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TMI Blog2019 (3) TMI 1901X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court against the corporate debtor and before this authority is not inconsistent at all. In the High Court, SBI opposed winding up proposal and here in this case, SBI requested this authority to have a resolution of insolvency of the corporate debtor as a first instance and if not the consequences of liquidation may follow - Hon ble High Court admitted winding up petition against the corporate debtor, this authority can proceed with hearing of this application and admit the corporate debtor in CIRP. Whether this authority having held in daily proceeding order dated 02.08.2017 in CP No.95/KB/2017 that it is not proper on the part of this authority to pass any order against the corporate debtor in CIRP under IBC as it may amount to interference of jurisdiction of Hon ble High Court. Whether this authority can still consider this application filed by SBI under section 7 of IBC? - HELD THAT:- It is to be made clear that the order dated 02.08.2017 was passed in daily proceeding under rule 92 of NCLT rules, 2016. By that order, this authority simply adjourned that matter to next date. It is not a final order passed in the proceeding. Moreover, that order was passed way back on 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 1. Mr. Swatarup Banerjee, Advocate ] 2. Mr. Avishek Guha, Advocate ] 3. Mr. S. Dasgupta, Advocate ] 4. Mr. Sk. Safirul Haque, Advocate ] 5. Mr. Sk. Shahrukh Raja, Advocate For the Corporate Debtor 1. Mr. Debanjan Mukherjee, Advocate] 2. Ms. Suchita Sharma, Advocate ] For 26 workers 1. Mr. Krishnendu Bhattacharjee ] 2. Ms.Amrita Panja Moulick] For 9 workers ORDER State Bank of India - the Financial Creditor filed this application under section 7 of the Insolvency Bankruptcy Code, 2016 (in short, 1 B Code) against M/s. Tantia Constructions Limited - the Corporate Debtor to start Corporate Insolvency Resolution Process (in short, CIRP ) of the Corporate Debtor as the Corporate Debtor committed default in paying the financial debt of ₹ 213,90,70,549/-. 2. The following facts are not in dispute. 2.1 The bank guaranted and disbursed the loan in form of various cash credit facilities to the corporate debtor. Such loan and credit facilities were revived and extended from time to time. The credit facilities were lastly extended on 30.03.2016. The corporate debtor committed default in paying the loan. Various creditors of the corporate debtor have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... davit-in-reply. They also filed CA(IB) No.243/KB/18 challenging the maintainibility of this proceeding under section 7 of IBC on the ground that the Hon ble High Court already admitted winding up petition against the corporate debtor. That proceeding got the character of representative suit. Now this authority cannot proceed with this application. 4. Corporate Debtor also contended that this authority by order dated 02.08.2017 already held that since the Hon ble High Court is dealing with the matter of winding up, it would not be proper to pass order of admission of the CIRP of the Corporate Debtor under the provisions of Insolvency Bankruptcy Code, as it will be amounting to interference of jurisdiction of the Hon ble High Court, Calcutta. That order is not challenged by the State Bank of India or any other creditor. Now this authority cannot admit the corporate debtor in the CIRP because this authority cannot sit in appeal against its own order passed above. 5. The Corporate Debtor pointed out that SBI did not disclose in the application under section 7 of IBC the particulars of pendency of winding up proceeding against the corporate debtor. They suppressed the material f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsider this application filed by SBI under section 7 of IBC? PointNo.3 = - State Bank of India did not disclose pendency of winding up petition against the corporate debtor and the order of this authority dated 02.08.2017 in CP No.95/KB/2017. Whether it is amounting to suppression of material fact and playing fraud on this authority? My answers to point nos. 1 and 2 are in the affirmative and point no.3 is in the negative. Reasons: Point No.1: (a) The core controversy as appears from the pleadings of the parties is that the Hon ble High Court having admitted the winding up petition against the corporate debtor whether this authority can proceed with this application under section 7 of IBC? (b) Ld. Counsel, Mr. Banerjee for the Corporate Debtor submitted that this authority cannot proceed with the hearing of this application because the winding up petition is already admitted against the corporate debtor by the Hon ble High Court. To support his argument, Ld. Counsel relied on the order of NCLT (Principal Bench) at New Delhi in Group of Company Petitions bearing No.190/PB/2017. (c) As against this, Ld. Counsel, Mr. Gaggar for State Bank of India submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mist Asset Reconstruction Company Ltd. This being the case, it is difficult to comprehend how the High Court could have held that the proceedings before the NCLT were without jurisdiction. On this score, therefore, the High Court judgment has to be set aside. The NCLT proceedings will now continue from the stage at which they have been left off. Obviously, the company petition pending before the High Court cannot be proceeded with further in view of Section 238 of the Code. ii) Again in case of Forech India Ltd. -vs- Edelweiss Assets Reconstruction Co.Ltd., the ruling reported in 2019 SCC OnLine SC 87, wherein it has been held in para 22 that, From a reading of this Section, it does not follow that until a liquidation order has been made against the corporate debtor, an Insolvency Petition may be filed under Section 7 or Section 9 as the case may be, as has been held by the Appellate Tribunal. Hence, any reference to Section 11 in the context of the problem before us is wholly irrelevant. However, we decline to interfere with the ultimate order passed by the Appellate Tribunal because it is clear that the financial creditor s application which has been admitted by the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me company. So, in the circumstances mentioned above, it is necessary to adjourn this proceeding and wait for the order of the Hon ble High Court in winding up petition I.e. CP(iB) No.363/2011 . 17. Ld. Counsel for the corporate debtor submitted that this order is not challenged by the SBI. Now this authority cannot sit in the appeal against its own order and consider the SBI application under section 7 of IBC. 18. The Ld. Counsel relied on ruling of the Hon ble Apex Court in case of Devendra Pal Singh-vs- State, NCT of Delhi Anr.(2003) 2 Supreme Court Cases 501. I have gone through the rulings. The Apex Court was considering the point whether it can review its own judgment which reached at finality. It was not any interim order passed during adjournment proceeding. It was the case where judgment of acquittal of the accused for offence of murder was challenged in H.C.. The H.C. held him guilty. Death sentence was awarded. The appeal was decided by the SC. It converted punishment of death in to punishment of life imprisonment and the SC was considering review petition filed against that judgment by the accused. The ruling is not applicable to facts of this case. 19. I hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintainability of this proceeding on the ground that SBI suppressed material facts of pendency of winding up petition in the High Court. SBI had appeared in that matter. It has opposed the winding up proceeding, etc. Ld. Counsel for the corporate debtor and Ld. Counsel for the Intervenors submitted that it is a classic case of suppression of material facts by SBI. SBI is trying to seek some orders from this authority suppressing those facts. It is nothing but playing a fraud on this Judicial Tribunal. According to Ld. Counsels, such litigants have to be thrown out of the proceeding. They relied on rulings of the Hon ble Apex Court in case of M.C.D.-vs- State of Delhi and Anr. in Appeal (criminal) 660 of 2005. 22. Ld. Counsel, Mr. Gaggar for the bank submitted that the pendency of winding up proceeding against the corporate debtor is not material fact. It is not that the bank sought some favourable orders from this authority by suppressing those facts. Hon ble Supreme Court made it clear that if party sought favourable orders from the Courts suppressing some materials facts then it is amounting to playing fraud. In this case, SBI did not get any order from this authority. This au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favourable order? My answer to this question in the negative. 25.1 This authority did not pass any order in favour of the SBI. It is not a case wherein the SBI got some advantageous order being passed by this Adjudicating Authority because it did not disclose pendency of winding up petition against the corporate debtor. No doubt, SBI ought to have disclosed the same in all its fairness but only because SBI did not disclose those facts, is not enought to reject this application. SBI did not seek any order prejudicial to the interest of the corporate debtor. In fact, it is the say of SBI in this proceeding that as the corporate debtor is unable to pay huge debt, its insolvency resolution process may be started. I am not inclined to accept the submissions of the Ld. Counsel for the Corporate Debtor. Ld. Counsels for the Intervenors submitted that SBI by suppressing material facts played fraud on this authority. In my considered opinion, non-disclosure of pendency of winding up petition against the corporate debtor is not a relevant and material fact to decide this application. Hence, I answer point no.(iii) in the negative.. 26. There is no dispute to the fact that the corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied shall not be terminated or suspended or interrupted during the moratorium period. v) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. vi) The order of moratorium shall affect the date of admission till the completion of the Corporate Insolvency Resolution Process. Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of Sec.31 or passes an order for liquidation of corporate debtor under Section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. vii) Necessary public announcement as per Sec. 15 of the IBC, 2016 may be made by the resolution professional upon receipt of the copy of this order. (viii) As per the proposal by the Financial Creditor for the appointment of Interim Resolution Professional (IRP), Mr. Kshitiz Chhawchharia (Mob.9830492324), C/o- B. Chhawchharia co., 8A B Satyam Tower, 3, Alipore Road, Kolkata- 700 027 having Email id: kshitiz@bccoindi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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