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TMI Blog2022 (2) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... B Code, 2016, are eligible to furnish Resolution Plan under (c) of Section 29A, if they happen to be individuals, who are in the erstwhile management or control of the Corporate Debtor , as per decision of the Hon ble Supreme Court in Arcelormittal India Private Limited V. Satish Kumar Gupta, [ 2018 (10) TMI 312 - SUPREME COURT ]. Applicant/Petitioner had sought a direction to be issued to the Liquidator to convene the Meeting of the Creditors (inclusive of all the Creditors i.e., Respondent No. 2) and place before them the Scheme of Compromise/Settlement for their consideration , this Tribunal taking note of the fact that if the Promoter is ineligible under Section 29A of I B Code, 2016 cannot make an Application for Compromise and Arrangement for taking the immovable property and actionable claim of the Corporate Debtor coupled with Regulation 2B(1) of the Insolvency of Bankruptcy Board of India (Liquidation Process) Regulations 2016 comes to a resultant conclusion that the Applicant in I.A. No. 387/2021 in IB 197(ND) 2018 before the Adjudicating Authority is ineligible to prefer an Application under Section 230-232 of the Companies Act, 2013 and viewed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany Appeal (AT) No.221 of 2018 are as follows: 12. From the aforesaid provision, it is clear that the Promoter, if ineligible under Section 29A cannot make an application for Compromise and Arrangement for taking back the immovable and movable property or actionable claims of the Corporate Debtor . 13. The National Company Law Tribunal by impugned order dated 15th May, 2018, though ordered to proceed under Section 230 to 232 of the Companies Act, failed to notice that such application was not maintainable at the instance of 1st Respondent-Arun Kumar Jagatramka (Promoter), who was ineligible under Section 29A to be a Resolution Applicant . 14. For the reasons aforesaid, we set-aside the impugned order dated 15th May, 2018 and remit the case to Liquidator / Adjudicating Authority to proceed in terms of the decision of this Appellate Tribunal in Y. Shivram Prasad (supra). The Appeal is allowed with the aforesaid observations and directions. No costs. The relevant paragraph of the judgement of the Hon ble Supreme Court dated 15.03.2021 are as under: 70. An argument has also been advanced by the appellants and the petitioners that attaching the ineligibilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the considered view, that in terms of Section 29A (g) of the IBC 2016 and Regulation 2(B)(1) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 the Applicant is not eligible to file any application under Sections 230-232 of the Companies Act. Hence, we are not inclined to allow the prayer of the Applicant. and dismissed the interlocutory application. APPELLANT S CONTENTIONS: 3. The Learned Counsel for the Appellant submits that the Adjudicating Authority had erroneously dismissed the I.A. No. 3879 of 2021 in C.P.(IB) No. 197/ND/2018 on 04.01.2022 without appreciating the fact the Liquidator had in the teeth of the Order dated 08.01.2021 had wrongly convinced the Meeting of Creditors as the 4th Respondent was wrongly and purposefully excluded from the Meeting of the Creditors . 4. The Learned Counsel for the Appellant contends that the Adjudicating Authority had failed to take note of a prime fact that this Appellate Tribunal through an order dated 20.10.2020 in Company Appeal (AT)(INS) No. 915/2020 in the matter of Ramesh Kumar Suneja Vs. Pawan Buildwell Pvt. Ltd. Ors. had granted liberty to the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the 1st Respondent, the Adjudicating Authority on 05.02.2020 had passed the Order of Liquidation under Section 33 of the I B Code, 2016. 13. On behalf of the 1st Respondent, it is projected before this Tribunal that in Company Appeal (AT)(INS) No. 915/2020, (filed by the present Appellant) on 20.10.2020, this Tribunal at paragraphs 3 4 had observed the following: 3. Shri Piyush Singh, learned counsel representing the Appellant submits that Corporate Debtor is prepared to settle the claims of the Creditors. If that be the case, the Corporate Debtor can take resort to provisions of Section 230 of the Companies Act, 2913 even at the liquidation stage by floating Settlement Plan/Scheme/Compromise. 4. Keeping in view that submission made by learned counsel for the Appellant and the fact that the Corporate Debtor intends to settle with the Creditors, we dismiss the instant appeal with observation that the dismissal this appeal shall not preclude the Corporte Debtor from advancing proposal or floating a scheme/settlement in terms of aforesaid provision. . and dismissed the Appeal . 14. The Learned Counsel for the 1st Respondent brings it to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... run as under: 2B Compromise or arrangement (1) Where a compromise or arrangement is proposed under Section 230 of the Companies Act, 2013 (18 of 2018), it shall be completed within ninety days of the order of liquidation under sub-section (1) and (4) of section 33: [Provided that a person, who is not eligible under the Code to submit a resolution plan for insolvency resolution of the corporate debtor, shall not be a party in any manner to such compromise or arrangement] Section 29A of the I B Code, 2016 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- [..] (g) has been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under this Code Provided that this clause shall not apply if a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place prior to the acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Section 35(1)(f). That being the position, there can be no manner of doubt that the proviso to Regulation 2B is clarificatory in nature. Even absent the proviso, a person who is ineligible under Section 29A would not be permitted to propose a compromise or arrangement under Section 230 of the Act of 2013. We therefore do not find any merit in the challenge to the validity of Regulation 2B. [ ] F Conclusion 97. Based on the above analysis, we find that the prohibition placed by the Parliament in Section 29A and Section 35(1)(f) of the IBC must also attach itself to a scheme of compromise or arrangement under Section 230 of the Act of 2013, when the company is undergoing liquidation under the auspices of the IBC. As such, Regulation 2B of the Liquidation Process Regulations, specifically the proviso to Regulation 2B(1), is also constitutionally valid. For the above reasons, we have come to the conclusion that there is no merit in the appeals and the writ petition. The Civil appeals and writ petition are accordingly dismissed. 19. The Learned Counsel for the 1st Respondent advances an argument that the Law is well settled by now that if a person is ineligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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