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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 ..... ech Projects (P) Limited, the Corporate Debtor seeking directions against Mr. Ravinder Kumar Goel, the Resolution Professional for the Corporate Debtor for unjust and arbitrary removal of the Applicant from the Committee of Creditors. 3. Since the facts and issues involved in both the IAs are similar and interrelated, we have taken up these IAs for hearing together. 4. For the sake of convenience, IA-2325/2022 is taken up as the lead matter. The issues involved in this IA are- (i) Whether the Resolution Professional has the power to suo moto review, modify or vary the claim of a creditor once the same has been admitted/verified by IRP/RP (ii) Whether action of the Resolution Professional in the instant case in removing the Applicant as a member of the COC is adjudicatory in nature or otherwise and whether it amounts to review of his decision. (iii) Whether the Applicant can be held to be a related party of the Corporate Debtor in the facts & circumstances of the present case. 5. It is the admitted case of both the parties that this Tribunal vide Order dated 25.10.2021 admitted Company petition No. IB-292/ND/2021 filed under Section 9 of IBC, 2016 for initiating CIRP on be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant is not a Shareholder of the Corporate Debtor and has no representation on the Board of Directors of the Corporate Debtor. Further, even the Shareholders and Directors of the Applicant do not have any shareholding in the Corporate Debtor and never represented the Directors of the Corporate Debtor and the only relationship between the Applicant and the Corporate Debtor is that of Creditor and Debtor because the Applicant extended the financial assistance of Rs. 11 crores to the Corporate Debtor in terms of MOU dated 26.11.2012, as per which, the Corporate Debtor is under an obligation to pay the Applicant with 13.5% of the gross revenue of its entire project of 6.45 acres for development of the land. Therefore, the Applicant requested the respondent/RP to re-consider its decision of classifying the Applicant as a related party. 8. The Respondent Resolution Professional has filed a detailed reply affidavit to the present IA raised various contentions/objections. The objections which are relevant for the purpose of determination of the issue involved in the present case are as follows: i. It is stated in the reply that the Applicant did not disclose the facts that he is a rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18.12.2020 in Company Appeal (AT)/Insolvency/519/2020 and Bijoy Prabhakaran Pulipra versus State Tax Officer (Works Contract) in Company Appeal (AT)/Insolvency No. 42 of 2021. Relying upon the said judgments rendered by Hon'ble NCLAT, Mr. Anand submits that the RP is not empowered to revise the claim and the RP has acted contrary to the law in revising the claim of the Applicant from Financial Creditor to Related party. He further submitted that in view of the settled position of law as held by Hon'ble Supreme Court in the case of Swiss Ribbons versus Union of India & Ors. (2019) 4 SCC dated 25.1.2019, the IRP/RP does not have any adjudicatory power. He has also relied upon the Judgment dated 01.2.2019 passed by Hon'ble Appellate Authority in the case of Prasad Gempex versus Star Agro Exports Private Limited in Company Appeal (AT)/Insolvency/291 of 2018 wherein it has been held that the RP does not have the adjudicatory powers and has to vet & verify the claims and determine the amount of such claim. Submission on behalf of IRP/RP Mr. Saurabh Kalia, Ld. Counsel for the Resolution Professional has submitted that the RP has not made any adjudication as alleged by the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venture company of the Corporate Debtor. Mr. Kalia, Ld. Counsel submitted that the Applicant is a related party as envisaged under Section 5 (24) (i) of IBC, being a Joint Venture Company, by virtue of the Joint Venture Agreement entered into by the Applicant with the Corporate Debtor. He submitted Section 5(24) (i) defines 'Associated Company' of the Corporate Debtor to be a related party. He further referred to Section 2 (6) of the Companies Act, 2013 which defines 'Associated Company' which is quoted below: "(6) "associate company", in relation to another company, means a company in which that other company has a significant influence but which is not a subsidiary of the Company having such influence and includes a Joint Venture company." (b) the expression "joint venture" means a joint agreement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement". 15. He also relied upon the several documents i.e., the Irrevocable Letter of consent given by the Applicant in favour of the Corporate Debtor and General Power of Attorney registered on 21.2.2014, Board Resolution dated 06.8.2013, Board Resolution dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. Further, the IRP/RP are also guided by the CIRP Regulations while verifying the claims and determining the amount of such claims. The relevant provisions which come into play are Regulations 10, 12, 13 & 14 of the CIRP Regulations. 19. It is clear from the aforesaid provisions that IRP/RP has to collate and verify the claims and determine the amount of such claims. Hon'ble Supreme Court in its judgment in the case of Swiss Ribbons versus Union of India & Ors. (2019) 4 SCC dated 25.1.2019, clearly held in paragraph 59, which is as under: "It is clear from a reading of these Regulations that the Resolution Professional is given administrative power as opposed to quasi-judicial powers." From the records of the case, we 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. 20. Mr. Ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Bank which is supported by State Bank of India as well as by the promoters of corporate debtor. Issue No. 3 23. We have perused the Joint Venture Agreement which has been entered into between M/s. Sandwoods Infratech Projects (P) Limited being the Corporate Debtor herein and M/s. Revolution Infocom Private Limited, the Applicant herein. We will deal with some of the clauses of the JVA which are relevant- Clause 5 of the JVA says that the project, in question, will be developed and marketed by 1st party i.e., corporate debtor at its own cost and expenses. The selling price of the units of the project shall be decided with the mutual consent of the parties. Clause 6 of the Agreement stipulates that the first party will have 86.5% of the Share and the second party (Applicant)will have 13.5% of the Share on profits. Clause 7 of the said Agreement says that this project will be marketed by first party, however, the brokerage will be shared between the first party and the second party in the same ratio as mentioned 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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