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TMI Blog2018 (7) TMI 1855X X X X Extracts X X X X X X X X Extracts X X X X ..... d party’ in relation to Corporate Debtor as defined under Section 24. The Adjudicating Authority has failed to take into consideration the aforesaid facts and wrongly held that the appellant is a ‘related party’ in relation to the Corporate Debtor, we set aside the impugned order dated 16th November 2017. The Resolution Professional, the members of the ‘Committee of Creditors’ and the Adjudicating Authority are directed to treat the appellant as one of the member of the ‘Committee of Creditors’. We further direct to call for a meeting of the ‘Committee of Creditors’ after intimating the appellant and to consider the Resolution Plan in accordance with Section 30(4). The Resolution Plan, if earlier approved in absence of appellant – ‘financial creditor’, being illegal is to be ignored. The appellant will take part in the meeting of the ‘Committee of Creditors’ but will not raise unnecessarily any objection, if resolution plan already approved by the ‘Committee of Creditors’. For the purpose of counting the total period of ‘corporate insolvency resolution process’, the period of pendency of the appeal i.e. from 11th December 2017 till the date of this judgement be excluded. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing more than 20% share with related party. In his affidavit the Resolution Professional has taken following plea:- 7. That as per the records of the Corporate Debtor, a meeting of Preferential Issue Committee was held on 8th September, 2014. In the said meeting, 6,60,37,735 equity shares of the Corporate Debtor were issued and allotted to SREI Infrastructure Limited (Appellant) for an amount of ₹ 3.18 per equity share. A copy of extract of resolution passed in the meeting of Preferential Issue Committee held on 8th September 2014 is annexed herewith and marked as Annexure-A4 . 8. That as per records of Corporate Debtor and also available on MCA Portal, e-form PAS-3 (i.e. Return of allotment) was filed with the Registrar of Companies following are the details of said the allotment: Date of allotment 08/09/2014 Number of securities allotted 66,037,735 Nominal amount per security (in Rs.) 2.00 Total nominal amount (in Rs.) 132,075,470.00 Amount to be treated as paid up (in Rs.) 2.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd meeting of preferential issue committee dated 8th September 2014, DCHL has issued and allotted 6,60,37,735 equity shares of ₹ 2 each at a premium of ₹ 1.18 per share to SREI Infrastructure Finance Limited. Also, it was stated in the intimation letter that the allotment is subject to the provisions of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009, Listing Agreement signed with the Bombay Stock Exchange, National Stock Exchange of India Limited, guideless issued by Reserve Bank of India and other applicable laws. 5. Section 5(24) defines related party in relation to a Corporate Debtor, which reads as follows: - 24. related party , in relation to a corporate debtor, means- (a) a director or partner of the corporate debtor or a relative of a director or partner of the corporate debtor; (b) a key managerial personnel of the corporate debtor or a relative of a key managerial personnel of the corporate debtor; (c) a limited liability partnership or a partnership firm in which a director, partner, or manager of the corporate debtor or his relative is a partner; (d) a private company in which a dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant referred to this plea taken by Resolution Professional and the enclosures attached which is affidavit including the Balance Sheet of the Deccan Chronicle Holdings Limited as at 18th July 2017 (Annexure A-14) and as at 31st March 2016 (at page 165 and 166), both which reads as follows:- 8. From the note below the Balance Sheet as on 31st March 2016, para 3(d) which is clear as part of conversion of debt into equity, 6,60,37,735 Nos. of equity shares were allotted during which necessary forms have been also filed with the Registrar of Companies. However, allotment of equity shares was not recognized/accounted in the books of accounts since the allotment of shares was not approved by the stock exchange by stating that allotment was not as per guidelines prescribed by the stock exchange. Such note has been reiterated in the Balance Sheet as on 31st March 2017 and the Balance Sheet as on 18th July 2017. 9. The Balance Sheet has been produced by the Resolution Professional but we find that he has failed to notice the note below the Balance Sheet which was not recognised as allotment of equity shares in favour of the appellant. 10. Neither the Resol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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