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2022 (10) TMI 586 - AT - Insolvency and BankruptcySeeking to delete the Appellant and Respondents 3 to 7 as Financial Creditors of Reliance Infratel Limited (RITL) - seeking a direction to the RP to reconstitute the CoC by deleting the Appellant and Respondents 3 to 7 who were claiming to be the Financial Creditors of the Corporate Debtor on the basis of the Guarantees - Related party - HELD THAT - The contention of the Learned Sr. Counsel for the Appellant that 20.12.2017 has to be taken as the date of NPA and not 22.08.2016 is unsustainable as the Appellant themselves have declared the Corporate Debtor as an NPA, with effect from 26.08.2016, which indicates that the Corporate Debtor was in default for at least 90 days prior to 26.08.2016. This Tribunal in Avantha Holdings Ltd. 2022 (7) TMI 203 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI is not applicable to the facts of this case as the observation relied upon was in terms of the related party transaction and consequence submission of Resolution Plan by such a related party . This Tribunal is also conscious of the fact that it is obligatory under law to produce a document duly stamped in accordance with the provisions of Maharashtra Stamp Act, 1958, for it to be considered as being enforceable in law and claims were required to be submitted to the IRP i.e., the address in Maharashtra within the State of Maharashtra and it is only to evade the stamp duty, that the documents were not shared electronically with the IRP. It is relevant to mention that an Application under Section 30(6) of the Code was preferred by the Resolution Professional seeking approval of the Resolution Plan, in IA920/2020, which was allowed by the Adjudicating Authority, vide Order dated 03.12.2020. This Appeal is devoid of merit - Appeal dismissed.
Issues Involved:
1. Validity of the Corporate Guarantees executed by the Corporate Debtor. 2. Classification of the Corporate Debtor's account as Non-Performing Asset (NPA). 3. Compliance with Sections 186 and 187 of the Companies Act, 2013. 4. Admissibility of claims by the Appellant and Respondents 3 to 7 as Financial Creditors. 5. Reconstitution of the Committee of Creditors (CoC). 6. Approval of the Resolution Plan. Detailed Analysis: 1. Validity of the Corporate Guarantees: The Corporate Guarantees dated 03.03.2017 were executed by the Corporate Debtor in favor of the Appellant and Respondents 3 to 7. The Tribunal noted that the accounts of RCOM, RTL, and the Corporate Debtor were classified as NPA with effect from 26.08.2016. The Appellant argued that the Corporate Guarantees were executed before the declaration of NPA. However, the Tribunal found no documentary evidence supporting the disclosure of these Guarantees in the Financial Statements of the Corporate Debtor for the FY 2016-17 & 2017-18. The Tribunal questioned the timing and manner of these Guarantees, given the Corporate Debtor's financial constraints. 2. Classification of the Corporate Debtor's Account as NPA: The Appellant contended that the NPA classification should be taken from 22.12.2017, not 26.08.2016. The Tribunal rejected this argument, stating that the Corporate Debtor was in default for at least 90 days prior to 26.08.2016. The Tribunal referred to the case of 'Avantha Holdings Ltd.' but found it not applicable as it pertained to related party transactions. 3. Compliance with Sections 186 and 187 of the Companies Act, 2013: The Tribunal held that compliance with Sections 186 & 187 of the Companies Act, 2013, regarding the Agreements was of no significance in this case. The Tribunal focused on the financial health and obligations of the Corporate Debtor rather than the statutory compliance of the Guarantees. 4. Admissibility of Claims by the Appellant and Respondents 3 to 7 as Financial Creditors: The Tribunal found that the Guarantees were not reflected in the Financial Statements and were not produced before the Adjudicating Authority. The Tribunal emphasized that documents must be duly stamped in accordance with the Maharashtra Stamp Act, 1958, to be enforceable. The Tribunal found no evidence that the Guarantees were verified at New Delhi by the IRP/RP, as claimed by the Appellant. 5. Reconstitution of the Committee of Creditors (CoC): The Tribunal noted that the admission of the claims of the Appellant and other banks as Members of the CoC was undertaken by the erstwhile IRP. The Tribunal found no basis to sustain the Appellant's contention that the SBI Consortium should continue to be recognized as Financial Creditors, referencing the decision in 'Doha Bank & Ors. Vs. Anish Nanavaty & Anr.' which set aside the finding of the Adjudicating Authority and remanded the matter for derecognizing the relevant parties as Financial Creditors. 6. Approval of the Resolution Plan: The Tribunal acknowledged that the Resolution Plan was approved by the Adjudicating Authority and upheld by the Hon'ble Supreme Court. The Tribunal quoted the Supreme Court's observation that the plan was approved by a 100 percent voting share of the CoC, and the jurisdiction of the Adjudicating Authority was confined to determining compliance with Section 30(2) of the Code. The Tribunal concluded that the Appeal was devoid of merit and dismissed it. Conclusion: The Appeal was dismissed, with the Tribunal affirming the validity of the Resolution Plan approved by the CoC and upheld by the Supreme Court. The Tribunal found the Corporate Guarantees questionable, the classification of NPA justified, and the reconstitution of the CoC appropriate. The compliance with Sections 186 & 187 of the Companies Act was deemed irrelevant to the case.
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