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TMI Blog2022 (11) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... ution Applicant in the CIRP of the Corporate Debtor. The Appellant has filed Section 7 Application on behalf of Damayanti Tea Industries which is a separate company registered under the Companies Act - The Section 7 Application filed by Damayanti Tea Industries has no concern with the subject matter of CIRP of the Corporate Debtor. No prohibition can be read in the statutory provision governing appearance of an Advocate in representing a different company in separate proceedings filed under Section 7. The present is not a case that Appellant has appeared for Resolution Professional and Resolution Applicant i.e. Respondent No.4 in the CIRP of the Corporate Debtor. The Appellant has made out a case for directing expunction of adverse remarks contained in the judgment dated 08.04.2022 - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... started representing Resolution Professional. It was only Respondent No.4 who submitted Resolution Plan which came to be discussed by the CoC in its meeting dated 18.09.2020, 08.10.2020 & 06.11.2020. The Resolution Plan of Respondent No.4 was approved by the CoC and on 12.11.2020, Application was filed by the Resolution Professional before the Adjudicating Authority for approval of the Resolution Plan. On 11.01.2021, the Appellant was approached by one Mr. Shyamal Deb on behalf of 'Damayanti Tea Industries' for filing a Section 7 Application against an entity 'Bochapathar Tea Estate'. An Application under Section 7 of the IBC being CP(IB) No. 5/GB/2021 was filed by 'Damayanti Tea Industries' through its authorised signatory by the Appellant as Advocate for 'Damayanti Tea Industries'. On 10.02.2021, the Adjudicating Authority allowed IA No. 5/2021 filed by the Respondent No.1 to submit a Resolution Plan in the CIRP of the Corporate Debtor. The Resolution Plans submitted by Respondent Nos. 1 and 4 were again considered by the CoC in its meeting dated 25-28th May and 01st June, 2021 and Resolution Plan of the Respondent No.4 was approved upon voting. On 06.08.2021, Respondent No.1 fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said matter till the disposal of the Application on 23/08/2021. The R3 has become the Advocate for both during the period of CIRP. Confidentiality matters in Insolvency proceedings and undertaking the assignments by an Advocate from both the sides during the CIRP under IBC is not justified. 20.2. It is observed that the R1, R2, R3, R4 were entirely focusing on one point in their submissions, pleadings and arguments during the entire proceedings that the jurisdiction of the Hon'ble Adjudicating Authority is limited to the statutory provisions of the Code, which does not vest the Hon'ble Adjudicating Authority with any equity jurisdiction to entertain a challenge against a CoC approved resolution plan. We are well aware of the provisions of IBC and judgments of the Hon'ble Supreme Court in the matter but the fact is that the process of CIRP is tainted from the second roll-out of EOI, then the stages of Commercial wisdom of the CoC and the approval of the Resolution Plan by the CoC do not arise. 20.3. Hence, considering the points mentioned above including the observations made in the points no points no 14 to 20.2 We are of the considered view that the provisions of the I&B C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly conflict of interest. 7. Learned Counsel for the parties placed reliance on few judgments which shall be referred to while considering the submissions in detail. 8. We have considered the submissions of Counsel for the parties and perused the records. 9. The basis of observations made by the Adjudicating Authority is the fact that the Appellant who was appearing for the Resolution Professional in the CIRP of the Corporate Debtor has also filed an Application under Section 7 on behalf of 'Damayanti Tea Industries', which is a unit of CCIPL. CCIPL is promoter of the Respondent No.4 (Resolution Applicant). The observations made by the Adjudicating Authority in paragraph 17.3 gives an impression that Appellant has appeared both for Resolution Professional and Resolution Applicant in the CIRP of the Corporate Debtor, which is not the fact of the matter. The Appellant was not appearing for Respondent No.4 which is a Resolution Applicant in the CIRP of the Corporate Debtor. The Appellant has filed Section 7 Application on behalf of 'Damayanti Tea Industries' which is a separate company registered under the Companies Act. The copy of the Application filed under Section 7 has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any Rules of Etiquette or can lead to any conflict of interest in the CIRP of the Corporate Debtor. The very basis of the observations made by the Adjudicating Authority is unfounded. 13. The Hon'ble Supreme Court in "Neeraj Garg vs. Sarita Rani- (2021) 9 SCC 92" has made following observations in paragraphs 15 to 18:- "15. While it is of fundamental importance in the realm of administration of justice to allow the judges to discharge their functions freely and fearlessly and without interference by anyone, it is equally important for the judges to be exercising restraint and avoid 5 (2005) 6 SCC 767 6 1982 SCC SL SC 20 unnecessary remarks on the conduct of the counsel which may have no bearing on the adjudication of the dispute before the Court. 16. Having perused the offending comments recorded in the High Court judgments, we feel that those could have been avoided as they were unnecessary for deciding the disputes. Moreover, they appear to be based on the personal perception of the learned Judge. It is also apparent that the learned Judge did not, before recording the adverse comments, give any opportunity to the Appellant to put forth his explanation. The remarks so reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Hon'ble Supreme Court laid down that where Counsel forms an opinion that a conflict of interest exists, his duty is to advise the client that he should engage some other lawyer. In paragraphs 30, 31 and 32, following has been laid down:- "30. It is not in accordance with professional etiquette for one advocate to hand over his brief to another to take his place at a hearing (either for the whole or part of the hearing), and conduct the case as if the latter had himself been briefed, unless the client consents to this course being taken. Council's paramount duty is to the client; accordingly where he forms an opinion that a conflict of interest exists, his duty is to advise the client that he should engage some other lawyer. It is unprofessional to represent conflicting interests, except by express consent given by all concerned after a full disclosure of the facts. 31. Nothing should be done by any member of the legal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity, honesty and integrity of the profession. Lord Brougham, then aged eighty-six, said in a speech, in 1864, that the first great quality of an advocate was ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge by the Appellant to various observations made against him in the order dated 16.10.2019 and that he did not appear before the Adjudicating Authority on 13.11.2019 despite an order dated 11.11.2019 and was sitting outside the court room and staff of the court had requested him to appear and then appeared suddenly when adverse comments were recorded goes to speak about the personality of the Appellant against whom the observations have been made." 18. The observations were made against the Resolution Professional in the above case and not against any Advocate appearing for the Appellant. The fact which has been noticed in the judgment speaks for itself. The above judgment does not render any help to the Respondents in the present case. 19. In view of the foregoing discussions, we are of the view that Appellant has made out a case for directing expunction of adverse remarks contained in the judgment dated 08.04.2022. Paragraphs 16 and 17 noticed the submissions of the Appellant and observations of the Adjudicating Authority are only contained in paragraph 17.3. We direct deletion of the observations made in paragraph 17.3 and clarify that the observations made in paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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