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2023 (12) TMI 313 - AT - Insolvency and BankruptcySeeking that the amount which is still to be refunded to the investors need to be kept separate from the CIRP of the Corporate Debtor - Corporate Debtor is asset management company of the trust i.e. OAF and all inventories and assets of the OAF has been handed over to the Resolution Professional - HELD THAT - The Resolution Professional has directed for forensic audit which report has also been received and has been relied by the Resolution Professional. It is not shown as per the forensic report that the amount of Rs.30,86,62,832/- belonging to OAF lying with the Corporate Debtor or is reflected in the accounts of the Corporate Debtor, no material has been placed either before the Adjudicating Authority or before this Tribunal by the Appellant to show that the said amount is reflected in the books of the account of the Corporate Debtor which amount is claimed to be belonging to OAF. The Adjudicating Authority has returned the finding that no direct investment/deposit from OAF reflects in the books of the Corporate Debtor. In the appeal also, neither any foundation has been laid nor any material has been produced to indicate that the said finding is incorrect. Even though the Appellant has not filed its claim, the Resolution Professional has already pleaded that the Resolution Plan notices the amount to be refunded as per the SEBI s order dated 28.05.2021. The Resolution Plan also contains a clause for discharge of the liability of the SEBI. There shall be no question of extinguishment of the claim of the SEBI pursuant to the order dated 28.05.2021 on completion of the CIRP of the Corporate Debtor. The Resolution Plan envisaged for clearing such liability as per scheme envisaged in the Resolution Plan. Counsel for the Resolution Professional is right in his submission that during currency of moratorium which was imposed by order dated 19.12.2021, no recovery can be affected from the Resolution Professional of the Corporate Debtor as per SEBI s order dated 28.05.2021. Thus, no error has been committed by the Adjudicating Authority in rejecting IA No.3787 of 2022 filed by the Appellant - appeal dismissed.
Issues Involved:
1. Whether the amount of Rs. 30,86,62,832/- belonging to Osian Art Fund (OAF) should be kept separate from the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. 2. Whether the Resolution Professional (RP) is obliged to comply with the SEBI order dated 28.05.2021 during the CIRP. 3. Whether the assets of OAF form part of the assets of the Corporate Debtor. Summary: Issue 1: Separation of OAF Amount from CIRP The Appellant, SEBI, contended that the amount of Rs. 30,86,62,832/- collected from investors by the Corporate Debtor, acting as an asset management company for OAF, should be kept separate from the CIRP of the Corporate Debtor. The Adjudicating Authority held that the Resolution Plan deals only with the assets and liabilities of the Corporate Debtor and no direct investment/deposit from OAF reflects in the books of the Corporate Debtor. The Corporate Debtor and OAF are distinct entities with segregated assets, and the funds of OAF do not form part of the assets of the Corporate Debtor. The Tribunal found no material to indicate that the said amount is reflected in the books of the Corporate Debtor. Hence, the application to keep the amount separate was rightly rejected. Issue 2: Compliance with SEBI Order During CIRP SEBI argued that the RP must comply with the SEBI order dated 28.05.2021, which directed the Corporate Debtor to refund the amount to investors. The Adjudicating Authority noted that the SEBI order came into force on 01.07.2021, after the commencement of CIRP on 19.12.2021. The RP included the SEBI order in the information memorandum and the Resolution Plan, which contains a clause for the manner of compliance with the SEBI order. The Tribunal held that during the moratorium period under Section 14 of the IBC, no recovery can be affected from the RP as per the SEBI order. Therefore, the RP was not obliged to comply with the SEBI order during the CIRP. Issue 3: Inclusion of OAF Assets in Corporate Debtor's Assets The Appellant claimed that the assets of OAF should be considered part of the Corporate Debtor's assets. The RP and forensic audit confirmed that the monies under OAF do not form part of the assets of the Corporate Debtor and have not been recorded in the information memorandum. The Adjudicating Authority found that the Corporate Debtor was merely an asset manager for OAF and did not possess the trust property of OAF. The Tribunal upheld this view, stating that the assets of OAF are not part of the Corporate Debtor's assets. Conclusion: The Tribunal dismissed the appeal, affirming the Adjudicating Authority's decision to reject SEBI's application. The Tribunal found no error in the Adjudicating Authority's reasoning that the amount belonging to OAF does not form part of the Corporate Debtor's assets and that the RP is not required to comply with the SEBI order during the CIRP.
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