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TMI Blog2023 (8) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... wo Appeals have been filed against the same judgment dated 25.07.2023 passed in I.A. No. 1571 of 2023 filed by Tejinder Pal Setia in CP(IB) No.248/CHD/2019 for closing the CIRP process. Tejinder Pal Setia is a member of suspended Board of Directors of the Corporate Debtor - Chandigarh Overseas Pvt. Ltd. Jagbir Singh (Appellant in Company Appeal (AT) (Insolvency) No.1035-1036 of 2023) also claim to be member of suspended Board of Directors. It shall be sufficient to refer to pleadings in Company Appeal (AT) (Ins.) No. 1060-1061 of 2023, Tejinder Pal Setia vs. Kone Elevator India Pvt. Ltd. & Ors. for deciding both Appeals. Brief facts of the case necessary to be noticed for deciding these Appeals are: (i) Kone Elevator India Pvt. Ltd. claiming to be the Operational Creditor issued Demand Notice dated 15.10.2018 for debt of Rs.92,70,000/- and thereafter, filed an application under Section 9 on 22.04.2019 before the Adjudicating Authority (National Company Law Tribunal), Chandigarh Bench. (ii) When the petition under Section 9 came at the stage of final disposal a Settlement Agreement dated 27.09.2021 was entered between M/s Kone Elevator India Pvt. Ltd. and M/s Chandigarh Overseas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the Appeal it was left open to the Appellant to move an appropriate application before the NCLT, expressing his desire to liquidate and pay off the debt due to the Operational Creditor. (x) Subsequent to order dated 14.07.2023, an email dated 15.07.2023 was written by Tejinder Pal Setia to Sanjeev Chadha stating that as an erstwhile Director they are ready to make payment of Rs.35 Lakhs + interest on account of late payment. The said email was replied by Sanjeev Chadha expressing disagreement with the view of Suspended Director. (xi) I.A. No. 1571 of 2023 was filed by Tejinder Pal Setia offering to liquidate and pay off debt of the Operational Creditor. Demand Drafts of Rs.80,56,300/- were also submitted alongwith the application. On I.A. No. 1571 of 2023, the Adjudicating Authority directed the Respondent No.3 to the Application - Sanjeev Chadha to seek instructions by order dated 19.07.2023. Sanjeev Chandha, however, did not give his consent to accept the settlement. (xii) The Adjudicating Authority after hearing the parties on 20.07.2023 reserved the orders on I.A. No. 1571 of 2023. Another I.A. No. 1584 of 2023 was also filed by Homebuyers seeking intervention in I.A. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is submitted that the application filed by the Appellant being I.A. No. 1571 of 2023 was in pursuance of liberty granted by the Hon'ble Supreme Court on 14.07.2023 and the Adjudicating Authority ought to have allowed the application closing the CIRP when the entire debt is sought to be liquidated. The application was filed alongwith a Bank Draft of Rs.80,76,300/-. It is submitted that the Adjudicating Authority has inherent jurisdiction to close the CIRP before constitution of the CoC as has been clearly held by the Hon'ble Supreme Court in "Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors., (2019) 4 SCC 17". It is further submitted that the Homebuyers had no right to be impleaded in the proceeding and in fact they are setup by the Ex-management of the Corporate Debtor who now wants to take control of the Company. The Homebuyers who have already filed Section 7 application can prosecute their remedy in proceedings under Section 7. They have no right to be impleaded in the present proceeding. The Committee of Creditors was constituted by the IRP on 27.07.2023 although he was informed that MA has been filed before the Hon'ble Supreme Court by the Appellant. The application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relevant to notice following part of the Settlement Agreement: "Thereafter, the aforesaid project was re-christened as Jade Business Park. COPL assured KONE that they shall liquidate the entire dues of KONE and enter into a fresh contract with RONE on 14.03.2015 bearing reference number KEIPE/038/2015/000000494 8057 for the supply, installation, testing and commissioning of 4 Nos. Kone 15 Passenger Machine Room less Gearless Monospace Elevators at the Project in Jade Business Park, Sector-90, Mohali, Punjab on the terms and conditions which were mutually agreed between KONE and COPL. However, despite the assurance given to KONE, COPL did not liquidate the dues of KONE and the cheques as were issued in favour of KONE were dishonored, but no case of cheque-bounce is filed by KONE. In addition, vide letter dated 25.11.2015, COPL acknowledged that a sum of Rs.92,70,000/- is pending payment from their end and accordingly, assured and confirmed to KONE that the side outstanding amount shall be paid by the Corporate Debtor latest by 15.02.2016. Thereafter, once again, COPL acknowledged the outstanding dues of KONE vide letter dated 05.04.2016. AND WHEREAS KONE issued demand notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12% per annum and casts. The breakup of the payment shall be an under: a. Demand Draft no. 009371 dated 27.09.2021 for an amount of Rs.25,00,000/- in favor of KONE Elevator India Pvt. Ltd. b. HDFC Bank Cheque no, 000901 dated, 15.12.2021 for an amount of Rs.20,00,000/- in favor of KONE Elevator India Pvt. Ltd. c. HDFC Bank Cheque no. 000902 dated 15.03.2022 for an amount of Rs.15,00,000/- in favor of KONE Elevator India Pvt. Ltd." 9. From the above facts which have been recorded in the Settlement Agreement, it is clear that the Corporate Debtor has defaulted in making payment to the Operational Creditor since 2015 and the Settlement Agreement dated 27.09.2021 was also breached since payment as per the Settlement Agreement was not discharged by the Corporate Debtor. In Para 3 of the Settlement Agreement following was stated: "In case of default and dishonour of the cheques, KONE shall be entitled to continue with the existing pending proceedings before the NCLT and to take initiate any other legal proceedings as may be advised to them to claim the entire claim amount of Rs.92,70,000/- (after adjusting the amount received) with interest @ 12% per annum and casts." 10. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Kone Elevator India Pvt. Ltd., which stands assigned to the respondent no. 3 - Sanjeev Chadha. If any such application(s) is filed, the same would be decided in accordance with law. We express no opinion in this regard and leave all questions open. Learned counsel appearing for the Interim Resolution Professional (IRP) states that for a period of one week from today, the IRP will not issue an order constituting the Committee of Creditors. Pending application(s), if any, including application(s) for impleadment/intervention shall stand disposed of." 12. It was after order dated 14.07.2023 of the Hon'ble Supreme Court, application I.A. No. 1571 of 2023 was filed by the Appellant - Tejinder Pal Setia praying for closure of the CIRP. The CoC was not constituted till 26.07.2023, as noted above and was constituted only on 27.07.2023. Appellant after the order dated 25.07.2023 rejecting I.A. No. 1571 of 2023 and impleading the Homebuyers has filed a MA before the Hon'ble Supreme Court, which MA came to be disposed of on 04.08.2023 by following order: "ORDER We are not inclined to entertain the present application in a disposed of matter and leave it open to the applicant to fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 27.02.2023 passed by this Adjudicating Authority." 14. However, the parties were not in agreement with each other to the offer given by the applicant/respondent No.3. Thus, it can be safely said that the application under Section 12A of the Insolvency and Bankruptcy Code, 2016 read with Regulation 30A of the insolvency and Bankruptcy Board of India (Insolvency and Bankruptcy Resolution Process for Corporate Persons) Regulations 2016 is not maintainable in absence of any settlement agreement, particularly when the terms and conditions of the earlier agreement dated 27.09.2021 are breached cannot be reinforced or imposed by the applicant upon respondent No.3." 14. At time when the CoC was not constituted, there can be no impediment in power of Adjudicating Authority to exercise jurisdiction under Rule 11 to close the CIRP even if no application as per the procedure under Section 12A r/w Regulation 30A has been filed. The Adjudicating Authority itself has recorded finding that application filed by the Applicant was maintainable, which finding is recorded in Para 10 of the order. 15. There are two reasons due to which we are of the view that insolvency resolution process initi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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