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TMI Blog2022 (4) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... rity has not decided the said I.A for more than period of one year and five months. In spite of two orders passed by this Tribunal and judgment of the Hon ble Supreme Court dated 26.11.2021 and 14.02.2022, we see no justification in continuing the interim order dated 09.09.2020 staying the distribution to the Financial Creditor in the liquidation process. By order of the Adjudicating Authority, the claim of the Financial Creditor to receive the disbursement has adversely affected and they are not able to receive the disbursement as per their claim. Regulation 43 amply take care of any excess amount to any stakeholders. We may also notice that in the Application I.A. No. 368 of 2020, the Respondent No.1 has challenged the acceptance of the claim of the Appellant by the Liquidator. On the other hand, the Respondent No.1 has refuted the locus of the Appellant to challenge the decision of the Liquidator accepting the claim. It has been submitted before us that hearing in Application I.A. No. 368 of 2020 has already been commenced before the Adjudicating Authority in which next date is 07.04.2022 - in this Appeal the only Application I.A No. 555 of 2020 needs to be finally decided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority passed an ex-parte interim order on 09.09.2020 directing the Liquidator to maintain status quo with regard to distribution of funds to the Respondent Nos.2 to 5 to the application. After the aforesaid ex-parte interim order, the Appellant- Kotak Mahindra Bank Ltd. filed an I.A No. 555 of 2020 under Section 60(5) of the Code r/w Rule 49 of the NCLT Rules, 2016 for recall of the order dated 09.09.2020. On 21.10.2020, the Adjudicating Authority issued notice in I.A No. 555 of 2020. I.A No. 368 of 2020 and I.A No. 555 of 2020 were listed before the Adjudicating Authority on several occasions but could not be decided. The Appellant filed Company Appeal (AT) (Ins.) No.21 of 2021 seeking direction to the Adjudicating Authority to dispose of the I.A No. 368 of 2020 and I.A No. 555 of 2020 in a time bound manner which Appeal was disposed of by this Appellate Tribunal by order dated 19.01.2021 requesting the Adjudicating Authority, Chandigarh Bench to expedite the process and dispose of the same within three months. The order dated 19.01.2021 of this Tribunal was placed before the Adjudicating Authority which also took note of the order and fixed a date for hearing in February, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the Hon ble Supreme Court by the Respondent No.1. 5. On 14.02.2022, the Hon ble Supreme Court dismissed the Miscellaneous Application No. 252 of 2022 filed by the Respondent No.1 in Civil Appeal No. 6944 of 2021. By order dated 14.02.2022, the Hon ble Supreme Court again requested this Appellate Tribunal to take up the Appeal for consideration and pass such orders as may deem fit and necessary, keeping in view of the observations and expectations in the order passed by the Hon ble Supreme Court on 26.11.2021. 6. After the order of the Hon ble Supreme Court on 14.02.2022, this Appeal was again taken on 28.02.2022, when the Counsel for the parties informed that the Adjudicating Authority has started hearing the matter and next date fixed for hearing is 08.03.2022. We adjourned the Appeal to 25.03.2022 awaiting the orders of the Adjudicating Authority. 7. On 25.03.2022, when this Appeal was taken, we were informed that the Applications were not still decided. We observed that we need to decide the Applications I.A No. 368 of 2020 and I.A No. 555 of 2020 as per the orders of the Hon ble Supreme Court since the Adjudicating Authority has been unable to decide the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d:- IA No.368/2020 This IA has been filed by the Suspended Managing Director of M/s. Oswal Spinning and Weaving Mills Ltd. which is undergoing liquidation proceedings against the Liquidator and certain other claimants under Section 60(5) of the Code read with Section 42 of the Insolvency and Bankruptcy Code, 2016 aggrieved with the decision of the Liquidator in admitting the claims of respondent Nos. 2 to 5. Heard the learned Senior Counsel for the applicant. Issue notice to the respondents and the applicant counsel shall collect the same from the Registry and send along with copy of the application and the entire paper book to the respondents by Speed Post immediately as well as at the e-mail address available and file affidavit of service along with postal receipt, tracking report and copy of e-mail within 10 days. 2. Opportunity is given to the respondents to file reply/objections, if any, within two weeks from the receipt of the notices and rejoinder thereto, if any, may be filed within one week thereafter with copy in advance to the counsel opposite. List the matter on 21.10.2020. 3. In the meanwhile, the respondent No.1 Liquidator shall maintain status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within one week. 20. Reply be filed within one week after receipt of notice with a copy in advance to the counsel opposite. 21. List this IA alongwith IA No. 368/2020 on 10.11.2020. 12. There has been several dates fixed before the Adjudicating Authority after 21.10.2020 but the Applications could not be disposed by the Adjudicating Authority. Hence, Company Appeal (AT) (Ins.) No. 21 of 2021 was filed by the Appellant asking this Appellate Tribunal to issue direction to the Adjudicating Authority for adjudication of the Applications I.A No. 368 of 2020 and I.A No. 555 of 2020. This Appellate Tribunal on 19.01.2021 passed following orders:- 19.01.2021: The impugned order is not an order adjudicating upon the rights of the parties. It merely says that due to paucity of time, the matter stands adjourned to 18th January, 2021, which date has already elapsed. Mr. Manish Jain, Advocate representing the Appellant submits that even yesterday i.e. on 18th January, 2021, the matter could not be taken up and it has again been adjourned. Corporate Insolvency Resolution Process arising out of an admission of an application under Section 7 of the Insolvency and Bankruptcy Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said order dated 10.08.2021 was passed by the Appellate Tribunal without notice to the opposite party. We are further informed that even after the said order dated 10.08.2021, the Adjudicating Authority adjourned the matter on 11.10.2021 and again on 02.11.2021; and the matter is now fixed by the Adjudicating Authority for consideration on 12.01.2022. We are clearly of the view that in the given set of circumstances, the Appellate Tribunal, while reiterating its request to the Adjudicating Authority to decide the pending IAs at the earliest, ought not to have disposed of the appeal. Rather, the Appellate Tribunal could have kept the appeal pending, while awaiting compliance from the Adjudicating Authority and, if necessary compliance was not yet forthcoming, to withdraw the matter from the National Company Law Tribunal, Chandigarh Bench, Chandigarh and either to dispose of itself or transfer it to some other Bench of the Tribunal for necessary steps. In the aforesaid view of the matter, without notice to the other side, we set aside the last paragraph (No.6) of the order impugned, whereby the appeal has been disposed of by the Appellate Tribunal. Instead, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there ought not to be tearing hurry in deciding those applications. Such a proposition on the part of the applicant cannot be countenanced, particularly looking to the previous orders passed in the matter, as noticed hereinabove. It is also noticed from the record that though we had restored the said appeal before the Appellate Tribunal so that appropriate and necessary orders could be passed, the Appellate Tribunal has chosen not to pass any other order in the matter, for the reason that the present application was said to be pending in this Court. Taking the totality of facts and circumstances into account, the application so moved by respondent No.1 of the appeal is specifically rejected. We would request the Appellate Tribunal to immediately take up the appeal for consideration and to pass such orders as may be deemed fit and necessary, keeping in view the observations and expectations in the order passed by this Court on 26.11.2021. 17. In view of the orders passed by the Hon ble Supreme Court, we indicated to the Learned Counsel for the parties that I.A No. 368 of 2020 and I.A No. 555 of 2020 need to be heard by this Tribunal and we proceeded to hear the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is necessary to be decided which will prove that no debt is due to the Appellant. The counter claim has been filed by the Corporate Debtor against the Appellant also. It is further submitted that the Liquidator has not taken any step to prosecute the counter claim before the DRT. It is submitted that it is the duty of the Liquidator to prosecute the claim of the Corporate Debtor before the DRT. The counter claim was filed by the Corporate Debtor even before initiation of CIRP. It is submitted that the Counsel is not aware that the Application I.A No. 368 of 2020 was filed after serving copy on the Appellant or not. 20. Shri Abhishek Anand, Learned Counsel for the Liquidator submits that the claims were invited by the Liquidator in accordance with the Liquidation Process, 2016 and above process cannot be subject to any other proceeding. The Liquidator cannot keep the proceeding pending awaiting decision of the DRT. The Application filed by the Respondent No.1- Suspended Director was not maintainable as the Respondent No.1 is asking something which he cannot do directly. If the lender received more amount, they are liable to refund the same as per Regulation 43 and there was no o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.2020 was ex parte which is clear from the order itself. In the present case, interim order affecting the claim of the Financial Creditors for distribution of funds by Liquidator has been estopped. 25. The Appellant has immediately filed an Application I.A. No. 555 of 2020 before the Adjudicating Authority for recall of the ex parte order dated 09.09.2020. The main plea of the Respondent No.1 in I.A No. 368 of 2020 is that if the DRT decides the counter claim of the Corporate Debtor no distribution be permitted in the liquidation process. The pendency of the counter claim of the Corporate Debtor before the DRT cannot be ground to stay the distribution to the Financial Creditors as per the claim admitted by the Liquidator. Proceedings under the IBC are time bound proceedings which has an overriding effect by virtue of Section 238. In the facts of the present case, we are of the view that I.A No. 555 of 2020 filed by the Corporate Debtor for recall of the ex parte order ought to have been allowed by the Adjudicating Authority. The Adjudicating Authority has not decided the said I.A for more than period of one year and five months. In spite of two orders passed by this Tribunal an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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