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TMI Blog2019 (2) TMI 1672X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Financial Creditors having voting share of 59.21% . The Scrutinizer report is filed, it shows Resolution No. 7 is approved by Financial Creditors having 59.21% voting share. Similarly Resolution No.4 also does not fall in any of the categories mentioned in sec 28(1). Therefore it needs for approval by Financial Creditors having 51% of voting share. This resolution was also approved by Financial Creditors having the voting share of 59.21%. Therefore two resolutions shall be declared to have been passed by requisite voting share of the Financial Creditors. The application is allowed declaring that Resolution No.4 7 of 5th COC are declared to have been passed by a requisite voting share of Financial Creditors of COC. - IA No. 344 of 2018 in CP (1B) No. 219/7/HDB/2018 - - - Dated:- 26-2-2019 - IA No. 239, 240, 294, 342, 343, 344, 376, 377, 484, 485, 489, 514, 515, 516, 666, 667, 670, 696 697/2018 and IA No. 139, 140,141/2019 in CP No.219/7/HDB/2017 Hon'ble Shri Ratakonda Murali, Member (Judicial) Parties / Counsels Present: For the Applicant : Ms.P.V.Aruna Kumari, Mr.Shabbeer Ahmed, Kochhar Co, Advocates. For Respondent No: Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount as advance received to the tune of ₹ 134.65 Crores in the latest balance sheet etc. However, RP continuously tried to convince the COC members to avoid a Forensic Audit citing frivolous reasons. All these issues were once again brought for discussion in the 5th COC meeting. In the said meeting, majority of COC members have resolved for conducting the forensic audit of the Corporate Debtor. In view of the same, the RP has stated that several items of the discussions/ resolutions of COC including the resolution pertaining to conduct of forensic audit will be put up for e- voting on 19.07.2018 and the voting lines will be open till 2.00 pm on 20.07.2018. 4. It is averred that as per Section 21 (8) of the IBC, 2016 (as amended by the ordinance), save as otherwise provided ir the code, all decisions of the COC shall be taken by vote oi not less than 51% of voting share of the financial creditors. Further, Section 28(3) of the IBC, 2016 (as amended by the ordinance) stipulates that for the matters provided under Section 28(1), the COC shall take decision by a vote of 66% of the voting shares. It is to be noted that none of the items or resolutions put for voting are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Debtor. Due to such actions of RP, few of the potential resolution applicants have actually backed out from submitting their bids/ plans believing the incorrect/ inadequate information submitted by RP to be true. Such actions of RP are severely impacting the valuation/ value of the assets of the Corporate Debtor which would result in a situation of COC receiving plans with least value. Though it was agreed in 5th COC meeting that any information on VDR will be uploaded by Process advisor only after consulting the RP, the RP is not cooperating with the process advisor and creating many stumble blocks in smooth functioning of VDR. If VDR is not managed and controlled in an efficient manner, then it is very difficult for the Resolution Applicants to form an informed decision about the affairs of the Corporate Debtor for enabling them to formulate their resolution plans. 8. The Respondents No. 1 filed Counter/ Reply and averments in brief: a. It is stated that several measures for successful completion of CIRP has taken place but the Petitioner is creating hurdles, whereas all the other stake holders in CIRP are cooperating with the process and not objecting for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers including the Petitioner and also the process adviser on 28.06.2018. The Petitioner herein is the Financial Creditor and also one of the Resolution Applicant who proposed the name of IMAP for the process Advisor (M/S. IMAP India Ltd.). For the due continuation of CIRP the RP has advised the process Adviser IMAP to attach Forum- G for the information of all the Resolution Applicant which was not done with a reason that the Form G was not approved by COC lenders vide email dated 30.06.2018 and not assisted the RP in uploading the Form G in VDR which shows, the attitude of the Process Advisor IMAP in creating hurdles to RP for smooth functioning of CIRP. It is not true that RP is not cooperating with the process Advisor and creating many stumble blocks in smooth functioning of VDR. In fact it is the other way round and IMAP is not following instructions given by RP acting in connivance with Petitioner. g. It is stated that upon the reading of provisions of Section 28 of the code in the case of audit etc requisite mandate of 66% voting share is required and hence the Resolution No. 7 was decided to be disapproved. Similar in Resolution No. 4 it is stated that RP has no ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51% of the voting share of Financial Creditors is sufficient for approval. 14. Counsel contended as per scrutinizers report Resolution No 4 is approved by members of COC with 59.21 % of voting share and Resolution No. 7 is also approved by members of COC with 59.21%. of voting share. Therefore Tribunal to declare that these resolutions are to have been passed or approved by COC. On the other hand Counsel for Resolution Professional would contend that Resolutions No. 4 7 of 5th COC meeting are not approved by a requisite voting share of the Financial Creditors. These Resolutions are to be voted by Financial Creditors having voting share of 66% and therefore they are not approved by Financial Creditor with 66% of voting share. 15. Counsel for Resolution Professional would contend Resolutions do come under provisions of Section 21(8) of the code. Counsel contended Resolution Professional also obtained legal opinion that these two resolutions require approval of Financial Creditors having 66% of voting share. The question whether Resolution No. 4 7 of 5th COC meeting require to be approved by Financial Creditors having 66 % voting share and not 51% of voting share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was considered by COC is for conducting of forensic audit of corporate debtor. This resolution is not for making the changes in the appointment/ terms of contract of statutory auditors or internal auditors of corporate debtor. Resolution No. 7 is for taking steps for conducting forensic audit of the accounts of corporate debtor. Resolution No. 7 does not fall with in Sec 28(1)(m) of the code. If it does not fall under any of the provisions of Section 28 of the code then for its approval it needs to be approved by a voting of not less than 51% of Financial Creditors. There is no dispute Resolution N07 of 5th COC was approved by Financial Creditors having voting share of 59.21% . 20. The Scrutinizer report is filed, it shows Resolution No. 7 is approved by Financial Creditors having 59.21% voting share. Similarly Resolution No.4 also does not fall in any of the categories mentioned in sec 28(1). Therefore it needs for approval by Financial Creditors having 51% of voting share. This resolution was also approved by Financial Creditors having the voting share of 59.21%. Therefore two resolutions shall be declared to have been passed by requisite voting share of the Financi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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