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TMI Blog2019 (7) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... ARI Technical Member For Appellant: Mr. Santosh Paul, Senior Advocate with Mr. Vikranth Yadav and Mr. Subhranshu Dash, Advocates. For Respondents: None ORDER The Appellant, Promoter of M/s BKR Hotels Resorts Pvt. Ltd. (Corporate Debtor) has preferred this Appeal challenging the order dated 3rd May, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai, whereby, order of liquidation has been passed under Section 33 of the Insolvency and Bankruptcy Code, 2016 (I B Code) and the Liquidator has been appointed and directed to perform in accordance with the provisions of the Code. 2. Learned Counsel appearing on behalf of the Appellant submits that the Corporate Debtor (M/s BKR Hotels Resorts Pvt. Ltd.) can be saved from liquidation if a Plan, which is with the Promoter is accepted. However, we are not inclined to make any observation with regard to such Plan as it is admitted that more than 270 days have passed and in absence of any viable and feasible Resolution Plan , there was no option to the Adjudicating Authority, but to pass an order under Section 33. However, this Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place again protects the corporate debtor s assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends. In Arcelormittal India Pvt. Ltd. vs. Satish Kumar Gupta Ors. at paragraph 83, footnote 3 is mentioned. The Hon ble Supreme Court noticed that : 3. Regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, states that the liquidator may also sell the corporate debtor as a going concern. 6. In Meghal Homes Pvt. Ltd. vs. Shree Niwas Girni K.K. Samiti Ors. (2007) 7 SCC 753 the Hon ble Supreme Court observed and held as follows: 33. The argument that Section 391 would not apply to a company which has already been ordered to be wound up, cannot be accepted in view of the language of Section 391(1) of the Act, which speaks of a company which is being wound up. If we substitute the definition in Section 390(a) of the Act, this would mean a company liable to be wound up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 of any investigation or proceedings against the company; (b) reduction of share capital of the company, if any, included in the compromise or arrangement; (c) any scheme of corporate debt restructuring consented to by not less than seventy-five per cent. of the secured creditors in value, including- (i) a creditor s responsibility statement in the prescribed form; (ii) safeguards for the protection of other secured and unsecured creditors; (iii) report by the auditor that the fund requirements of the company after the corporate debt restructuring as approved shall conform to the liquidity test based upon the estimates provided to them by the Board; (iv) where the company proposes to adopt the corporate debt restructuring guidelines specified by the Reserve Bank of India, a statement to that effect; and (v) a valuation report in respect of the shares and the property and all assets, tangible and intangible, movable and immovable, of the company by a registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 require that representations, if any, to be made by them shall be made within a period of thirty days from the date of receipt of such notice, failing which, it shall be presumed that they have no representations to make on the proposals. (6) Where, at a meeting held in pursuance of sub-section (1), majority of persons representing three-fourths in value of the creditors, or class of creditors or members or class of members, as the case may be, voting in person or by proxy or by postal ballot, agree to any compromise or arrangement and if such compromise or arrangement is sanctioned by the Tribunal by an order, the same shall be binding on the company, all the creditors, or class of creditors or members or class of members, as the case may be, or, in case of a company being wound up, on the liquidator appointed under this Act or under the Insolvency and Bankruptcy Code, 2016, as the case may be, and the contributories of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of section 66 shall not apply to the reduction of share capital effected in pursuance of the order of the Tribunal under this section. 8. In view of the provision of Section 230 and the decision of the Hon ble Supreme Court in Meghal Homes Pvt. Ltd. and Swiss Ribbons Pvt. Ltd. , we direct the Liquidator to proceed in accordance with law. He will verify claims of all the creditors; take into custody and control of all the assets, property, effects and actionable claims of the corporate debtor , carry on the business of the corporate debtor for its beneficial liquidation etc. as prescribed under Section 35 of the I B Code. The Liquidator will access information under Section 33 and will consolidate the claim under Section 38 and after verification of claim in terms of Section 39 will either admit or reject the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 consonance with the statement and object of the I B Code . Meaning thereby, the scheme must ensure maximisation of the assets of the Corporate Debtor and balance the stakeholders such as, the Financial Creditors , Operational Creditors , Secured Creditors and Unsecured Creditors without any discrimination. Before approval of an arrangement or Scheme, the Adjudicating Authority (National Company Law Tribunal) should follow the same principle and should allow the Liquidator to constitute a Committee of Creditors for its opinion to find out whether the arrangement of Scheme is viable, feasible and having appropriate financial matrix. It will be open for the Adjudicating Authority as a Tribunal to approve the arrangement or Scheme in spite of some irre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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