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TMI Blog2022 (1) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... he Union Bank of India on 01.07.2021 and the review committee has confirmed the categorisation of applicants as wilful defaulter. The said action of categorisation of wilful defaulter was challenged by way of Writ Petition before the Hon ble Bombay High Court in SHYAMLAL JAIDEV PANCHMATIYA ANR. VERSUS UNION BANK PF INDIA ORS. [ 2021 (9) TMI 1491 - BOMBAY HIGH COURT] . This Bench has no hesitation to conclude that the CoC has rightly rejected the resolution plan submitted by the Applicant herein and that he is ineligible to submit a plan under Section 29A of the Code - Application dismissed. - IA No. 691 of 2021 in CP (IB) 3942/MB/2019 - - - Dated:- 20-1-2022 - Hon'ble Smt. Suchitra Kanuparthi, Member (Judicial) And Hon'ble Smt. Anuradha Sanjay Bhatia, Member (Technical) For the Applicant : Mr. Kunal Chheda, Advocate. For the Respondent : None. ORDER Per: Suchitra Kanuparthi, Member (J) Facts of the case: 1. The present application has been filed by Mr. Jaidev Laxmidas Panchmatia (hereinafter referred as Resolution Professional ) in his capacity as Resolution Applicant u/s. 60 (5) of the Insolvency and Bankruptcy Code, 2016 (her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating Authority has power to do so. 8. The Applicant claimed that upon perusal of Section 29 (A) (g) and (f) of the Code it is evident that Resolution Applicant does not fall under any disqualification, however, Section 240A, Section 29 (A) (c) and (h) of the Code are inapplicable to the Applicant. 9. The Applicant also claimed that no application pertaining to preferential transactions, undervalued transactions, extortionate credit transactions or fraudulent transaction have been filed before the Adjudication Authority. 10. Further, the applicant relied upon Transaction Based Audit Report dated 29.09.2020 wherein the report stated as below: based on our overall review within the lockdown period and period beyond the lockdown period to cover symptoms of section 66 under IBC, we don t have sufficient evidence or circumstantial evidence in our opinion which can be classified as PUFE Transactions (i.e. Preferential, Undervalued, Fraudulent and Extortionate transactions). However, listed aforesaid mentioned major observations in brief and detailed in below part of our reports, which we could be able to unearth on our review it appears serious lapses in internal controls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has complied with all the mandatory provisions of the Cde and further that Resolution Professional is eligible to submit the plan. 18. Therefore, the applicant prayed as follows: (a) That this Hon ble Tribunal may be pleased to declare that the Resolution Applicant is eligible to submit a resolution plan; (b) That this Hon ble Tribunal may be pleased to set aside and declare that the act of the Committee of Creditors in its failure to consider the resolution plan as illegal and bad in law; (c) That this Hon ble Tribunal may be pleased to direct the Resolution Professional and the Committee of Creditors to consider the Resolution Plan dated 4 August 2020 afresh bearing in mind the principle of maximisation of the value as envisaged under the Code; (d) Without prejudice to the above prayers, this Hon ble Tribunal may be pleased to direct Union Bank of India to disclose the following: (i) the date on which the account of the Corporate Debtor was declared as wilful defaulter and fraud as mentioned in the 7th and 8th Minutes of Meeting; (ii) the reasons/ basis/ documents/ directives on which the account of the Corporate Debtor and the Applicant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution Applicant, director, guarantor, Mr, Shyamal Panchamatia, Mr. Vijaykumar to declare them as wilful defaulter. The admission of CIRP of the Corporate Debtor was passed on 19.11.2019. The COC in its 7th meeting held on 03.10.2020 have rejected the Resolution Plan on the basis that the accounts have been declared as wilful defaulter. The CoC in its 8th meeting held on 12.11.2020 outrightly rejected the plan without even putting it to vote on the ground that the account has been declared fraud and wilful defaulter. The applicant was granted personal hearing on 24.12.2020. 24. At the outset it is necessary to examine whether applicant falls within the category of section 29A of the Code. Section 29A is reproduced below: [29A. Persons not eligible to be resolution applicant. - A person shall not be eligible to submit a resolution plan, if such person, or any other person acting jointly or in concert with such person (a) is an undischarged insolvent; (b) is a wilful defaulter in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 (10 of 1949); (c) at the time of submission of the resolution plan has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e corporate debtor by the resolution applicant pursuant to a resolution plan approved under this Code or pursuant to a scheme or plan approved by a financial sector regulator or a court, and such resolution applicant has not otherwise contributed to the preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction;] (h) has executed 4 [a guarantee] in favour of a creditor in respect of a corporate debtor against which an application for insolvency resolution made by such creditor has been admitted under this Code [and such guarantee has been invoked by the creditor and remains unpaid in full or part]; (i) [is] subject to any disability, corresponding to clauses (a) to (h), under any law in a jurisdiction outside India; or (j) has a connected person not eligible under clauses (a) to (i). [Provided that nothing in clause (iii) of Explanation I shall apply to a resolution applicant where such applicant is a financial entity and is not a related party of the corporate debtor: Provided further that the expression related party shall not include a financial entity, regulated by a financial sector regulator, if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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