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TMI Blog2022 (9) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... o play are Regulations 10, 12, 13 14 of the CIRP Regulations - It is noticed that the RP sought clarification from the Applicant vide e-Mail dated 24.11.2021 after receiving information/documents from Punjab National Bank, to which, the Applicant did not reply. Therefore, the RP in discharge of his duties as stipulated under the Act as well as in the Regulations updated the claim on the basis of documents received by him and re-designated the Applicant from Financial Creditor to Financial Creditor - Related party. The action of the RP in issuing e-Mail dated 29.11.2021 cannot said to be the adjudicatory in nature and it is in fact administrative in nature - the RP has acted well within his limits and took into consideration the material placed before him subsequently by Punjab National Bank which is supported by State Bank of India as well as by the promoters of corporate debtor. Whether the Applicant can be held to be a related party of the Corporate Debtor in the facts circumstances of the present case? - HELD THAT:- It is seen that both the parties will have share on profits and furthermore the brokerage will be shared by them. It is thus clear that there is a nexus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -292/ND/2021 filed under Section 9 of IBC, 2016 for initiating CIRP on behalf of the Operational Creditor - Balaji Durobuild (P) Limited of the Corporate Debtor M/s. Sandwoods Infratech Projects (P) Limited. 6. Consequent upon the admission of case, Mr. Ravinder Kumar Goel was appointed as an Interim Resolution Professional (IRP). The IRP, in compliance with Regulation 6 (1) of the CIRP Regulations, 2016 made Public announcement on 07.10.2021 wherein the last date of submission of claim was 08.11.2021. Pursuant to said public announcement, the Applicant submitted its claim in Claim Form-C dated 06.11.2021 vide e-mail dated 08.11.2021. The RP, after collation of the claims received by him issued notice to the Applicant vide e-Mail dated 28.11.2021 informing him to be a member of the Committee of Creditors under Section 21 of IBC and to attend the 1st COC meeting scheduled to be held on 24.11.2021. The Applicant participated in the 1st COC meeting held on 24.11.2021 as a member of the COC in the capacity of being a Financial Creditor. The Resolution Professional informed the Applicant that he was allocated with the Voting Share of 11.16%. However, the Respondent/Resolution Profess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated in the reply that the Applicant did not disclose the facts that he is a related party to the Corporate Debtor in the Claim Form-C and, therefore, the Resolution Professional admitted the claim under the category of 'financial debt' and invited the Applicant to attend the 1st COC meeting held on 24.11.2021. ii. In the 1st COC meeting, the State Bank of India pointed out that the present Applicant cannot be a part of COC as he was a Corporate Guarantor to the Corporate Debtor and further, the Applicant is in a joint venture with the Corporate Debtor. iii. The Resolution Professional wrote an e-Mail dated 24.11.2021 to the Applicant and suspended Directors of the Corporate Debtor seeking clarification, to which, the Applicant did not reply, however, the suspended Directors of the Corporate Debtor confirmed the position of the Applicant and also confirmed that authenticity of the documents submitted before the Bank vide e-Mail dated 24.11.2021. iv. On the basis of said confirmation, the RP informed the Applicant vide e-Mail dated 25.11.202(sic), that after the meeting of 1st COC, one of the COC members -Punjab National Bank produced the documents before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Resolution Professional has submitted that the RP has not made any adjudication as alleged by the Applicant. The RP has merely re-designated the claim of the Applicant from Financial Creditor to Financial Creditor - Related party after receipt of additional documents/information from the Creditors i.e., Punjab National Bank as well as from the record of Corporate Debtor. Therefore, e-Mail dated 29.11.2021, by which, the RP has informed the Applicant about the re-designation of the claim, does not amount to adjudication. III. Issue No. 3 - Related Party Submission on behalf of Applicant 11. Mr. Abhishek Anand, Ld. Counsel, argued that the Applicant is not a related party of the Corporate Debtor in as much as the Applicant Company is not a Shareholder of the Corporate Debtor and does not have any representation on its Board of Directors, directly or indirectly. Further, the Shareholders and Directors of the Applicant Company do not have any Shareholding in the Corporate Debtor and have never represented on the Board of Directors of the Corporate Debtor. 12. Mr. Anand, Ld. Counsel submitted that the Applicant does not fall under the category of related party within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Debtor and General Power of Attorney registered on 21.2.2014, Board Resolution dated 06.8.2013, Board Resolution dated 02.4.2018, Details of Terms and condition of Sanction of Punjab National Bank, Index of charge along with Form CHG-1 created with ROC. He submitted that Punjab National Bank has recognized the applicant as a joint venture company and the Applicant- company has provided the corporate Guarantee for loan facilities availed by the Corporate Debtor from Punjab National Bank amounting to Rs. 46.81 crores. 16. It is submitted by the Mr. Saurabh Kalia that in view of the provisions and documents executed between the Applicant and the Corporate Debtor, it is amply clear that the applicant is a related party to the Corporate Debtor by virtue of clause (h), (I) and (m) of Section 5 (24) of the Code read with Section 2 (6) 2 (27) of the Companies Act, 2013. Mr. Kalia has further stated that the RP has not reviewed its decision as alleged by the applicant. RP has merely re-designated the claim of the Applicant from Financial Creditor to related party after receipt of information/documents from other Financial Creditors and from the record of Corporate Debtor. The RP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of documents received by him and re-designated the Applicant from Financial Creditor to Financial Creditor - Related party. 20. Mr. Abhishek Anand, Ld. Counsel relied upon the Judgment of Hon'ble NCLAT in the case of M/s. Dynepro Private Limited versus Mr. V. Nagarajan in Company Appeal (AT)/Insolvency No. 229 of 2018, wherein it was held that the Resolution Professional does not have the jurisdiction to decide the claim of one or another Creditor or its categorization. Mr. Anand has also relied upon the Judgment of Hon'ble NCLAT in Company Appeal (AT)/Insolvency No. 519 of 2020 in Rajnish Jain versus Manoj Kumar Singh dated 18.12.2020 wherein the Hon'ble Appellate Tribunal, while considering a case in which the Resolution Professional changed the status of a Creditor from 'Financial' to 'Operational Creditor', held that the RP cannot on its own take such a decision and shall not be entitled to suo motu to review the change of status of a Creditor from 'Financial' to 'Operational Creditor' and the Resolution Professional should have moved the Adjudicating Authority. On an analysis of these two Judgments, we find that facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Clause 6. 24. From the perusal of contents of the above-mentioned clauses of the Agreement, it is seen that both the parties will have share on profits and furthermore the brokerage will be shared by them. It is thus clear that there is a nexus between the Applicant and the Corporate Debtor and its prima-facie establishes that the Applicant is a related party of the Corporate Debtor. This fact is substantiated by the following documents: i) Irrevocable Letter of Consent dated 03.4.2013, ii) Board Resolution dated 06.8.2013 iii) General Power of Attorney iv) Board Resolution dated 02.4.2018, v) Details of Terms and condition of Sanction of Punjab National Bank, vi) Index of charge along with Form CHG-1 created with ROC. 25. From the analysis of various Clauses as referred to above contained in the Joint Venture Agreement and other documents submitted by the Resolution Professional, we have no hesitation to hold that the Applicant is a related party to the Corporate Debtor in terms of Section 5(24)(i) of the IBC. 26. In view of the findings arrived above, the IA No. 2325/2021 stands dismissed. IA-5535/2022: Since we have taken a view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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