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TMI Blog2022 (8) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... nue for indefinite period. When Appellant has submitted the Resolution Plan which was approved on 08.11.2018, he cannot just say that he was not aware of the proceedings before the Adjudicating Authority for approval of the Resolution Plan. The Adjudicating Authority has rightly drawn a conclusion that inaction on the part of the Resolution Applicant clearly indicates that he was not willing to proceed with the Resolution Plan approved by the CoC - the Adjudicating Authority has given valid reason in the order for proceeding with the liquidation of the Corporate Debtor. The present was not a case where there was any violation of Section 74(3) by the Appellant. Since the Resolution Plan was never approved by the Adjudicating Authority, the Corporate Debtor or its officers or creditors or any other persons cannot be said to have knowingly and wilfully contravened any of the terms of the Resolution Plan - application allowed. - Company Appeal (AT) (Insolvency) No. 128 of 2022 - - - Dated:- 1-8-2022 - [Justice Ashok Bhushan] Chairperson , [Justice M. Satyanarayana Murthy] Member (Judicial) And [Barun Mitra] Member (Technical) For the Appellants : Mr. Ashish Makhija and Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of non-bailable warrants. The Adjudicating Authority delivered the impugned order on 24.11.2021 by which CA- 734 of 2018 has been rejected. Application I.A Nos. 5026 of 2021, 5027 of 2021 and 5028 of 2021 have also dismissed and order of liquidation was passed and liquidator was directed to take necessary steps for filing a Complaint under Section 74(3) of the IBC against the Resolution Applicant. The Resolution Applicant aggrieved by the said order has come up in this Appeal. 3. Learned Counsel for the Appellant submits that the Appellant was initially not party to the Application CA- 734 of 2018 and he was made party only on 03.03.2021 by the order of the Adjudicating Authority. He could not appear before the Adjudicating Authority, thereafter, due to certain miscommunications and the Appellant is still ready to abide by the Resolution Plan and ready to comply all terms and conditions for the Resolution Plan. It is submitted that the Resolution Plan did not contemplate giving of any performance guarantee since the provision pertaining bringing requirement of submitting performance guarantee was inserted in the CIRP Regulations only subsequent to approval of the Resolution Plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amended memo of parties. Heard the Ld. Counsel appearing for the RP. Prayer is allowed. List this IA along with the CA- 734/C-II/ND/2018. With this, the present IA is closed. 8. On 04.08.2021, when the matter was taken, it was pointed out by the Resolution Professional that the Resolution Applicant has failed to deposit the performance guarantee for the Resolution Plan considering which bailable warrant was issued. An Affidavit of Service was also filed on 18.03.2021. Subsequently, the non-bailable warrant was issued as noticed above. 9. It is relevant to notice that on the date when Resolution Plan was approved i.e. November, 2018, the CIRP Regulations did not provide for submission of the performance guarantee. The provision for submission of performance guarantee was added in Regulation 36 B of the CIRP Regulations by Notification dated 24.01.2019. Regulation 36B (4A) is as follows:- 36B. Request for resolution plans. .[(4A) The request for resolution plans shall require the resolution applicant, in case its resolution plan is approved under sub-section (4) of section 30, to provide a performance security within the time specified therein and such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution Plan approved by them has been approved by the CoC. The said submission made by the Ld. Counsel of the RA shows the non-seriousness of the RA towards the Resolution Plan, it has submitted. 7. It is further brought to the knowledge of this Bench that vide order dated 03.03.2021, the application filed by the RP for amendment of Memo of Parties and including the name of the RA in the memo of parties was allowed in which one of the prayer was for deposit of the performance guarantee. The said order of this Bench has also not been complied with by the RA till date. The above facts make it clear that the RA is not interested in going ahead with the implementation of the Resolution Plan and is only wasting time of everyone, which is causing huge loss to the Creditors of the CD. 8. Looking into the above scenario, where already a period of 3 years have lapsed and till date the RA has not taken any steps towards deposit of performance guarantee as part of the Resolution Plan, this Bench does not think it fit to allow the CA No. 734 of 2018 filed by the RP, as till date the RA has not shown any intention to abide by the Resolution Plan. Thus, the application filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was also uncalled for. Section 74(3) is as follows:- 74. Punishment for contravention of moratorium or the resolution plan. - (3) Where the corporate debtor, any of its officers or creditors or any person on whom the approved resolution plan is binding under section 31, knowingly and wilfully contravenes any of the terms of such resolution plan or abets such contravention, such corporate debtor, officer, creditor or person shall be punishable with imprisonment of not less than one year, but may extend to five years, or with fine which shall not be less than one lakh rupees, but may extend to one crore rupees, or with both. 14. The present was not a case where there was any violation of Section 74(3) by the Appellant. Since the Resolution Plan was never approved by the Adjudicating Authority, the Corporate Debtor or its officers or creditors or any other persons cannot be said to have knowingly and wilfully contravened any of the terms of the Resolution Plan. We, thus, are of the view that direction issued in paragraph 20 for filing a complaint under Section 74(3) against the Appellant is also unsustainable. In result, we partly allow the Appeal in the following manner:- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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