9911796707
TMI Blog2023 (6) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... r Saleable Assets of the Company, the 1st Respondent / Resolution Professional, had no option, but to seek a Relief, for the Dissolution of the Corporate Debtor, and the fact of the matter is that the same was approved, by the Committee of Creditors - It is to be remembered that the Appellant was issued with a No Objection Certificate, dated 27.09.2018, and it has No Nexus with the present Controversy / Dispute, that the said No Objection Certificate, was no way concerned with the Corporate Debtor, because of the simple fact that it was issued to the Appellant, in his personal capacity as Corporate Debtor. One cannot remain oblivious of the candid fact that the I B Code, 2016, does not envisage that the Adjudicating Authority / Tribunal, ought to provide a Hearing to the Promoter / Corporate Debtor of the Company, at the time of passing of an Order for Liquidation. The Insolvency Resolution Process under the I B Code, 2016, is a Time Bound Process, and the Appellant / Promoter, having failed to project the Resolution Plan, within the specified time limit and later, the 1st Respondent / Resolution Professional, is not to accept any Plan - Suffice it for this Tribunal, to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of a case, justify there would not serve any purpose to keep the Corporate Debtor under regular CIRP proceedings, and thereafter under Liquidation proceedings, under the provisions of Code, the Adjudicating Authority, by exercising its inherent powers conferred under the Code, can pass appropriate order(s) in the interest of speedy justice. 6. The above facts and circumstances of the Case fully justified, that there would be no useful purpose be served, by placing the Corporate Debtor under Liquidation process, under the extant provisions of Code. Since no assets exists in the Company, as declared by the Resolution Professional, the liquidation process under the provisions of Code, is deemed to have completed under Chapter III of Part II of Code, and thus it would just and proper for the Adjudicating Authority to dissolve the Company as prayed by the Resolution Professional. The instant Application is filed in accordance with law and the Resolution to dissolve the Corporate Debtor was approved by the Sole COC, as detailed supra. and ultimately, dissolved the Corporate Debtor / M/s. Air Pegasus Private Limited , with immediate effect, and proceeded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o through the rigorous scrutiny, checks, etc., to secure the same, from the Ministry . As a matter of fact, the Appellant / Promoter, has an experience of more than 20 years in Airline Sector, more particularly the track record of the successfully running the Airlines with three Aircrafts with 29 Sectors per day, and has an exclusive and extensive exposure and experience in the field. 8. The Learned Counsel for the Appellant brings it to the notice of this Tribunal that the Appellant / Company , being the Service Industry , would not have Assets , but has the No Objection Certificate , to revive the Air Operator Permit , and in fact, the Air Operator Permit , got lapsed on 23.03.2020, and that with great difficulty, the No Objection Certificate , was secured from the Ministry of Civil Aviation , which is effective till 29.09.2021 and utilising the said Certificate of NOC , the Appellant can secure the Air Operator Permit , without any further scrutiny / checks . 9. The Learned Counsel for the Appellant brings it to the notice of this Tribunal that the Appellant was not aware of the Hearing , before the Adjudicating Authority / Tribunal , and that was not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding a suitable Investor, to fund the Company. In the interregnum, the Lockdown was imposed because of Covid-19 and from 24.03.2020 to 03.05.2020, there was a complete travel restrictions, and that, the Appellant, could not secure an Investment , from Any Source , on account of the uncertainty and turmoil , created in the Country. But the Appellant, had secured an Investment , after negotiating with the Dubai based Corporation . 16. The Learned Counsel for the Appellant points out that the 1st Respondent / Resolution Professional , had acted in great haste, ignored the Order, passed by this Tribunal , for excluding the number of days, in counting the Corporate Insolvency Resolution Process period and projected an Application / Petition , for a Direct Dissolution , without Liquidation . 17. Continuing further, the Learned Counsel for the Appellant adverts to the Judgment of the Hon ble Supreme Court of India in the matter of Committee of Creditors of Essar Steel India Limited v. Sateesh Kumar Gupta Ors. (vide Civil Appeal No. 8766-67 of 2019) wherein, the word Mandatory was struck down, as deemed manifestly arbitrary , under Article 14 of the Constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Revive the Air Operator Permit , dated 23.03.2016 (expired on 23.03.2020) nor it guaranteed the grant of AOP , because of the fact that the conditions specified for an Issuance of AOP are entirely different than mere grant of No Objection Certificate , to an Individual . 23. The Learned Counsel for the 1st Respondent brings it to the notice of this Tribunal , that mere grant of No Objection Certificate dated 27.09.2018, will not wish away the fact that the Corporate Debtor on the date of Order dated 24.06.2020, as admitted by the Corporate Debtor , in the email dated 18.12.2019, had No Asset and also the Fair Value and Liquidation Value of the Corporate Debtor was Nil , including the fact that the Corporate Debtor was Inactive , Inoperative from 2015-2016. Therefore, No Fault , can be found in respect of the Order dated 24.06.2020, passed by the Adjudicating Authority / Tribunal , resting upon the decision, taken by the Committee of Creditors with 100% voting . 24. The Learned Counsel for the 1st Respondent / Resolution Professional pertinently points out that the Appellant, out of Six Committee of Creditors Meeting , had not attended the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order dated 24.06.2020 in IA No. 198 of 2020 in CP (IB) No. 180/BB/2018, in regard to the Dissolution of the Corporate Debtor , after the Dissolution of the Corporate Debtor , was approved , by the Financial Creditor , with 100% Voting Rights . 2nd Respondent s Pleas : 30. The Learned Counsel for the 2nd Respondent contends that the 2nd Respondent / Bank in the 6th CoC Meeting, that took place on 29.05.2020, having regard to the fact that (a) there were No Realisable Financial Assets , and the only one Intangible Valuable Asset , in the nature of Air Operator Permit , which had lapsed on 23.03.2020 and the Fair Value and the Liquidation Value of the Corporate Debtor / Air Pegasus Private Limited , was Nil , Approved for Dissolution of the Corporate Debtor , and permitted the Resolution Professional , to prefer an Appropriate Petition , before the Adjudicating Authority , which was accepted by the said Authority , and by an Order dated 24.06.2020, the Dissolution of the Corporate Debtor , was approved . 31. It is projected on the side of the 2nd Respondent that since there is No Asset of the Corporate Debtor , from which the 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme of the Code. Section 31(1) of the Code lays down in clear terms that for final approval of a resolution plan, the Adjudicating Authority has to be satisfied that the requirement of sub-section (2) of Section 30 of the Code has been complied with. The proviso to Section 31(1) of the Code stipulates the other point on which an Adjudicating Authority has to be satisfied. That factor is that the resolution plan has provisions for its implementation. The scope of interference by the Adjudicating Authority in limited judicial review has been laid down in the case of Essar Steel (supra), the relevant passage (para 54) of which we have reproduced in earlier part of this judgment. The case of MSL in their appeal is that they want to run the company and infuse more funds. In such circumstances, we do not think the Appellate Authority ought to have interfered with the order of the Adjudicating Authority in directing the successful Resolution Applicant to enhance their fund inflow upfront. 29. So far as the IA taken out by the MSL is concerned, in our opinion they cannot withdraw from the proceeding in the manner they have approached this Court. The exit route prescribed in Section 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Having answered the core issues and to avoid prolixity, we do not wish to dilate on the exposition in other reported decisions relied upon by the counsel. 66. As a result, we hold that the NCLAT has justly concluded in the impugned decision that the resolution plan of the concerned corporate debtor(s) has not been approved by requisite percent of voting share of the financial creditors; and in absence of any alternative resolution plan presented within the statutory period of 270 days, the inevitable sequel is to initiate liquidation process under Section 33 of the Code. That view is unexceptional. Resultantly, the appeals must fail. 67. In view of the above, the appeals are dismissed. The companion applications also stand dismissed. No order as to costs. 36. The Learned Counsel for the Respondents, adverts to the Judgment dated 10.03.2021 of the Hon ble Supreme Court of India in Kalpraj Dharamshi Another v. Kotak Investments Advisors Limited and Another (vide Civil Appeal No. 2943 2944 of 2020), wherein at Paragraphs 154 to 158, it is observed as under: 154. This Court observed, that the Court ought to cede ground to the commercial wisdom of the creditors r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... straint on implementation of the resolution plan of Kalpraj, which was duly approved by NCLT. It is the case of Kalpraj, RP, CoC and Deutsche Bank, that during the said period, various steps have been taken by Kalpraj by spending a huge amount for implementation of the plan. No doubt, this is sought to be disputed by KIAL. However, we do not find it necessary to go into that aspect of the matter in light of our conclusion, that NCLAT acted in excess of jurisdiction in interfering with the conscious commercial decision of CoC. 158. It is also pointed out, that in pursuance of the order dated 5.8.2020 passed by NCLAT, CoC has approved the resolution plan of KIAL on 13.8.2020. However, since we have already held, that the decision of NCLAT dated 5.8.2020 does not stand the scrutiny of law, it must follow, that the subsequent approval of the resolution plan of KIAL by CoC becomes non est in law. For, it was only to abide by the directions of NCLAT. We are of the view that nothing would turn on it. The decision of CoC dated 13/14.2.2019 is a decision, which has been taken in exercise of its commercial wisdom . As such, we hold, that the decision taken by CoC dated 13/14.2.2019, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) (i) of the I B Code, 2016, had admitted the main Petition, by initiating the CIRP , against the Corporate Debtor , by appointing an Interim Resolution Professional , and declared Moratorium , etc. 42. In the Reply of the 1st Respondent / Resolution Professional to the main TA (AT) No. 8 of 2021 (Comp. App (AT) (CH) (INS.) No. 925 of 2020), it was mentioned that the Appellant , had failed to submit the Resolution Plan , within the time limit stipulated i.e., by 10.02.2020, despite the email was sent by the 1st Respondent / Resolution Professional to the Appellant on 13.01.2020. Also that, the Notice of the 6th Meeting of the CoC , was to be held on 29.05.2020, along with the Agenda papers, were served / communicated to the Appellant / Ex-Director of the Corporate Debtor / Promoter , but the Appellant , remained absent in the 6th CoC Meeting . 43. It cannot be lost sight off that the Corporate Debtor , had No Realisable Financial Assets , and the only Valuable Asset , was of Intangible in nature of the Air Operator Permit , a License , issued by the DGCA and the Validity of the said License , had lapsed on 23.03.2020. 44. It cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Time Settlement Amount , etc., and in fact, the One Time Settlement stood cancelled and as such, the Appellant on account of his breach of the One Time Settlement , cannot place reliance on the same. 50. In the teeth of the ingredients of the I B Code, 2016, the Appellant, had to furnish the Resolution Plan , within the prescribed time period and having failed in this regard, the Adjudicating Authority / Tribunal , had passed the impugned order dated 24.06.2020 in IA No. 198 of 2020 in CP (IB) No. 180 / BB / 2018, as per the tenets of the I B Code, 2016. 51. It may not be out of place for this Tribunal , to make a pertinent mention that the Hon ble Supreme Court of India in the Judgment dated 03.06.2022 (vide Civil Appeal Nos. 1811 1812 of 2022), in the matter of Vallal RCK v. M/s. Siva Industries and Holdings Limited Ors., wherein at Paragraphs 24 to 27, it is observed as follows: 24. When 90% and more of the creditors, in their wisdom after due deliberations, find that it will be in the interest of all the stake holders to permit settlement and withdraw CIRP, in our view, the adjudicating authority or the appellate authority cannot sit in an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this legislation remains robust by constantly amending it based on its experience. Consequently, the need for judicial intervention or innovation from NCLT and NCLAT should be kept at its bare minimum and should not disturb the foundational principles of the IBC .. 52. The Insolvency Resolution Process under the I B Code, 2016, is a Time Bound Process , and the Appellant / Promoter , having failed to project the Resolution Plan , within the specified time limit and later, the 1st Respondent / Resolution Professional, is not to accept any Plan. 53. Suffice it for this Tribunal , to make a pertinent mention that in the absence of any Asset(s) / the Resolution Plan(s) , the Resolution Professional, had no other go, but to pray for an Order of Dissolution , to be passed by the Adjudicating Authority . After all, the end of Liquidation , requires complete Dissolution of an Entity . 54. The other prime fact is that Air Operator Permit is required for running the operations of an Airline , but got lapsed on 23.03.2020, and in any event, it has no bearing with the Corporate Debtor / Company , since the same was issued to the Appellant , in his status as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
