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TMI Blog2021 (4) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... vency and Bankruptcy Code and in view of law laid down by the Hon'ble Apex Court. (b) To direct the Resolution Professional to call the Suspended Management in Committee of Creditors (CoC) meeting after giving the Agenda and to supply/provide the copy of Resolution Plan issued by the RP before taking any decisions of the Resolution Plan whether being accepted or not. (c) During the pendency of this I.A., (i) Restrain the RP from acting on the Resolution Plans (ii) Stay further proceeding of the Resolution process. (d) Pass such other and further orders as this Hon'ble Tribunal may deem just and proper. 3. The matter was listed on 02.12.2019 before a Bench comprising of Learned Mr. Harihar Prakash Chaturvedi Member (Judicial) and Learned Mr. Prasanta Mohanty Member (Technical) after hearing the parties, vide order dated 02.12.2019 the Member (J) is of the opinion that the suspended management is to be given time for taking up the matter with CBI/Investigating Officer (I.O.) for their participation in CoC meetings.Member (T) differ from the opinion of member (J) and he is of the opinion that the prayer made by the suspended management in I.A No. 701 of 2019 in CP (IB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing of the order dated 20.09.2019 was given to the Appellant. This was in direct contravention of the Judgment of Hon'ble Supreme Court in the Case of Vijay Kumar Jain Vs. Standard Chartered Bank and Ors. (2019) 20 SCC 455. 6. Ld. Counsel for the Appellant further submitted that it is undisputed fact that copies of the Resolution Plans were never provided to the Appellant. This was despite the fact that the Appellant specifically requested for the documents vide email dated 30.10.2019. 7. It is pointed out that there is a proviso to Section 24 (4) of the I&B Code providing inter alia that absence of any member of the suspended board of directors would not invalidate proceeding of a CoC meeting, there is no such proviso to Section 24(3) of the I&B Code requiring notice of each meeting to be given inter alia to such persons. It means in the absence of such notice having been given, the meeting itself would not be valid. 8. The Respondent (RP) has admitted in his Reply that the physical meeting took place at Ahmadabad, while the Appellant had been restrained from leaving Vadodara. As such the Respondent was clearly aware that in the absence of video conference link the Appellant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm clarity on the same is received from his legal team and the CBI. This demonstrates that the RP was cooperating with the suspended management at every level. The CIRP could not be postponed as per the convenience of the suspended management. It is the responsibility of the Respondent to compete the CIRP in a time bound manner. In the present case, the upper limit of 330 days was already breached and further delayed in completion of CIRP would serve as going against the mandate of law. The Resolution Plans were duly discussed and considered by the CoC members and after due deliberation the members of the CoC have rejected both the plans with overwhelming majority of 96.94 % and approved the liquidation of the Corporate Debtor by a majority of 82.48 %. The Respondent is bound by the decision of the CoC and cannot question the rationality of the decision taken by the CoC. The impugned order is well reasoned, therefore, the present Appeal deserves to be dismissed. 13. After hearing Ld. Counsel for the parties, we have minutely examined the record. 14. In this Appeal, following issues arose for our consideration: (i) Whether the RP has given notice of each meetings of the CoC to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the official communication from the RP, the Applicant shall be permitted to attend the same. The I.O shall be at liberty to depute one of his officers of his confidence at the time of such me e ting." 7. The confusion with regard to the attendance of both brothers in the Committee of Creditors meeting/proceedings as may be scheduled by RP, in wake of this additional condition (F1) should not continue. 8. it is being clarified by ld. Special Public Prosecutor Mr. Kodekar on instructions received from the Investigating Officer of the CBI present before this Court that there is no objection with regard to both these brothers attending the Committee of Creditors meeting/proceedings as may be scheduled by the RP in relation to the proceedings which have been undertaken before the NCLT in the Insolvency Application being CP(IB) NO. 137/NCLT/AHM/2018. 9. The Application is allowed it is being clarified that in wake of condition (F1) and also since the Investigating Officer, CBI is to be intimated of the proceedings at every stage as undertaken by the RP, the Participation of both the brothers Mr. Amit Bhatnagar and Mr. Sumit Bhatnagar as may be required under the law shall cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, that such plan provides for the repayment of the debts of operational creditors which shall not be less than the amount to be paid to them in the event of liquidation of the corporate debtor. This plan is then submitted to the Adjudicating Authority if it is approved by the requisite majority of the committee of creditors. The Adjudicating Authority under Section 31(1), if satisfied that the plan passes muster, shall then, by order, approve such plan, which shall be binding on all stakeholders involved in the resolution plan, including guarantors. 16. This statutory scheme, therefore, makes it clear that though the erstwhile Board of Directors are not members of the committee of creditors, yet, they have a right to participate in each and every meeting held by the committee of creditors, and also have a right to discuss along with members of the committee of creditors all resolution plans that are presented at such meetings under Section25(2)(i)...................................................... .................................................................................... ......................" 19. Hon'ble Supreme Court he ld that under Section 24 of the I&B Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... link which he has promised to provide, we are yet to receive the coordinates. We can go to pwc Ahmadabad office to attend the meeting vide video Regards Amit Bhatnagar Third email. Date Tue, 05.11.2019 at 07: 26 Dear Sir This refers to your invitation to attend meeting & our subsequent call seeking copies of resolution plans, we were advised that copies cannot be provided to us, we draw your attention to legal opinion of DSK legal attached with the agenda which clearly states in view of Section 25(2) of the IBC copies of plan have to be provided to us as have been provided to creditors. Kindly provide to us copies of plan urgently We also await link for attendance video link Amit Bhatnagar" 24. RP Replied as under:- "Date Tue, 05.11.2019, 10:45 Dear Sir, VC Link cannot be shared till we get a firm clarity of same from our legal and CBI Regards Bhuwan Madan" 25. The Appellant in his first email dated 04.11.2019 at 18:07 pointed out that the notice given to the Appellant is extraordinarily short i.e. less than 24 hours' notice . Regulation 19 of IBBI Regulations provides that: "A meeting of CoC shall be called by giving not less than five days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue s. The expression "documents" is a wide expression which would certainly include resolution plans." 29. Admittedly, the RP has not provided the copy of Resolution Plans to the Appellant. Thus, he has contravened the mandatory provision provided in Regulation 21(3) (iii) of the IBBI Regulations. 30. It is pertinent to note that the 11th CoC meeting convened on 08.11.2019 at 03:00 PM and notice of that meeting was sent to the Appellant on 07.11.2019 at 08:15 PM i.e. less than 24 hours' notice was served, which is against the Regulation 19 of IBBI Regulations. 31. Ld. Counsel for the Respondent (RP) unable to convince us as to why the RP has not provided the copy of Resolution Plans, not served the notice for 9th CoC meeting and has given less than 24 hours' notice for 10th, 11th CoC meeting and as to why refused to provide link of VC to Appellant for 10th CoC meeting. The RP has not furnished any explanation as to why notice has not been served on the other ex-director i.e. Sumit Suresh Bhatnagar, thus, the RP has contravened the mandatory provisions provided in Section 24 (3) (b) of the I&BCode and Regulations 19 (1), 21(3)(iii) and 23 of the IBBI Regulations. 32. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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