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TMI Blog2024 (2) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... ert Biemond is Managing Director of the Appellant - It is already noticed that when there are more than one Managing Director, functions on behalf of the Appellant can be carried out at least by two Managing Directors. Present is not a case that there is any evidence that two Managing Directors did any action which may suggest or indicate participation in the policy making process of the Corporate Debtor, therefore, finding of the Adjudicating Authority with regard to Section 5(24)(m)(i) is without any basis and cannot be sustained. The Adjudicating Authority failed to notice that Rembert Biemond is in the Board of Director of the Corporate Debtor since 2017 when he was nominated by a foreign investor of the Corporate Debtor and Rembert Biemond was not nominated by the Appellant in the Board of Corporate Debtor. Hence, the whole observation is fallacious. In spite of pleading of the Appellant that there was no material to suggest essential technical information were received by the Appellant or were given by the Appellant to the Corporate Debtor. No finding has been returned referring to any material. Appellant was only Financial Creditor who has extended loan to the Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Appellant has not appointed any Director in the board of the Corporate Debtor. ii. The Corporate Debtor was promoted by a Bansal Family but had to exit from the company by resignation on 15.06.2022 on account of insistence by the lenders, especially UCO Bank. The foreign shareholders of the Corporate Debtor appointed a Director in the Board of Director of the Corporate Debtor namely Rembert Biemond in the year 2017. Rembert Biemond, a resident of Sweden has been working as Director in the Corporate Debtor since his appointment. Rembert Biemond is also one amongst the three Managing Directors of the Appellant. The Appellant ODAT was incorporated on December 4, 2019 as a German company and was not in existence when Rembert Biemond was appointed as Director in the board of Corporate Debtor. iii. CIRP commenced against the Corporate Debtor by order dated 28.10.2022 of the Adjudicating Authority. CIRP process of the Corporate Debtor was stayed by order of this Appellate Tribunal, which interim order was vacated. The Appellant filed its claim in the CIRP of the Corporate Debtor for an amount of Euros 1,77,40,328/- equivalent to INR 158,97,81,751/- on 20.09.2023. The IRP cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant can be transacted at least by two Managing Directors. Rembert Biemond who was one of the Managing Directors in the Appellant has no authority to act on behalf of the Appellant. Rembert Biemond was appointed in the Board of Corporate Debtor by its investors in 2017 whereas the Appellant was incorporated on 4th December, 2019. Rembert Biemond being Director of the Corporate Debtor had discharged some functions as Director of the Corporate Debtor, which functions were not functions of Rembert Biemond on behalf of the Appellant. Rembert Biemond became involved in the Corporate Debtor s interim and critical decisions only since all Directors and key Managerial personnel of the Corporate debtor exited/ abandoned the Corporate Debtor. There was no other Director left in the Company and Rembert Biemond took some critical action in the Corporate Debtor to protect the Corporate Debtor and to save the livelihood of 8000 tea garden workers. Rembert Biemond being Director of the Corporate Debtor may be related party to the Corporate Debtor but the Appellant is not a related to the Corporate Debtor. ODAT has no direct relationship with Corporate Debtor except it has extended Loan to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant submits that Appellant is a related party to the Corporate Debtor. It is submitted that in the Appellant s Company one Rembert Biemond AB holds 20% shareholding. Rembert Biemond AB is 100% owned by Rembert Biemond, hence, the Appellant is also related party within the meaning of Section 5(24)(d). Rembert Biemond, who is common Executive Director for both the Appellant and the Corporate Debtor, is the sole signing authority for the Appellant. It was Rembert Biemond who has authorized one Raju Kumar Singh to submit claim on behalf of the ODAT. Mr. Rembert Biemond, who is Director in the Corporate Debtor has been functioning as Acting Chairman of the Corporate Debtor. Rembert Biemond, Director of the Appellant had immediately prior to CIRP, had direct influence and deep entanglement in the management of the Corporate Debtor. Rembert Biemond sole Director of the Corporate Debtor was accustomed to act on the instructions of the Appellant. Even assuming that sub-clause 5(24)(h) is not applied then sub-clause (f) has to be applied. The Appellant was involved in policy making of the Corporate Debtor and there was clear interchange of managerial person. Allowing the Appellant in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epholz c) Consulting and support for companies in the agricultural, food and sustainable technology sectors in Germany and abroad through coaching, organizational development, interim management and financing solutions. 25,000,00 EUR a) If only one managing director has been appointed, he shall represent the company alone. If several managing directors have been appointed, the company shall be represented jointly by two managing directors. b) Managing director: Walter, Ulrich, Rehden, *23,08,1949 authorized to act as sole representative, with the power to conclude legal transactions in the name of the company with himself in his own name or as representative of a third party. b) Appointed as Managing Director: Biemond, Rembert Johannes, Jama/ Sweden, *17.07.1958 authorized to act as sole representative, with the power to conclude legal transactions in the name of company with itself in its own name or as representative of a third party. Appointed as Managing Director: Von Glenck, Tobias, Berlin, *07.071978 authorized to act as sole representative; with the power to enter into legal transactions on behalf of the company in his own name or as repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g admitted position that there are three Managing Directors in the Appellant Company. The German word Geshaftsfuhrer translates to Managing Director in English language. Conclusion is that on behalf of the Appellant two Managing Directors have to act jointly to act on behalf of the Appellant. 10. Now, we come to the impugned order by which the Application of the Appellant seeking direction to include it in the CoC with voting rights has been rejected. The Adjudicating Authority upheld the decision of the IRP to treat the Appellant as a related party relying on Section 5(24(h) and 5(24)(m). In Para 79 and 80 of the judgement is as follows: 79. However, we are convinced that sub-clause (h) and (m) would come to the rescue of the respondent as we find that ODAT's board consists of three persons including Mr. Rembert as the Managing Director/ Director of ODAT and he is actively involved in Executive Director capacity. A Company functions through its Board and Mr. Rembert being Managing Director of ODAT, the Applicant has to be treated as related party to the Corporate Debtor, at least from 2020, if not before. In light of several emails, documents placed by the Learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial lender, who has extended loan facility to the Corporate Debtor. No material has been placed on record to indicate that Appellant has given advise, direction or instruction to Director, Promoter or Manager of the Corporate Debtor who is accustomed to act accordingly. As noted above, the Appellant has to act jointly through two Managing Directors since there are more than one Managing Directors and it cannot be held that Appellant is acting through Rembert Biemond. Rembert Biemond is a Director in Corporate Debtor and all functions which are being referred to by the IRP including the emails and communication sent by Rembert Biemond as Director of the Corporate Debtor and not as Managing Director of the Appellant. The Adjudicating Authority committed error in treating the actions of the Rembert Biemond, a Director of the Corporate Debtor to be directions or instructions of the Appellant. In the reply as well as submission of the IRP, learned counsel for the IRP has emphasised that it was Rembert Biemond who has authorised Raju Kumar Singh on behalf of the ODAT for filing claim in the CIRP which fact has also relied by the Adjudicating Authority in Para 80. Raju Kumar Singh w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e through Director of the Corporate Debtor. There is no iota of evidence that Appellant has ever participated in policy making process of the Corporate Debtor. The Adjudicating Authority has again confused with actions of Rembert Biemond as Director of the Corporate. The actions of the Rembert Biemond as Director of the Corporate Debtor were his actions as Director of the Corporate Debtor and not on behalf of the Appellant. None of the correspondence and email which has been relied proves that functions of Rembert Biemond were not on behalf of the Corporate Debtor. He even claimed that he is discharging such functions on behalf of the Corporate Debtor. The conclusion of the Adjudicating Authority with regard to Section 5(24)(m)(i) has been recorded in Para 86-86, which is as follows: 85. Further Section 5(24)(m)(i) also supports the case of the Respondent. Through its Managing Director, Mr. Rembert who is director of Corporate Debtor and ODAT was clearly involved in participating in policy making process of CD from 2022. More over one of the reasons for him to be in the board is because of his expertise in agriculture consulting and therefore it is obvious that he has been pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant or were given by the Appellant to the Corporate Debtor. No finding has been returned referring to any material. Appellant was only Financial Creditor who has extended loan to the Corporate Debtor. There being neither any pleading regarding provision of essential technical information to, or from, the Corporate Debtor nor any proof, there was no occasion to come to the conclusion that condition under Section 5(24)(m) were fulfilled. The conclusion of the Adjudicating Authority were wholly baseless. 16. Shri Shaunak Mitra has also submitted that Rembert Biemond through its 100% proprietary i.e. Rembert Biemond AB has 20% shareholding in the Appellant and further the ODAT Group of Companies have considerable shareholding in the Corporate Debtor. The above submission was also addressed before the Adjudicating Authority that the Appellant is related party on the basis of Section 5(24)(d), which submission was rejected in Para 77-78, where the Adjudicating Authority has held following: 77. Though the argument made by the respondent that the scope of Section 5(24)(d) is wide enough to include shares of relatives also and since in the current case Mr. Rembert holds shares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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