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TMI Blog2021 (9) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of insolvency resolution process is 330 days, which means that the period so referred to in Section 5(14) of IBC, 2016 is subject to the extension made under Section 12 of IBC, 2016 or when the Resolution Plan is approved by the Adjudicating Authority - in the case in hand, the Resolution Plan has already been approved by the Adjudicating Authority on 02.04.2019. Therefore, no insolvency proceeding is pending before the Adjudicating Authority. Maintainability of application under Rule 11 of NCLT Rules, 2016 - HELD THAT:- During the pendency of any matter before the Tribunal, when there is no specific provision under the Act/Code is given only then the Tribunal may pass order by exercise of its power under Rule 11 of the National Company Law Tribunal Rules to deal with such situation. But herein the case in hand, no such matter is pending after the approval of Resolution Plan by the Adjudicating Authority, therefore, a separate application to deal with a new issue cannot be entertained under Rule 11 of the NCLT Rules, 2016. As per Section 25(1) of IBC, it is the first and foremost duty of the IRP/RP to preserve and protect the assets of the corporate debtor, including th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Moratorium was imposed on the assets of Corporate Debtor. Resolution Plan for Corporate Debtor was approved on 02.04.2019. ii. That it is stated that post imposition of moratorium, the Interim Resolution Professional had paid certain amounts to the Respondents on 02.11.2017, 09.01.2018, 09.02.2018, 22.02.2018, 10.04.2018, 26.04.2018, 22.05.2018, and 30.06.2018 by Bank transfer, as advance for the supply of goods. iii. That it is contended that Corporate Debtor seeks ₹ 12,30,457/- from respondents; as despite receiving this amount, the respondents neither supplied the goods/components nor refunded the amount to the corporate debtor. iv. That it is further contended that the respondents instead of making payments, issued legal notice for recovery of ₹ 34,07,390/-. It is claimed that as per Resolution Plan nothing is payable to the Respondents, which dis-entitles the Respondents and they cannot retain any amount from the Corporate Debtor. v. That it is further contended that the abovementioned amounts were given to the Respondents as advance for supply of crucial goods, which were essential for the Corporate Debtor to operate as going concern du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein, it is alleged that ₹ 12,30,457/- is outstanding in the books of account maintained by the Corporate Debtor. vii. That it is further contended that against the said notice dated 10.10.2019, the Respondents had sent reply dated 21.10.2019 claiming that ₹ 34,07,390 is due and payable by the Corporate Debtor. It is pertinent to mention that the said reply clearly specified that the amount as alleged by the Corporate Debtor is not payable as the Respondents had supplied goods to the Corporate Debtor and RP had made part payment against the invoices issued for the said supply of goods. viii. It is alleged that the applicants have relied on the ledger for the period between 26.10.2017 to 31.03.2019 but the applicants elected not to disclose a material fact regarding the outstanding balance payable by the Respondents to the Corporate Debtor amounting to ₹ 37,07,390 that should have been the opening balance in such a ledger keeping in mind the prior business and commercial relationship between the Respondents and the Corporate Debtor since 2012. ix. It is also stated that prior to approval of the Resolution plan by the CoC on 21.07.2018, Successful Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t contented all the facts that are mentioned in the application. 9. It is further contended by the Applicants' Counsel that in this matter, the Corporate Insolvency Resolution Process (hereinafter referred to as 'CIRP') was initiated on 26.10.2017 against the Corporate Debtor and during the moratorium period, the Interim Resolution Professional (IRP) had made payments to the respondents on the following dates i.e., 02.11.2017, 10.04.2018, 26.04.2018, 22.05.2018 and 30.06.2018 for the supply of the goods/components. 10. He further contended that the Resolution Plan was approved by the Adjudicating Authority on 02.04.2019 and the Corporate Debtor seeks payment of ₹ 12,30,457/-, which were wrongly misappropriated by the respondents. 11. He further contended that although the advance payment was made to the respondents for the supply of goods/components but the respondents failed to supply the goods/components. Therefore, the Corporate Debtor had sent a legal notice to the respondents for the refund of that amount. 12. He further contended that the respondents instead of refunding ₹ 12,30,457/-, rather sent a demand of ₹ 34,07,390/- to be recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NCLT Rules, 2016 or under Section 60(5) of IBC, 2016, which is subsequently added by filing IA/1356/2021. 23. So far as the Section 60(5) of IBC is concerned, at this juncture, we would like to examine the said provision to consider whether the prayers of the applicants come within the purview of Section 60(5) of IBC, 2016 or not? 24. The relevant provision of Section 60(5) of IBC, 2016 is quoted below: IBC Section 60-Adjudicating Authority for corporate persons. 1.............. 2.............. 3.............. 4.............. 5. Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of- (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and (c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y then the Tribunal may pass order by exercise of its power under Rule 11 of the National Company Law Tribunal Rules to deal with such situation. But herein the case in hand, no such matter is pending after the approval of Resolution Plan by the Adjudicating Authority, therefore, in our considered view, a separate application to deal with a new issue cannot be entertained under Rule 11 of the NCLT Rules, 2016. Therefore, in our considered view, Rule 11 of NCLT Rules, 2016 is also not applicable in the case in hand. And the application filed by the applicants is also not maintainable under Rule 11 of NCLT Rules. 33. Apart from the above, we also consider the submissions of Applicants on merit. Therefore, in the light of the submissions raised on behalf of the parties, we consider the prayer of the applicants. 34. On the basis of the pleadings of the parties, the following are the admitted facts: i. Prior to the initiation of CIRP, respondents used to supply material i.e. goods/components to the Corporate Debtor. ii. After the initiation of CIRP, on the request of RP, the respondents continued to supply the goods/components and the payment was being made by the RP for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editors under section 28; (d) appoint accountants, legal or other professionals in the manner as specified by Board; (e) maintain an updated list of claims; (f) convene and attend all meetings of the committee of creditors; (g) prepare the information memorandum in accordance with section 29; (h) invite prospective resolution applicants, who fulfil such criteria as may be laid down by him with the approval of committee of creditors, having regard to the complexity and scale of operations of the business of the corporate debtor and such other conditions as may be specified by the Board, to submit a resolution plan or plans; (i) present all resolution plans at the meetings of the committee of creditors; (j) file application for avoidance of transactions in accordance with Chapter III, if any; and (k) such other actions as may be specified by the Board. IBC Section 25A. - Rights and duties of authorised representative of financial creditors. (1) The authorised representative under sub-section (6) or sub-section (6A) of section 21 or sub-section (5) of section 24 shall have the right to participate and vote in meetings of the committee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor, including the continued business operations of the corporate debtor. And in order to protect and preserve the assets of the corporate debtor, a separate provision has been made under Section 14(2) of IBC and Sub Section 2A of Section 14 is added w.e.f. 28.12.2019, as per which the supply of essential goods or services of the Corporate Debtor shall not be terminated, suspended or interrupted during the period of moratorium. Even before the insertion of Sub Section 14(2A) there was a provision under Section 14(2) of IBC, which authorised the RP to permit anyone to continue the supply of essential goods or services which is necessary to keep the Corporate Debtor as a going concern. 38. By exercising this power, the RP had made a request to the respondents to continue the supply of goods/components and accordingly, the respondents had been continuing the supply of the goods/components in order to keep the Corporate Debtor as a going concern and in lieu of that, the payments were received by the respondents. 39. The respondents in its reply in para 20 have given a summary of transactions occurred between the respondents and corporate debtor, prior to the initiation of CIRP an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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