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TMI Blog2022 (11) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... CoC and they did not raise any objection, therefore, it was deemed approval to hold that no such provision is there in Section 28, the finding recorded by the Adjudicating Authority in the impugned order is approved. Submissions made by the Appellant that they have rendered services and the erstwhile RP is to be blamed is not the subject matter of this application because the fact remains that the erstwhile RP made the payments to the present Appellants which has been ordered to be reimbursed regarding which no approval of the CoC was taken in terms of Section 28(3) of the Code. Appeal dismissed. - Company Appeal (AT) (Ins.) No. 472 of 2022 - - - Dated:- 15-11-2022 - [Justice Rakesh Kumar Jain] Member (Judicial) And [Dr. Alok Sriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was appointed as the Interim Resolution Professional (IRP) who was later on confirmed as RP on 08.08.2017. The Resolution Plan of the Corporate Debtor was approved by the CoC on 19.04.2019. K.G. Somani (RP) was removed vide an order passed in I.A. No. 18/CTB/2019 on 21.04.2019 and Respondent No. 1 was appointed as RP of Ferro Alloys Corporation Ltd. (Corporate Debtor) vide order dated 08.07.2019 passed by the Adjudicating Authority. After his appointment as RP, the Respondent No. 1 came to know that some payments have been made to the related parties by the erstwhile RP without approval of the CoC. The Respondent No. 1 sent an email dated 04.10.2019 to the erstwhile RP seeking explanation for the related parties transaction made during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the Key managerial personnels namely, Shri R. K. Saraf,(Respondent No. 6); Shri Manoj (Respondent No. 4), MD; Shri Rohit Saraf, (Respondent No. 5); and Shri Vinod Saraf (Respondent No. 7), President; towards remuneration to directors. 3. It is further alleged that in the 31st Meeting of CoC held on 11/12.11.2019 it was brought to the notice of the CoC that the payments of around Rs. 2,30,76,157 were made to the Respondents in the application despite the members of the CoC rejected the approval of the payments to the related parties. It is alleged that the CoC thereupon directed the Respondent No. 1 to file an application before the Adjudicating Authority for reversal of impugned related party transactions and return of the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... da item no. 8 relating to the accounts placed before the CoC and explained by the RP which includes the disputed amount. It is submitted that the action should have been taken at that time by the CoC. It is further submitted that in so far as the Appellants are concerned, they cannot be penalised because they have rendered services and if there is a fault then it is on the part of the erstwhile RP. It is also argued that the amount in question cannot be claimed after such a long time with interest @ 12 % without the allegations of fraud on the part of the Appellants. 5. On the other hand, Counsel appearing on behalf of Respondent No. 1 has argued that all the payments have been made to the related party and in this regard he has referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce, the resolution professional, during the corporate insolvency resolution process, shall not take any of the following actions without the prior approval of the committee of creditors namely: - (a) raise any interim finance in excess of the amount as may be decided by the committee of creditors in their meeting; (b) create any security interest over the assets of the corporate debtor; (c) change the capital structure of the corporate debtor, including by way of issuance of additional securities, creating a new class of securities or buying back or redemption of issued securities in case the corporate debtor is a company; (d) record any change in the ownership interest of the corporate debtor; (e) give instru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editors in the manner as required in this section, such action shall be void. (5) The committee of creditors may report the actions of the resolution professional under sub-section (4) to the Board for taking necessary actions against him under this code. 8. The bare reading of the aforesaid provision provides that it starts with a nonabstante clause and further says that the resolution professional, during the CIRP, is not supposed to take the actions mentioned in Section 28(1)(a) to(m) without the prior approval of the CoC. Section 28(1)(f) prohibits any related parties transaction without prior approval of the CoC. Section 28(2) says that the RP shall convene a meeting of the CoC and seek their vote for taking any of the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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