9911796707
TMI Blog2024 (10) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... edence has to be given to the said application but Section 11A(3) cast an exception as it provides that where an application under Section 54C is filed after fourteen days of the filing of the application under Section 7, 9 or 10 then it has not to be given precedence rather the precedence has to be given to the application filed under Section 7, 9 or 10 of the Code. Section 11A(4) of the Code says that the provision of this Section i.e. 11A shall not apply where an application under Section 7, 9 or 10 is filed and pending as on the date of the commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2021. Meaning thereby, if the application under Section 7, 9 or 10 is already filed and then the Act of 2021 came into being then the applicant filing the application under Section 54C cannot take the help of this Section. In the present case, what precisely has happened is that the application under Section 7 was filed on 09.12.2020, the Act of 2021 came into being on 04.04.2021 and the application under Section 54C was filed on 04.09.2022 that is much after the expiry of year, therefore, the rigours of Section 11A(4) is squarely applied to the controversy at hand and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed, be filed within two days. Let Reply Affidavit be filed within three weeks. Rejoinder may be filed within two weeks, thereafter. List this Appeal on 25th July, 2023. It is made clear that in this Appeal we are not passing any interim order staying the proceedings. 3.The second appeal came up for preliminary hearing on 02.11.2023 in which the following order was passed:- Learned Counsel for the Appellant submits that the Company Appeal (AT) (Ins.) No.707 of 2023 has been filed challenging the PrePackaged Insolvency Resolution Process (PPIRP) order and the present Appeal has been filed challenging the approval of the Resolution Plan. It is submitted that the Company Appeal (AT) (Ins.) No.707 of 2023 is coming on 16.11.2023. 2. Issue Notice. Learned Counsel accepts notice on behalf of Respondent No.1 and Respondent No.2. Both the Respondents may file Reply before the date fixed. 3. List the Appeal on 16.11.2023. In the meantime, any action taken in pursuance of the Resolution Plan shall be abide by the result of this Appeal. 4.We are disposing of both these appeals together because the survival of the second appeal depends upon the decision of the first appeal because in case t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under Section 54(C) is filed alongwith the base resolution plan, the RP filed an application bearing I.A. No. 3021 of 2023 on 30.07.2023 invoking Section 54K(15) of the Code and Regulation 49(1) of the Regulations for the purpose of approval of the resolution plan which was approved by the Tribunal vide its impugned order dated 10.08.2023 by allowing the said application. 13.Aggrieved against the said order dated 10.08.2023, the second appeal has been filed. 14.Counsel for the Appellant, while arguing the first appeal, has submitted that the Tribunal has committed a patent error in giving precedence to the application filed under Section 54(C) of the Code over and above the application filed under Section 7 of the Code, violating the provisions of Section 11A(4) of the Code. He has submitted that Section 11A, inserted by the amendment, has four parts which are all independent of each other in which Section 11A(4) says that the provision of this section shall not apply where an application under Section 7 or 9 or 10 is filed and pending as on the date of the commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2021 . He has thus argued that the Tribunal giving pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds that while section 240A of the Code allows restoration of control back to the Promoters of MSME in resolution in precedence of other prospective resolution applicants, section 54C allows the promoters to keep it with them till the resolution plan proposed by MSME is not found acceptable by the financial creditors. Accordingly, this Bench feels it would in order to adjudicate application filed u/s 54C of the Code prior to adjudication of application filed u/s 7 of the Code, where such section 7 application filed prior to introduction of PIRP regime remain pending with the Adjudicating Authority. However, as held in preceding para, the intervenor's application CP(IB) 63 (MB) 2021 is not in accordance with the intent and object of the code and is not maintainable under the Code. This Bench proceeds to decide on the present application, as no application is pending before us. 17.We have heard Counsel for the parties in so far as the first appeal is concerned and perused the record with their able assistance. 18.Question involved in the first appeal is as to whether the application filed under Section 54(C) of the Code shall have the precedence/priority of consideration and decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an application filed under Section 54C is pending, the AA shall pass an order to admit or reject such application, before considering any application filed under Section 7 or 9 or 10 during the pendency of such application under Section 54C, in respect of the same corporate debtor. In so far as Section 11A (2) is concerned, it provides that if an application under Section 54C is filed within fourteen days of filing of any application under Section 7 or 9 or 10, which is pending, in respect of the same CD, then AA is bound to dispose of the application under Section 54C at the first instance. Section 11A(3) provides that where an application under Section 54C is filed after fourteen days of the filing of any application under Section 7, 9 or10, which is pending, in respect of the same CD, then AA shall first dispose of the application under Section 7, 9 or 10 of the Code. 22.The aforesaid three provisions are not related to the present controversy. Section 11A(2) says that precedence is to be given to an application if the application under Section 54C already pending and application under Section 7, 9 or 10 is filed or if the application under Section 7, 9 or 10 is pending and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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