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TMI Blog2019 (1) TMI 1741X X X X Extracts X X X X X X X X Extracts X X X X ..... was not permissible because it is a settled legal position that once the petition is admitted, it becomes remedy in rem not in personem under the scheme of the Code and it was not made open even for the applicant/financial creditor to seek withdrawal of the CIRP on the pretext of subsequent settlement arrived at in the matter. To consider and examine the scope of settlement within the purview of section 60(5) of the IB Code would not be proper when the specific provisions for settlement of debts under section 12A have already been incorporated in the Code and if such an application for settlement is considered under the provisions of section 60(5) of the IB Code, it may amount to deviation from the expressed statutory provisions because it is a settled legal position that if a particular thing is not allowed to do directly, it cannot be done indirectly. Application not found maintainable within the ambit and scope of section 12A and section 60(5) of the IB Code and, hence, it is rejected on this limited ground that it is not maintainable before this Adjudicating Authority - application dismissed. - I. A. No. 430 /NCLT/AHM/ 2018 in C. P. (IB) Nos. 39 and 40 /7/NCLT/AHM/ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hdrawn and concluded under the provisions of the Insolvency and Bankruptcy Code, 2016 (the IB Code for short). 2. The present applicants claim to be majority shareholder of the corporate debtor company, having possessed of around 70 per cent. of the share-holding. Applicant No. 1 is a holding company of the present corporate debtor. They have raised certain questions of law and facts for consideration of this Adjudicating Authority, which are narrated in detail in paragraph III of the present application. The applicants have also raised a question making alternate plea that in case the settlement proposal made by the applicants is not accepted by the CoC, the right of the shareholders on principle of redemption of debt under the provisions of the Transfer of Property Act, 1881 to pay the amount agreed to be accepted by the CoC in order to discharge the liability of the corporate debtor in their books and accounts cannot be taken away under the provisions of section 91 of the TP Act. Thus, the present CIRP against the corporate-debtor ought to have been terminated by the CoC and RP by accepting such offer of settlement. The applicant also made a plea that their case needs to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before this Adjudicating Authority after the hon'ble Supreme Court's decision dated October 4, 2018 in the case of Arcelor-Mittal India P. Ltd. v. Satish Kumar Gupta [2018] 211 Comp Cas 369 (SC) ; [2018] SCC Online SC 1733, as the hon'ble Supreme Court has already dealt with and decided the major issue involved in respect of the main petitions, i. e., C. P. (IB) Nos. 39 and 40 of 2017 and it was pleased to observe and hold that : ordinarily these appeals would have been disposed of by merely declaring both the resolution applicants to ineligible under section 29A(c) of the IB Code, but on the request of learned counsel for the CoC (Shri Subramanium), gave one more opportunity to the parties before the hon'ble Supreme Court to pay off their corporate debtors debts in accordance with section 29A of the IB Code, so that the best resolution plan can be selected by the requisite majority of the CoC and all dues could be cleared as soon as possible. Acceding to such a request, in order to do complete justice under article 142 of the Constitution of India and also for the reason that the law on section 29A has been laid down for the first time by this judgment, the hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... honourable Supreme Court granted one more opportunity to resolution applicants to pay off their debts and make bid at the request of learned counsel for the CoC. The honourable Supreme Court was pleased to make it clear that if no valid resolution plan is found, then the corporate debtor shall go into liquidation. Hence, in our view, if the RP and CoC are willing to consider such settlement plan, then they are legally expected to apprise of such development in the matter to the honourable Supreme Court and seek appropriate directions, so that the honourable Supreme Court might be pleased to issue further directions in the matter. Therefore, we, being Adjudicating Authority, are equally bound by the above stated direction of the honourable apex court. Keeping in view of the above stated direction of the honourable Supreme Court to do complete justice under article 142 of the Constitution of India, it is not open to this Adjudicating Authority to dilute or modify the same. Hence, we are required to examine the scope of entertaining the present application and its maintainability within the ambit and scope of section 60(5) of the IB Code. Moreover, it is a matter of record that the ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the matter. Therefore, as a special case, depending on the facts and circumstances of the case, the honourable Supreme Court was pleased to allow the settlement by closing the CIRP in order to do complete justice in exercise of its extraordinary powers conferred under article 142 of the Constitution of India thus it is not open to an Adjudicating Authority to exercise its inherent powers as prescribed under rule 11 of the National Company Law Tribunal Rules, 2016. Therefore, to consider and examine the scope of settlement within the purview of section 60(5) of the IB Code would not be proper when the specific provisions for settlement of debts under section 12A have already been incorporated in the Code and if such an application for settlement is considered under the provisions of section 60(5) of the IB Code, it may amount to deviation from the expressed statutory provisions because it is a settled legal position that if a particular thing is not allowed to do directly, it cannot be done indirectly. 7. It is a matter of record that the present application is filed by Essar Steel Asia Holdings Ltd., and others claiming to be shareholders of the corporate debtor company. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application made by the applicant with the approval of ninety per cent. voting share of the committee of creditors, in such manner as may be specified. The ILC Report of March 2018, which led to the insertion of section 2A, stated as follows : '29.1 Under rule 8 of the CIRP Rules, the National Company Law Tribunal may permit withdrawal of the application on a request by the applicant before its admission. However, there is no provision in the Code or the CIRP Rules in relation to permissibility of withdrawal post admission of a CIRP application. It was observed by the committee that there have been instances where on account of settlement between the applicant creditor and the corporate debtor, judicial per mission for withdrawal of CIRP was granted Lokhandwala Kataria Construction P. Ltd v. Ninus Finance and Investment Manager LLP, Civil Appeal No. 9279 of 2017 ; Mothers Pride Dairy India P. Ltd. v. Portrait Advertising and Marketing P. Ltd., Civil Appeal No. 9286 of 2017 ; Uttara Foods and Feeds P. Ltd. v. Mona Pharmacem, Civil appeal No. 18520 of 2017. This practice was deliberated in light of the objective of the Code as encapsulated in the BLRC Report, that the desig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) The application in sub-regulation (1) shall be accompanied by a bank guarantee towards estimated cost incurred for purposes of clauses (c) and (d) of regulation 31 till the date of application. (3) The committee shall consider the application made under sub-regulation (1) within seven days of its constitution or seven days of receipt of the application, whichever is later. (4) Where the application is approved by the committee with ninety percent voting share, the resolution professional shall submit the application under sub-regulation (1) to the Adjudicating Authority on behalf of the applicant, within three days of such approval. (5) The Adjudicating Authority may, by order, approve the application submitted under sub-regulation (4)'. Thus, the honourable Supreme Court upheld its constitutional validity. Hence, in our humble view, it is the wisdom of the Legislature which took a conscious decision by making a specific provision for settlement under section 12A with the voting of 90 per cent. members of the committee of creditors for allowing such withdrawal by stipulating that such an application to be moved by the main applicant, i. e., financial/operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve as under : From the record we find that the matter was finally decided by the hon'ble Supreme Court in ArcelorMittal India P. Ltd. v. Satish Kumar Gupta [2018] 211 Comp Cas 369 (SC) ; [2018] SCC Online SC 1733, Civil Appeals Nos. 9402-9405 of 2018 by its judgment dated October 4, 2018. 2. It is informed that the 'committee of creditors' thereafter passed order in terms of sub-section (4) of section 30 of the Insolvency and Bankruptcy Code, 2016 and the resolution professional placed the matter before the Adjudicating Authority (National Company Law Tribunal) on October 26, 2018 for passing order in terms of section 31 of the 'I and B Code'. It is not clear as to why after the decision of the hon'ble Supreme Court and the approval of the 'committee of cre ditors' and placement of 'resolution plan', the Adjudicating Authority, Ahmedabad Bench, has adjourned the matter twice. 3. It is informed that the matter is likely to be listed on January 7, 2019, therefore, we are not making any observation with regard to non-disposal of the matter on an early date in spite of the judgment of the hon'ble Supreme Court. We hope and trust tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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