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2022 (8) TMI 175 - Tri - Insolvency and BankruptcySeeking release of amount in no-lien account, in the name of members of CoC, with the Financial Creditor - recording of decision of withdrawal of Resolution Plan - HELD THAT - Respondent Nos. 3 to 6 are the people who are really responsible for failure of CIRP process of M/s Unimetal Castings Ltd and the same Respondents are also part of the present Applicant M/s Globomet Engineering Pvt. Ltd. Therefore, it is very clear from the above conduct of the Applicant that the applicant is trying to take advantage of their own wrong and demanding refund only from COC by exonerating its own people from their personal liability. Therefore, the application is nothing but a collusive application filed by Applicant at the behest of Respondent Nos. 3 to 6. It is also observed that the applicant is altogether a third party who has nothing to do with the CIRP process of either of the Companies and the present Application under Section 60(5) of the Code is not legally maintainable. The argument of the learned counsel appearing for the Petitioners to the effect that arbitration clause is not a bar for filing the Application or instituting proceedings before the NCLT does not apply to the present case both on facts and law. Thus, this tribunal has no jurisdiction to decide the above contractual disputes arising between the parties out of the CIRP process of both the Companies more so under the above MOU and the above IA is liable to be dismissed on that score alone. Application dismissed.
Issues:
1. Refund and release of amount by CoC to the Applicant. 2. Decision recording by Respondent No. 1 for withdrawing from Resolution Plan. 3. Settlement amount offered by Globomet for UCL and JDECL. 4. Delay in adhering to stipulations due to COVID-19. 5. Withdrawal of Insolvency Proceedings against JDECL. 6. Submission of Resolution Plan by the director of UCL. 7. Jurisdictional issues related to the application under Section 60(5) of the Code. 8. Arbitration clause in the MOU dated 04.07.2019. Analysis: 1. The Interlocutory Application sought the CoC to refund and release INR 3,25,00,000 to the Applicant. The Applicant, an investment vehicle, was not a party to the CIRP process of UCL or JDECL. The CoC of UCL decided on liquidation due to no viable Resolution Plan. A belated Resolution Plan was rejected post CIRP period. A settlement amount was offered by Globomet, leading to MOUs with stipulations for depositing amounts in a no-lien account. 2. The 1st MOU stipulated conditions for depositing amounts, which were revised due to the COVID-19 pandemic in the 2nd MOU. The 12A Application for JDECL's withdrawal from insolvency proceedings was allowed. The Resolution Plan for UCL was agreed upon by the COC, subject to a Performance Guarantee not yet submitted by the Resolution Applicant, leading to delays. 3. The Tribunal observed that time was not of the essence in the MOUs and that the 12A application for JDECL was legally binding. The belated application for refund was seen as an afterthought to cover up lapses. The Applicant's selective demand for refund from the CoC was deemed collusive, trying to evade personal liability. 4. The Applicant's lack of involvement in the CIRP process of the companies raised jurisdictional issues under Section 60(5) of the Code. The Tribunal lacked jurisdiction for specific performance as per settled law. An arbitration clause in the MOU indicated disputes should be referred to arbitration, not the Tribunal. 5. The Tribunal found no merit in the application, imposing costs on the Applicant for an exceptional case. The application was dismissed, allowing the Applicant to pursue legal proceedings within the law of limitation.
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