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TMI Blog2023 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the order impugned passed by the Adjudicating Authority - impugned order affirmed - appeal dismissed. - Company Appeal (AT) (Insolvency No. 346 of 2021 - - - Dated:- 27-2-2023 - [ Justice Anant Bijay Singh ] Member ( Judicial ) And [ Barun Mitra ] Member ( Technical ) For the Appellant : Ms. Purti Gupta, Ms. Heena George, Ms. Shivani Sharma , Advocates For the Respondent : Ms. Surbhi Sharma, Ms. Radhika Gautam, Advocate for R-1. Mr. Ishan Shah, Advocate for R-2. Mr. Karan Valecha, Advocate for Intervenor - PNB JUDGMENT Justice Anant Bijay Singh ; The instant Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (for short IBC) has been preferred by the Appellant being aggrieved and dissatisfied by the order dated 06.04.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench) in CP (IB) No. 848 of 2019 and IA No. 147 of 2021 whereby petition under Section 7 of the IBC filed by Respondent No. 1 (herein) Invesco Asset Management (India) Private Limited/Financial Creditor against the M/s Sintex Industries Limited/Corporate Debtor was admitted by the Adjudicating Authority and further I.A. No. 147 of 2021 fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case that Nupur Tainwala is Assistant Vice President-Legal of the Financial Creditor (being the debenture holder or the debenture trustee), but is in fact Assistant Vice President-Legal of Invesco Asset Management (India) Pvt. Ltd. (who is not a Financial Creditor), but has filed the insolvency application in its capacity as a purported delegate of the purported power to file the present insolvency application pursuant to purported board resolution given by purported trustee of the fund, being Invesco Trustee Private Limited. v) Further fact of the case is that the Respondent No. 1/Financial Creditor in its capacity as the Investment Manager for Invesco India Credit Risk Fund, a scheme of Invesco mutual Fund and duly authorised by Invesco Trustee Private Limited, in pursuance of the Investment Management Agreement dated 27th April, 2006, acting in its capacity as the Investment Manager, granted Rs. 15,00,00,000/- being 150 secured non-convertible debentures of face value of Rs. 10,00,000/- each bearing ISIN INE429Co7507 and bearing coupon of 10.70% p.a. and aggregating to Rs. 15,00,00,000/-. The Corporate Debtor defaulted on the due date mentioned in the total principal amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a who does not hold any position in relation to the financial creditor, who as per the case of the Respondent No. 1 itself, is one Invesco Trustee Private Limited and hence the insolvency application not having been filed by any person having position with or in relation to the financial creditor, is not maintainable and the same is liable to be dismissed on this ground itself. This Tribunal in the case of Palogix Infrastructure Pvt. Ltd. further holds that this kind of delegation of power, wherein the financial creditor delegates its power to another person to file an insolvency application, is not permitted on the ground that because this Tribunal referring to Section 65 of the Code, such delegate of power cannot be punished and hence application/petition in this form by delegation of power to a 3rd party, cannot be permitted and the person signing the insolvency application must hold a position with or in relation to the financial creditor. 5. It is further submitted that the Respondent No. 1 herein, being Invesco Asset Management (India) Pvt. Ltd. is effectively a 3rd party vis- -vis the purported financial creditor, being the Invesco Trustee Private Limited and the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments placed on record to substantiate any kind of default under the transactions in question and hence the insolvency application allowed vide the impugned order deserves to be dismissed. 8. It is further submitted that last notice dated 01.10.2019 issued by the Respondent No. 1 herein through their Advocate (at page 540 of the Appeal), the Respondent No. 1 has filed the insolvency application, not with a view to resolve the debts of the Corporate Debtor but filed with the view to arm twist the Corporate Debtor into illegally extorting moneys from the Corporate Debtor before the maturity date would arrive. The Corporate Debtor is a going concern and has an annual turnover of manufacturing of approx. Rs. 1800 crores taking into account the last three financial years and that its employees nearly 4,930 employees including their housing and daily meals and in the event the insolvency application is admitted against the Corporate Debtor, then the future of all such employees will also be at stake. 9. It is further submitted that the Corporate Debtor had also filed application being I.A. No. 38 of 2021 seeking to take its reply on record in main Company Petition (IB) No. 848 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuant to a Put Option exercised under the Debenture Trust Deed, with respect to the Debentures. 11. It is further submitted that the Section 7 application has been duly filed and is maintainable. The Appellant reliance on Palogix Infrastructure Judgment does not take his case any further. The Appellant has contended that the Section 7 application was not maintainable as it was not in compliance with the judgment of this Tribunal in Palogix Infrastructure Pvt. Ltd. V. ICICI Bank Ltd., 2017 SCC OnLine NCLAT 266 . The said judgment does not take the case of Respondent No. 1 any further. In particular, the following may be noted: The Judgment was passed on 20th September, 2017, it is based on the version of Section 7 that existed prior to its amendment by the Insolvency and Bankruptcy (Second Amendment) Act, 2018. Thus, the words in Section 7(1) expressly allowing specified persons to file applications under Section 7 on behalf of a financial creditor had not been introduced at the time of the judgment. This Tribunal decided the question of whether a constituted attorney of a company could file an application under Section 7 (para 3). In the present Appeal, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessor of Respondent No. 1, as the manager of the assets of the Mutual Fund Scheme (at page 83 of the Appeal). The said appointment as manager has been made under the Investment Management Agreement dated 27th April, 2006. Under Clause 5(xiv) and (xv) of the aforesaid Investment Management Agreement, Respondent No. 1 has the necessary authorization to file the present petition (at page 93 of the Appeal). It is pertinent to note that an Investment Management Agreement is entered into under Regulation 18(1) and 18(2) of the SEBI (Mutual Fund) Regulations, 1996 and has statutory force. Thus, Respondent No. 1 had the necessary authority to file the Section 7 Application. Further, the locus of an asset management company to initiate the CIRP on behalf of a Mutual Fund has also been recognized in the report of the Insolvency Law Committee dated 26th March, 2018 where in footnote 65 read with paragraphs 9.1 and 9.3 it has been observed that Alternate Investment Funds, Mutual Funds, Real Estate Investment Trusts, Infrastructure Investment Trusts may file for CIRP through their trustee, asset management company, etc. The Respondent No. 1 has the authority to invest funds on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Tribunal cannot be set aside on the basis of Rule 89. No prejudice could have been caused to the Appellant due to the absence of the Corporate Debtor at the pronouncement of the order. The impugned order was published on the website of the Tribunal and admittedly came to the knowledge of the Corporate Debtor within two days of its pronouncement. There was no insufficiency of notice or impropriety of process in pronouncement of the impugned order. 16. Further, in terms of the order dated 06.12.2022, the Ld. Counsel for the Respondent No. 2 / Interim Resolution Professional (for short IRP ) have filed the Progress Report, progress of CIRP proceedings, whereby it is stated that 21st Committee of Creditors meeting was convened on 02nd March, 2022 wherein members representing 98.88% in value members representing 1.12% in value abstained from voting and thereby 100% voted for approval of resolution plan submitted by Reliance Industries Limited jointly with Assets Care and Reconstruction Enterprise Limited and the same is pending before the Adjudicating Authority for approval of the resolution plan. 17. I.A. No. 1933 of 2021 has been filed in the instant Appeal by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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