9911796707
TMI Blog2022 (6) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... to collect and peruse the information regarding Corporate Debtor and claimants before constituting CoC - Clause 6 and 7 of the declaration part of the form clearly require the declaration from the Financial Creditor who submitted the claim before RP that it is not covered under section 5(24) and it is the due diligence of the RP to confirm the said declaration. The CoC is constituted with the Financial Creditor who is a related party to the Corporate Debtor and the survival of the said CoC is restricted by the express provision of the code. In addition, it appears that there is negligence on the part of Resolution Professional in identifying the related party in the CoC. The 2nd Respondent, Resolution Professional of the Corporate Debtor is hereby directed to remove the 1st Respondent herein from the Committee of Creditors (CoC) of the Corporate Debtor viz. Mega Foods Products Madras Pvt. Ltd. as the 1st Respondent is related party to the Corporate Debtor - Application allowed in part. - IA(IBC)/1322(CHE)/2021 in IBA/1364/2019 - - - Dated:- 1-6-2022 - S. Ramathilagam, J. (Member (J)) And Anil Kumar B., Member (T) For the Appellant : K. Gaurav Kumar, PCS For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d between the Corporate Debtor and the 1st Respondent, and disputed that in the said promissory note the Corporate Debtor was made liable to pay double the amount which it actually liable to pay the 1st Respondent. 8. It was further submitted that the 1st Respondent purposefully suppressed the shareholder agreement dated 16.11.2016 and projected itself as a Financial Creditor and fraudulently initiated CIRP against the Corporate Debtor. Further, contended that the 1st and 2nd Respondents acted in collusion and the 1st Respondent should be disqualified to continue as Financial Creditor. 9. In view of the above submissions the Applicant sought to dissolve CoC constituted with the relative party. In support of his submissions relied on Hon'ble NCLAT decisions in Jayendra Banerji Vs. Shashi Agarwal and Bimalesh Bharadwaj and Ors. Vs. Value Infratech Private Limited. 10. In opposition to that the Learned Counsel for the Respondent in the counter submitted that this Tribunal has already considered the documents of the 1st Respondent and initiated CIRP against the Corporate Debtor. It was further submitted that the Applicant has preferred an appeal before the NCLAT in CA(AT)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent in para 5 of the written submission filed by the 2nd Respondent. 16. The only argument of the Respondent is the said the uncle and niece relationship between the 1st Respondent and Ms. Deepthi Vinod Bansal is not covered by the definition under Section 5(24) of IBC, 2016 and the definition of the expression 'relative' in the Explanation of Section 5(24A) of IBC, 2016 could not be applied for the expression 'relative' in 5(24)(a) (b). 17. It can be seen that in the Shareholder's Agreement dated 16.11.2016, it is depicted as follows 18. Having noticed the above position, we may now turn to the provisions of the Insolvency and Bankruptcy Code, 2016 Section 5: Definitions- ... (24) related party , in relation to a corporate debtor, means (a) a director or partner of the corporate debtor or a relative of a director or partner of the corporate debtor; (b) a key managerial personnel of the corporate debtor or a relative of a key managerial personnel of the corporate debtor; ... (24A) related party , in relation to an individual, means ... Explanation.--For the purposes of this clause,-- (a) rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. Anr. Vs. Union of India Ors., it was held as follows 75. ... All the categories in Section 29A(j) deal with persons, natural as well as artificial, who are connected with the business activity of the resolution applicant. The expression --related party, therefore, and --relative contained in the definition Sections must be read noscitur a sociis with the categories of persons mentioned in Explanation I, and so read, would include only persons who are connected with the business activity of the resolution applicant. ... Jointly reading the above provisions in the light of the above observations of Hon'ble Apex Court and applying it to the present case we are of the considered opinion that the 1st Respondent, sole member of the CoC of the Corporate Debtor and Ms. Deepthi Vinod Bansal, who is 49% shareholder of the Corporate Debtor were uncle and niece. Thus, 1st Respondent and sole member of the CoC of the Corporate Debtor fall under the expression of 'related party of the corporate debtor' in 1st proviso of Section 21(2) and the 1st Respondent herein is prevented to be a part of the CoC. 19. In so far as issue 2 is concerned it is us ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
