9911796707
Advanced Search 
TMI Blog2022 (10) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. The facts of the case briefly are as follows: i). M/s. PP Bafna Ventures Private Limited (3rd Respondent in IA No. 54/2022 and 1st Respondent in IA. No. 53/2022) filed an Company Petition before this Tribunal under Section 7 of IBC, 2016. By virtue of an order dated 18.02.2022, this Tribunal passed an order admitting the Company Petition filed by Respondent No. 3 and initiating CIRP of the CD. Respondent No. 2 was appointed as Insolvency Resolution Process (IRP). ii). The FC filed its claim with IRP and the same was admitted. IRP sent an agenda of 1st Committee of Creditor (CoC) meeting. The Applicant was shocked to see that in the said agenda of the 1st CoC meeting, the IRP without any basis, classified Respondent No. 3 as an unrelated FC and constituted CoC by assigning 53.87% voting rights to Respondent No. 3. By virtue of the said fact, the voting right of the Applicants were diluted to 46.13% from 100%. As per Section 21 of the Code, the CoC of the CD shall comprise only of unrelated FCs of the CD. Respondent No. 2 ought to have treated the FC as a related party of the CD, falling within the definition under Section 5(24) of IBC. iii). Respondent No. 3 entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections to IBBI to enquire into the misconduct of Respondent No. 2 in the CIRP of the CD and to initiate appropriate disciplinary proceedings in order to protect the sanctity of the profession of Insolvency Professionals and also that of the CIRP. 3. Respondent No. 3 filed separate counters in the IAs, but however the contentions are the same. The background history of the agreements between Respondent No. 3 and the CD is narrated which infact is not in dispute. The para wise reply to the Application can be stated as they are the averments which are relevant to decide this Application. The allegations made against Respondent No. 3 are denied. It is further stated that by virtue of the order dated 18.02.2022, this Tribunal observed various breaches of the SSHA and concluded that Articles of Association (AoA) of the CD was not altered to reflect the provisions of SSHA. The failure of the promoters to duly amend the AoA of the CD has caused the 3rd Respondent to be a mere paper tiger, with none of the powers and privileges promised under the agreements. 4. The IRP has inducted the 3 rd Respondent into the CoC on the basis of sound, reasoning. It is evident further that the nominees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have resigned from the position of directors on 11.02.2022 due to sustained non filing of balance sheets of the CD is absolutely false. The nominees of "Bafna" were representing 50% of the board of the CD and could have very well taken steps to file balance sheets and annual returns. The IRP in his counter stated that having regard to the details as per the RoC records as on the ICD i.e., 18.02.2022, he found that the directors of "Bafna" were not the directors of the CD as they resigned on 11.02.2022, which is a blatant lie. As no E-Form DIR-12 has been filed by the CD for resignation of directors on 11.02.2022, the E-Form DIR-11 i.e., form for communication of resignation by resigning director was filed only on 04.03.2022. It is only upon the filing of the E-Form DIR-11, that the ROC will affect the change in the directors on its portal and not before that. Therefore, it is obvious that as on 18.02.2022 the names of the directors of "Bafna" are still shown as directors of the CD. The IRP ought to have seen through the game plan of "Bafna" that by back dating the resignation letters by way of filing of E-Form DIR-11 on 04.03.2022, "Bafna" is trying to get the seat and voting shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l creditor and the corporate debtor. As such, the financial creditor who is in praesenti not a related party, would not be debarred from being a member of COC. There is absolutely no quarrel with the above proposition. The quarrel is on the service of the Resignation letter on the Company as mandated by section 168 of the Companies Act, until which time the resignation does not come into effect. The counsel for the Applicant contends that the resignation allegedly tendered by "Bafna" i.e., Mr. Praful Prakash Bafna and Mr. Yogesh Prakash Bafna did not come into effect since it was not sent to the Company in accordance with Section 168 of the Companies Act, 2013. The contention of "Bafna" is that the resignation letter was sent through courier on 11.02.2022 and hence it has come into effect from the date on which it is served on the Company. The track record of the courier service was placed before this Tribunal, according to which the information pertaining to this particular courier could not be furnished to the Applicant. "Bafna" however furnished the information which unfortunately shows that the consignment which was booked on 11.02.2022 by "Bafna" could not be delivered due to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post" Hence, Section 27 of the General Clauses Act, 1897 under which the notice has to be served by post cannot be applied to a service by courier. Apart from that, the Counsel for the FC submits that the pin code number mentioned in the track record and the one mentioned in the address shown in the application are different. The resignation notice was sent to an address with pin code number 53016 as reflected in the track record of the courier service, whereas the pin code pertaining to the registered address of the FC is 532016 as per the application. Obviously notice is served in the application, which shows that the pin code in the application is the correct one. Hence, in view of the above lapses on the part of "Bafna" in not serving the notice of resignation to the CD, it cannot be said that the notice of resignation was served on the Company as required under the Companies Act. 11. By virtue of the notice of the resignation not reaching the Company, "Bafna" continues to be nominee director in the CD and hence his status as related party does not cease. Apart fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of Bafna, like failure to finalise Annual Business plan, wrongful stoppage of factory etc, which imply that Bafna has been in considerable control of the affairs of the CD. No finding in that regard is given by this tribunal or any other forum, One of the allegations made by Bafna in section 7 application is that the CD had withdrawn various amounts without the consent of Bafna. Withdrawals were upheld as having been done unilaterally and was considered as a breach. But at the same time, the said allegation and finding would show that the consent of Bafna is required for the withdrawals, which consequently shows that Bafna had control over the affairs of the CD. In ASK investments case, the intent behind the first proviso to section 21(2) of the code, which disqualifies the financial creditor or his representative is explained as to see that the related parties do not sabotage the COC and to obviate conflicts of interests that are likely to arise if a Related party is allowed to be part of COC. Though Bafna is an FC as held in section 7 petition filed by it and though it became entitled to recall the ICD due to the breaches committed by the CD, the agreements nevertheless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an independent and reputed law firm before constituting the COC. His contention is that he has acted bona fide and that he is unnecessarily made a scapegoat. It is possible that Mr. Praful Bama and Mr. Yogesh Bafna might have informed the IRP that they have tendered their resignation on 11.02.2022 and that the IRP might have believed the same, without proper verification. Since the date of resignation is being reflected as 11.02.2022 in the letter of resignation, there is a possibility of the IRP understanding the date of resignation as 11.02.2022, Though little due diligence might have revealed the truth, it cannot be said that the IRP, apart from being negligent, had conspired with Bafna and allowed them into the Coc. However, apart from the said mistaken understanding by the IRP, there is no material which would suggest that the IRP had done so with any mala fide intention of helping Mr. Praful Bafna and Mr. Yogesh Bama in becoming part of COC. IRP is hereby cautioned to be vigilant hereafter. This would be a stricture when his performance comes into question in future. 15. The allegation that Bafna had purposefully misled the IRP does not receive much support. The affidavit of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
