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TMI Blog2019 (7) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating Authority appointed by order of liquidation, Shri Kailash Kumar Rathi, as liquidator with certain directions. 2. By other order dated 23rd January, 2019, Mr. Kailash Kumar Rathi having shown his unwillingness to act as liquidator, one Mr. Chaitanya Kumar Ray has been appointed as liquidator. 3. Learned Counsel appearing on behalf of the Appellant submits that the Appellant is a 'Financial Creditor' and filed claim before the Interim Resolution Professional but the claim was not admitted. Allegations have been made against erstwhile Interim Resolution Professional on the ground that he had not followed the procedure which resulted in liquidation. However, in the absence of the individual Interim Resolution Professional, we are not inclined to make any observation. 4. Admittedly, the Appellant has not filed any application u/s 60(5) against decision of the Interim Resolution Professional that he had not admitted the claim. Therefore, at the stage of liquidation he cannot raise all these claims. 5. During the liquidation, the liquidator is required to verify all the claims of the Creditor in terms of Section 35(1)(a) of the Insolvency & Bankruptcy Code, 2016 ('I&B' Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern. [See ArcelorMittal (supra) at paragraph 83, footnote 3]. (Emphasis added) 12. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors. The interests of the corporate debtor have, therefore, been bifurcated and separated from that of its promoters /those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The moratorium imposed by Section 14 is in the interest of the corporate debtor itself, thereby preserving the assets of the corporate debtor during the resolution process. The timelines within which the resolution process is to take place again protects the corporate deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promise or arrangement is proposed- (a) between a company and its creditors or any class of them; or (b) between a company and its members or any class of them, the Tribunal may, on the application of the company or of any creditor or member of the company, or in the case of a company which is being wound up, of the liquidator appointed under this Act or under the Insolvency and Bankruptcy Code, 2016 as the case may be, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs. Explanation.- For the purposes of this sub-section, arrangement includes a reorganisation of the company's share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those methods. (2) The company or any other person, by whom an application is made under subsection (1), shall disclose to the by affidavit- (a) all material facts relating to the company, such as the latest financial position of the company, the latest auditor's report on the accounts of the company and the pendency o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... free of charge from the registered office of the company. (4) A notice under sub-section (3)shall provide that the persons to whom the notice is sent may vote in the meeting either themselves or through proxies or by postal ballot to the adoption of the compromise or arrangement within one month from the date of receipt of such notice: Provided that any objection to the compromise or arrangement shall be made only by persons holding not less than ten per cent. of the shareholding or having outstanding debt amounting to not less than five per cent. of the total outstanding debt as per the latest audited financial statement. (5) A notice under sub-section (3) along with all the documents in such form as may be prescribed shall also be sent to the Central Government, the income-tax authorities, the Reserve Bank of India, the Securities and Exchange Board, the Registrar, the respective stock exchanges, the Official Liquidator, the Competition Commission of India established under sub-section (1)of section 7 of the Competition Act, 2002, if necessary, and such other sectoral regulators or authorities which are likely to be affected by the compromise or arrangement and shall req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal shall be filed with the Registrar by the company within a period of thirty days of the receipt of the order. (9) The Tribunal may dispense with calling of a meeting of creditor or class of creditors where such creditors or class of creditors, having at least ninety per cent. value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement. (10) No compromise or arrangement in respect of any buy-back of securities under this section shall be sanctioned by the Tribunal unless such buy-back is in accordance with the provisions of section 68. (11) Any compromise or arrangement may include takeover offer made in such manner as may be prescribed: Provided that in case of listed companies, takeover offer shall be as per the regulations framed by the Securities and Exchange Board. (12) An aggrieved party may make an application to the Tribunal in the event of any grievances with respect to the takeover offer of companies other than listed companies in such manner as may be prescribed and the Tribunal may, on application, pass such order as it may deem fit. Explanation.-For the removal of doubts, it is hereby declared that the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal to pass appropriate order under Section 230 of the Companies Act, 2013. 17. Normally, the total period for liquidation is to be completed preferably within two years. Therefore, in "S.C. Sekaran v. Amit Gupta & Ors." (Supra), this Appellate Tribunal allowed 90 days' time to take steps under Section 230 of the Companies Act, 2013. In case, for any reason the liquidation process under Section 230 takes more time, it is open to the Adjudicating Authority (Tribunal) to extend the period if there is a chance of approval of arrangement of the scheme. 18. During proceeding under Section 230, if any, objection is raised, it is open to the Adjudicating Authority (National Company Law Tribunal) which has power to pass order under Section 230 to overrule the objections, if the arrangement and scheme is beneficial for revival of the 'Corporate Debtor' (Company). While passing such order, the Adjudicating Authority is to play dual role, one as the Adjudicating Authority in the matter of liquidation and other as a Tribunal for passing order under Section 230 of the Companies Act, 2013. As the liquidation so taken up under the 'I&B Code', the arrangement of scheme should be in co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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