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TMI Blog2022 (9) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... s no option but to pass an order for liquidation. The word shall in sub-section (2) has been inserted and as such on being intimated by the RP, in the present case, the COC has resolved for liquidation in terms of sub-section (2) of Section 33 and as such the Adjudicating Authority was having no option but to pass order for initiation of the liquidation proceeding. Moreover, on examination of the impugned order itself it is evident that there was complete non-cooperation by the appellants who were suspended directors of the corporate Debtor. The appeal stands dismissed without cost. - COMPANY APPEAL ( AT ) ( INS ) NO. 822 / 2021 - - - Dated:- 9-9-2022 - (Justice Rakesh Kumar) Member (Judicial) And (Dr. Ashok Kumar Mishra) Member (Technical) For the Appellant : Mr. Vikas Mehta, Mr. Ashish Choudhury, Mr SC Dass and Mr Anand Kamal, Advocates For the Respondent : Mr Mohak Sharma and Mr Abhishek Anand, Advocates JUDGEMENT JUSTICE RAKESH KUMAR, MEMBER (JUDICIAL) The present appeal has been preferred under Section 61 of Insolvency Bankruptcy Code, 2016 (hereinafter referred to as the IBC) by two Appellants claiming to be ex-Directors of M/s Gupta Marriage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 53 of 1BC, 2016. IV. Mr. Nitin Narang is directed to issue Public Announcement stating that the Corporate Debtor is in liquidation, in terms of Regulation 12 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. V. Since this Liquidation Order has been passed, no suit or other legal proceedings shall be initiated by or against the corporate Debtor without prior approval of this Adjudicating Authority save and except as mentioned in sub section 6 of the Section 33 of the Code VI. This Authority makes it clear that Para (V) herein above shall not apply to legal proceedings in relation to such transactions as notified by Central government in consultation with any financial sector regulator. VII. This liquidation Order shall be deemed to be the notice of discharge to the officers, employees, workmen of the Corporate Debtor except to the extent of the business of the Corporate Debtor is continued during the liquidation process by the Liquidator. VIII. The Counsel and erstwhile RP are directed to communicate this Order to the Registrar of Companies, NCT of Delhi Haryana, to the Insolvency and Bankruptcy Board of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets and Enforcement of Security Interest (SARFAESI) Act, 2002 was sent which was followed by issuance of notice under Section 13(4) of the Act. However, in the meanwhile on the request of the Corporate Debtor on 31.03.2017 the same was re-structured as follows:- Facility Restructured amount OD 4,50,00,000.00 Term Loan-1 1,79,66,986.22 Term Loan-2 6,78,89,143.00 WCTL 65,97,200.00 FITL 1,75,06,940.00 Total 15,49,60,269.22 It was asserted by the Punjab National Bank/Respondent No.3/Financial Creditor that despite acknowledgement of debt by Corporate Debtor it remained outstanding. Subsequently, the petition under Section 7 of the IBC was filed and the same was admitted. Despite the notices were validly served on the Corporate Debtor, the Corporate Debtor did not enter appearance and as such the Adjudicating Authority proceeded with the matter ex parte against the Corporate Debtor a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench of this Tribunal has stayed imposition of fine by its order dated 11.04.2022. Learned counsel for the Respondent submits that the said appeal is still pending. Learned Counsel for the Respondent has raised preliminary objection on the point of maintainability of the present appeal. He has argued that Appellants who are claiming to ex-directors are not entitled to maintain the present appeal. According to Learned Counsel for the Respondent after initiation of liquidation proceeding officers/employees of the Corporate Debtor are considered to under discharge notice and as such it is fit case to be rejected on the ground that the appellants are incompetent to pursue the present appeal. Besides hearing Learned Counsel for the parties we have minutely examined material available on record. Before proceeding further it would be appropriate to reproduce the impugned order as follows:- 1. Under consideration is an Application filed by the Resolution Professional viz., Mr. Mahesh Bansal (hereinafter referred as Applicant ), under Section 33 (2) of the Insolvency and Bankruptoy Code, 2016 (hereinafter referred as the IBC, 2016 ) seeking liquidation of the Corporate Debtor viz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Suspended Directors to the Applicant. 6 The Applicant appointed M/s. Raj Gupta Co., Chartered Accountants and 1BA approved Forensic Auditor, Ludhiana as the Transaction auditor of the Corporate Debtor, however the transaction audit has not been carried out due to non-availability of the information. The RFRP, eligibility criteria, Evaluation Matrix etc., were prepared and were approved in the 2nd CoC Meeting. The Applicant published Form -G, Invitation for Expression of Interest in two newspapers namely Financial Express' (English) and Jansatta' (Hindi) on 28.12.2019. The Applicant had received 2 responses, till the last date of submission however, none submitted Resolution Plans. The 3rd CoC Meeting was convened on 03.03.2020 wherein, the COC approved the Revised Form-G (with extended timelines) and RFRP, eligibility criteria, Evaluation Matrix etc., remaining unchanged. The revised Form -G was published on 10.03.2020 in two newspapers namely 'Financial Express' (English) and 'Jansatta' (Hindi). The Applicant had received 6 responses, till the last date of submission however, none submitted Resolution Plans. In the 4th CoC Meeting held on 27.05.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ang whose name appears in the list of the Insolvency Professionals provided by the BBI to NCLT Delhi, having Registration number: 1BB/IPA-002/1P NO0828/2019-2020/12629 E-mail ID: [email protected] II. The Resolution Professional viz., Mr. Mahesh Bansal is discharged as he has not given consent and is directed to handover the charge to the Liquidator appointed by this Authority. III. Mr. Nitin Narang is appointed as Liquidator in terms of Section 34 (1) of BC, 2016. Therefore, all the powers of Board of Directors, key Managerial Personnel, and partners of the Corporate Debtor, as the case may be, shall cease to have effect and shall be hereby vested with the Liquidator. The Personnel of the Corporate Debtor are hereby directed to extend all corporations to the Liquidator as may be required in managing the affairs of the Corporate Debtor. The Insolvency Professional appointed as Liquidator will charge fees for the conduct of liquidation proceedings in the proportion to the value of the liquidation estate assets as specified under Regulation 4 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and the same shall be paid to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iquidation Process) Regulations, 2016. XIV. Copy of this Order shall be sent by the Counsel and erstwhile RP to the financial creditor, corporate debtor, and the Liquidator for taking necessary steps. 10. In terms of the above, IA/5289(ND)2020 filed in IB-728(ND) is allowed. On going through the impugned order it is evident that CIRP was initiated long back on 03.09.2019. As per scheme of IBC and also statutory provisions mentioned therein, such proceeding is required to be concluded within a specified time. The impugned order quoted hereinabove reflects that even after expiry of statutory period 90 days further time was granted but no resolution plan could be approved. In such situation the RP was having no alternative than to proceed with a petition under Section 33(2) of the IBC. At this juncture we propose to reproduce Section 33(2) as follows:- S.33(2) Where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors approved by not less than sixty-six per cent, of the voting share to liquidate the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained as suspended directors. The suspension of director of a Corporate Debtor comes to an end after conclusion of proceeding initiated either under Section 7 and Section 9 of IBC. Once liquidation proceeding is initiated under Section 33(2) of IBC, officers/employees and workmen of the Corporate Debtor shall be deemed to be under discharge notice. Section 33(7) of IBC is reproduced hereinbelow: S. 33(7) The order for liquidation under this section shall be deemed to be a notice of discharge to the officers, employees and workmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation process by the liquidator. Admittedly in the present case liquidation proceeding has already been initiated and as such the claim of the appellant as suspended director has ceased to be in existence. However, without recording any specific finding on the maintainability of the appeal by the appellant since we have noticed no error in the impugned order rather satisfied with the reasoning of the Adjudicating Authority in the impugned order there is no reason to pass order in favour of the appellant. Accordingly the appeal stands dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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