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TMI Blog2021 (10) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... wal in Company Appeal (AT) (Insolvency) No. 932/2019. However, the same was upheld by NCLAT vide order dated 25.11.2019. The said order of NCLAT was further challenged by the Respondent No. 1 before the Hon'ble Apex Court in Civil Appeal No. 9142/2019. The Hon'ble Apex Court vide order dated 20.01.2020 remanded the matter back to NCLAT for fresh consideration from the point of view of limitation. 4. It is submitted that the Hon'ble NCLAT on further adjudication of the issues remanded back for fresh decision, upheld the admission, vide order dated 24.11.2020. 5. It is again submitted that in the meanwhile one "PLBB Products Pvt. Ltd." had submitted a Resolution Plan which was approved by the Committee of Creditors. The said Resolution Plan was pending approval by this Hon'ble Tribunal in I.A. No. 61/2020 initially but due to certain turn of events, which are detailed below, the application had become infructuous and was disposed of on 22.06.2021. 6. It is further submitted that Mr. Piyush Periwal, the promoter, shareholder and Chairman-Cum-Managing Director of the CD's suspended Board filed an Interlocutory Application being IA No. 05 of 2021 praying inter-ali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. The said Resolution Plan is pending approval by this Hon'ble Tribunal in IA No. 31/2021. 10. It is submitted that Mr. Piyush Periwal is also the Vice-chairman of the National Boards Ltd. (NBL for short), and a Personal Guarantor of the loan of NBL. His conduct with regard to the payment of the dues of Financial Creditor, through the Borrower or as a Personal Guarantor is far from satisfactory and there are enough evidences to show that he did not put up a bona fide effort to pay the dues of the Financial Creditor/Petitioner. 11. It is further submitted that a OTS was approved by the SASF for settlement of its dues. However, the Borrower did not adhere to the terms and conditions of the same. The conduct of the Borrower itself compelled SASF to revoke said OTS on account of non-payment of OTS amount and non-compliance of terms and conditions of the said OTS which was agreed by NBL vide letter dated May 9, 2005. 12. It is submitted that the Borrower failed to pay agreed OTS amount and also comply with the terms and conditions of agreed OTS despite lapse of more than 7 years and 4 months' time forcing SASF to revoke the said OTS vide letter dated September 24, 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012, while replying to the evacuation notice dated November 15, 2011 issued by the Hon'ble Tribunal, some of the encroachers viz. Mr. Ram Parvesh Mahato, Mr. Jaduram Kalita, Mr. Ratan Das and Mr. Krishna Yadav have revealed that they have requested Mr. Periwal to sell the encroached land to them at Rs. 50,000.00 per bigha. However, Mr. Periwal preferred to sell said land to one Mr. Shankar Charan Das merely at Rs. 10,000.00 per bigha. The encroachers also raised serious allegations that Mr. Periwal in order to avoid payment of income tax on capital gains had sold better quality of land than that of land in their possession at the rate of Rs. 10,000.00 per bigha whose real market price was much higher, which raises serious questions on the integrity of Mr. Periwal. 16. It is submitted that the Hon'ble DRT had made numerous attempts to attach the remaining mortgaged properties. However, due to the filing of various petitions by NBL before Hon'ble Gauhati High Court, the Hon'ble DRT could not attach the properties. Inspite of multiple orders, the learned DRT could not attach the properties mortgaged due to various reasons, primarily on account of multiple litigations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trumental in working against the payment of the dues of the Financial Creditor/Petitioner. 21. It is submitted that on 26.08.2020 the petitioner had issued a Demand Notice under Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules, 2019. A copy of the notice dated 26.08.2020 is annexed herewith and marked as ANNEXURE 6. 22. It is further submitted that Mr. Piyush Periwal has not responded to the aforesaid notice till date. The petitioner is filing application against Mr. Periwal for Personal Insolvency Resolution Process under IBC. 23. It is again submitted that the default against National Boards Ltd. (NBL) as on 01.08.2020 was Rs. 16,73,10,185.06 Mr. Periwal is not only on the board of the NBL but is also a Personal Guarantor and as such if Shri Piyush Periwal is allowed to participate and articulate in the resolution process, the recovery process of the dues of the applicant against NBL and Mr. Piyush Periwal would be adversely affected. Conversely the resolution process of the National Plywood Industries Ltd. would also be affected. 24. It is submitted that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution Process of the National Plywood Industries Ltd.) B. Direct that Mr. Piyush Periwal is not entitled to participate in the resolution process of National Plywood Industries Ltd. arising out of CP (IB)/09/GB/2019 (Corporate Insolvency Resolution Process of the National Plywood Industries Ltd.) C. Pass such further or other order as this Hon'ble Tribunal may deem fit and proper in the interest of justice. 31. The Respondent No. 1 i.e. Piyush Periwal has filed its reply to the above application i.e. IA (IBC) No. 46/2021 dated 30/08/2021 wherein the respondent has submitted the following clarifications: a. It is submitted that the instant application filed by the petitioner is frivolous, vexatious and devoid of any merit and is liable to be dismissed by this Hon'ble Tribunal. It is further submitted that the petitioner has no locus standi to file this application and has failed to raise any legal ground/issue for preferring this application before this Hon'ble Tribunal. It is important to note in this regard that any proceeding against the respondent based on the Recovery Certificate dated 05.01.2004 issued by the Hon'ble DRT, Guwahati in OA 27 of 2002 is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that the object of Section 29A was not to announce all promoters ineligible to be resolution applicants. The Code's objective is to promote an efficient and speedy insolvency procedure, however, the introduction of Section 29A proved to be contrary to the set objectives. g. The Insolvency and Bankruptcy Code, 2016 was enacted in the year 2016 to provide a comprehensive consolidating legislation with regard to Insolvency and Bankruptcy in India. Vide the 2018 amendment to the Code, Section 29A was inserted which basically laid down provisions with regard to individuals who are not eligible to submit a Resolution Plan. h. In the Law Committee report, the Committee recognised the importance of the MSME's in the Indian economy, stating that MSMEs form the foundation of the Indian economy, and are key drivers of employment, production, economic growth, entrepreneurship and financial inclusion. According to the Annual Report of the Ministry of MSMEs there are 512 lakh MSMEs in India which contributes to around 37.22 percent of the country's GDP, further highlighting their importance in the economy in terms of job creation and economic growth. i. The report conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9A while allowing the suspended management to file its plan. As none of the other provisions of Section 29A of the Code operate as a bar against the suspended management, upon taking into account the exemption of the provisions of Section 29A(c) and (h). The relevant portion of the orders reads thus: "20. The 'Committee of Creditors' is to consider the feasibility, viability and such other requirements as has been specified by the Board. If it proposes maximization of the assets and is found to be feasible, viable and fulfill all other requirements as specified by the Board, the company being MSME, it is not necessary for the 'Committee of Creditors' to follow all the procedures under the 'Corporate Insolvency Resolution Process'. For example, if case is settled before the constitution of the 'Committee of Creditors' or in terms of Section 12A on the basis of offer given by Promoter, in such case, all other procedure for calling of application of 'Resolution Applicant' etc, are not followed. If the Promoter satisfies all the creditors and is in a position to keep the 'Corporate Debtor' as a going concern, it is always open to 'C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to negotiate with existing Resolution Applicant and MSME unit also and accept the one which is commercially viable and technically feasible. Considering the above observations, we do not find any infirmity in the order and hence, we are dismissing the appeal. However, the Adjudicating Authority is requested to consider IA No. 51 of 2020 in CP (IB) No. 09/GB/2019 before finally approving any Resolution Plan." 34. Section 29 A of IBC provides for the eligibility of Resolution Applicant and Section 240 A explains how IBC code is applicable to MSMEs. Relevant portion of both the sections are reproduced below: 34.1 "29A. A person shall not be eligible to submit a resolution plan, if such person, or any other person acting jointly or in concert with such person: (c) at the time of submission of the resolution plan has an account, or an account of a corporate debtor under the management or control of such person or of whom such person is a promoter, classified as non-performing asset in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 or the guidelines of a financial sector regulator issued under any other law for the time be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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