they were related parties, they were estopped from raising such claims. Consequently, the tribunal dismissed the application for the release of books of accounts.

2. Release of 8 Generators, 2 Alternators, and Electrical Panels:
The applicants requested the release of generators and alternators purchased from third-party vendors. The tribunal observed that the 3rd applicant, who purchased these items, was a related party to the Corporate Debtor. The tribunal emphasized that the related party did not raise any claims over these properties during the adjudication of the Section 66 application. According to Regulation 20 of the IBBI (Liquidation Process) Regulations, the liquidator is not required to keep properties of third parties unless a claim is submitted in 'Form No. G' by such third-party owners. Since no such claim was submitted and the applicants were related parties, the tribunal ruled that the liquidator need not release these properties.

3. Release of Generators and Motors Belonging to Third-Party Customers:
The applicants claimed that the generators and motors belonging to Bharat Sanchar Nigam Limited (BSNL), Fertilizers and Chemicals Travancore Ltd (FACT), and the Kerala Minerals and Metals Ltd. (KMML) were brought to the factory for repairs and should be released. The tribunal noted that the applicants were related parties to the Corporate Debtor and had not submitted any claims in 'Form No. G' as required by Regulation 20 of the IBBI (Liquidation Process) Regulations. The tribunal found no merit in the applicants' contention and ruled that the liquidator had already taken possession of the properties, including the said machinery, as part of the liquidation estate of the Corporate Debtor. Therefore, the tribunal dismissed the application for the release of these items.

4. Release of the General Manager's Mobile Phone:
The applicants sought the release of the General Manager's mobile phone. The tribunal did not specifically address this issue in its detailed analysis, but it can be inferred from the overall judgment that since the applicants were related parties and the liquidator had taken possession of all properties within the factory premises, the tribunal found no reason to interfere and grant the relief sought. Consequently, the request for the release of the mobile phone was also dismissed.

5. Release of John Deere Spare Parts:
The applicants requested the release of John Deere spare parts imported by the 1st applicant. The tribunal reiterated that the applicants were related parties to the Corporate Debtor and had not submitted any claims in 'Form No. G' as required by the regulations. The tribunal emphasized that the properties were under the control of the liquidator as part of the liquidation estate of the Corporate Debtor. Therefore, the tribunal dismissed the application for the release of the John Deere spare parts.

Conclusion:
The tribunal, after considering the related party status of the applicants and the previous orders declaring transactions as fraudulent, dismissed the application in its entirety. The tribunal found no merit in the applicants' contentions and ruled that the liquidator had full control over the properties as part of the liquidation estate of the Corporate Debtor. The applicants were directed to cooperate with the liquidator for an early resolution in the matter. The application was dismissed without costs.

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