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2021 (9) TMI 1028 - Tri - Insolvency and BankruptcyLegality of action of the RP in including the claim under an expired bank guarantee by the financial creditor - seeking to declare that the claim of the financial creditor under the bank guarantee which is the subject matter of dispute pending, as inadmissible - seeking to declare the entire meeting conducted by the Committee of Creditors - validity of meetings conducted by the Resolution Professional - discharge of dues under the term loan - seeking to recall the order of liquidation - seeking release of refund of excess tax remitted - HELD THAT - The Corporate Insolvency Resolution Process stood completed by the decision of CoC to liquidate the Corporate Debtor and the liquidation is in progress. Liquidator was promptly filing the progress reports in the Liquidation process before this Tribunal. At this stage, the applicant cannot turn around and question the process adopted by the IRP/RP or the Liquidator. From the verification of the earlier proceedings of this matter, it is seen that the Suspended Directors are not at all co-operating in the CIR Process and they were only on the lookout of creating hurdle to the continuation of CIR Process. Moreover, the applicant herein is a shareholder of the Company and as rightly pointed out by the Respondent No.2 he is not entitled to claim any relief against the CoC or the conduct of the CIRP. Without attending the meeting conducted by the IRP/RP, they are making bald allegations against the conduct of the CoC meetings. Their challenge to the order of admission of the application before the Hon ble NCLAT and the appeal against the order before the Hon ble Supreme Court was failed. Application dismissed.
Issues Involved:
1. Amendment of application MA/207/KOB/2020. 2. Inclusion of claim under an expired bank guarantee. 3. Validity of the Committee of Creditors (CoC) meetings. 4. Admission of claims by the Interim Resolution Professional (IRP). 5. Decision to liquidate the Corporate Debtor. 6. Rights of a shareholder in the CIRP process. Issue-wise Detailed Analysis: 1. Amendment of application MA/207/KOB/2020: The applicant filed IA (IBC) 101/KOB/2021 to amend MA/207/KOB/2020. The Tribunal noted that the amendment was sought at a belated stage, intending to introduce new facts which would alter the character of the original application. Given that the pleadings were complete and the matter was ripe for hearing, the Tribunal dismissed the amendment application to avoid delays in the liquidation proceedings. 2. Inclusion of claim under an expired bank guarantee: The applicant sought to declare the inclusion of a claim under an expired bank guarantee by the financial creditor as illegal. The Tribunal reviewed the procedural history, noting that the Hon’ble NCLAT and the Supreme Court had already dismissed appeals challenging the initial admission of the application under Section 7 of the IBC. The Tribunal held that the claim under the bank guarantee was not time-barred as per the NCLAT's findings and thus could not be set aside. 3. Validity of the Committee of Creditors (CoC) meetings: The applicant challenged the validity of the CoC meetings on several grounds, including unauthorized representation and improper admission of claims. The Tribunal found that the applicant, as a shareholder, was not privy to CoC meetings and that the CoC meetings were conducted in compliance with the IBC and its regulations. The Tribunal dismissed the allegations of irregularities, noting that the applicant failed to attend the meetings and that the CoC's decisions were based on valid resolutions. 4. Admission of claims by the Interim Resolution Professional (IRP): The applicant contended that the IRP admitted fraudulent claims and included interest amounts illegally. The Tribunal observed that the IRP acted within the scope of his authority and based on the information available. The IRP's admission of claims, including interest, was found to be in accordance with the IBC and its regulations. The Tribunal dismissed the applicant's contentions as baseless. 5. Decision to liquidate the Corporate Debtor: The CoC, with a majority vote, resolved to liquidate the Corporate Debtor due to various reasons, including the lack of necessary approvals and the non-viability of the project. The Tribunal upheld the CoC's decision, noting that the wisdom of the CoC in deciding to liquidate is not subject to adjudication by the NCLT. The liquidation process was found to be in progress, with the Liquidator filing regular progress reports. 6. Rights of a shareholder in the CIRP process: The Tribunal reiterated that a shareholder does not have the right to challenge the proceedings of the CoC or the conduct of the CIRP. The applicant, being a shareholder, was not entitled to any relief against the CoC or the CIRP. The Tribunal emphasized that the applicant's repeated challenges to the process were without merit and dismissed the application with costs. Conclusion: The Tribunal dismissed the application MA/207/KOB/2020 with costs of ?25,000 to be paid to the Liquidator within two weeks. The Tribunal directed the Registry to communicate the order to the applicant and respondents urgently. The decision was dated 20th September 2021.
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