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TMI Blog2022 (8) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... larity to the prayers of the Appellant made in MA 520/2019 - the case is remanded back to the Adjudicating Authority for providing an appropriately reasoned and clear order in the light of prayers made in MA 520/2019 after giving due opportunity of hearing to the parties - appeal disposed off. - Company Appeal (AT) (Ins.) No. 303 of 2020 - - - Dated:- 5-8-2022 - ( Justice M. Satyanarayana Murthy ) Member ( Judicial ) , ( Mr. Kanthi Narahari ) Member ( Technical ) And ( Dr. Alok Srivastava ) Member ( Technical ) For the Appellant : Mr. Saurav Jain , Advocate For the Respondent : Mr. G. Karthikeyan and Mr. Anurag Anand , Advocates JUDGMENT [ Per. Dr. Alok Srivastava , Member ( Technical ) ] 1. This appeal has been fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etings, the ratio of sharing of funds between the Term Lenders and Working Capital lenders which was to be obtained from sale proceeds of corporate debtor s assets, between the first and second charge holders was decided as 70:30 in the meeting dated December 13, 2010, which was later revised to 80:20 in the meeting dated 17.7.2017. He has further argued that he had approached the Adjudicating Authority through MA No. 520/2019 for seeking clarification regarding bifurcation of the amounts to be distributed to the lenders and for adhering to the waterfall mechanism as prescribed under section 53 of the IBC for distribution of funds to the lenders. He has also argued that the Impugned Order has neither accepted his prayer nor any bifurcatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the 80:20 ratio in distribution of sale proceeds between first and second charge holders. He has pointed out that, in this regard, the representative of Stressed Assets Stabilization Fund (SASF) of IDBI, UTI and LIC of India opined through respective email communications that provisions under IBC should be followed for distribution of sale proceeds, as proceedings in NCLT are taking place under IBC. These communications are attached at pgs. 61, 65 and 69 respectively of the appeal paperbook. The Learned Counsel of the Respondent has also submitted that the proposed distribution structure of the liquidation estate of Precision Fasteners Ltd. (corporate debtor) was communicated to the stakeholders vide email dated December 9, 2019 (att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. This particular issue has not been dealt with in the Impugned Order, and it therefore remains unclear whether this prayer was at all considered and decided in a well-reasoned and logical manner. 9. Looking at the reliefs sought by the Appellant in MA No. 520/2019 and those in the present appeal, we are of the view that the Impugned Order, by which MA 520/2019 was disposed of, does not provide any clarity on how the prayers made in MA 520/2019 have been dealt with. It cannot be gainsaid that the Appellant, who is a stakeholder in the liquidation process, is entitled to know his share in the distribution matrix and how it has been arrived at. The Impugned Order falls short of providing a reasoned answers to the Applicant s (ARSEC (India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concept of a welfare State itself. Self-discipline and supervision exclude or at any rate minimize arbitrariness. The least a tribunal can do is to disclose its mind. The compulsion of disclosure guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimizes arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bounds, A reasoned order is a desirable condition of judicial disposal. 12. On perusing the Impugned Order in the light of the dictum laid down by the Hon ble Supreme Court in the above-mentioned judgments, we are of the view that the Impugned Order falls short in provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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