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2022 (9) TMI 633 - AT - Insolvency and BankruptcyApproval of the Resolution Plan - Resolution Plan challenged on the ground that all claims/demands/liabilities owed or payable to the Operational Creditors including the Appellant itself ought not to be permanently extinguished - HELD THAT - Keeping in view of the fact that the Resolution was already approved vide Impugned Order dated 19.10.2020 and almost two years have passed and specifically that there are contrary stands taken by both parties with respect to the possession and the ownership of the subject land and also taking into consideration the Order of the Adjudicating Authority dated 02.02.2021 taking on record the terms of settlement between Mr. Pradeep Agarwal and the Resolution Applicant regarding the subject land, it is found a fit case to grant liberty to the Appellant to proceed in accordance with law in an appropriate forum. Appeal allowed in part.
Issues Involved:
1. Inclusion of personal property in the Resolution Plan. 2. Violation of principles of natural justice. 3. Right to enforce the Mortgage Deed. 4. Jurisdiction and scope of NCLT and NCLAT under IBC. Issue-Wise Detailed Analysis: 1. Inclusion of Personal Property in the Resolution Plan: The Appellant contended that the personal property of the Promoter, Mr. Pradeep Agarwal, could not be included in the Resolution Plan as it is not an asset of the Corporate Debtor. The Mortgage Deed executed on 27.03.2018 between Mr. Pradeep Agarwal and the Appellant secured the repayment of dues owed by the Corporate Debtor. The Appellant argued that, as per Section 18(f) of the IBC, the RP could only take control of assets over which the Corporate Debtor has ownership rights, and the personal property of the third-party Mortgager does not fall within this definition. The Tribunal noted the conflicting claims regarding the ownership and possession of the subject land and acknowledged that the land was not reflected in the Corporate Debtor's books of accounts. 2. Violation of Principles of Natural Justice: The Appellant argued that the Tribunal passed the Impugned Order without giving an opportunity to the Appellant to be heard, violating the principles of natural justice. The Appellant was not notified, and the Resolution Plan was approved without their consent. The Tribunal acknowledged this contention but emphasized the need to balance the rights of all parties involved. 3. Right to Enforce the Mortgage Deed: The Appellant asserted that the Resolution Plan could not extinguish their Mortgage claim over the personal property without their express consent. They cited the Supreme Court's judgment in 'Lalit Kumar Jain vs. Union of India & Ors.' which clarified that approval of a Resolution Plan does not discharge a Personal Guarantor of liabilities under a contract of guarantee. The Tribunal recognized the Appellant's right to enforce the Mortgage Deed against the third-party Mortgager and not the SRA, and noted that the Appellant could proceed against the Personal Guarantor for recovering the remaining dues. 4. Jurisdiction and Scope of NCLT and NCLAT under IBC: The Tribunal examined its jurisdiction within the framework of IBC, referencing the Supreme Court's judgment in 'Arun Kumar Jagatramka vs. Jindal Steel and Power Limited,' which cautioned against judicial interference in the IBC framework. The Tribunal emphasized the need to maintain the foundational principles of IBC and avoid unnecessary judicial intervention. Assessment and Conclusion: The Tribunal noted the peculiar facts of the case, including the conflicting claims about the subject land's possession and ownership, and the settlement terms between Mr. Pradeep Agarwal and the Resolution Applicant. Given these circumstances and the time elapsed since the Resolution Plan's approval, the Tribunal found it appropriate to grant the Appellant liberty to proceed in accordance with the law in an appropriate forum. The Appeal was partly allowed to this extent.
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