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TMI Blog2024 (10) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.04.2023. 2.In so far as the first appeal is concerned, it is filed by the Suspended Director of Ashapura Options Pvt. Ltd. (Corporate Debtor) to challenge the admission of an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short 'Code') by Omkara Asset Reconstruction Company Ltd. (Financial Creditor) for the resolution of an amount of Rs. 65,30,77,490/-. 3.While admitting the petition filed by the Omkara Asset Reconstruction Company Ltd. (Financial Creditor), the Tribunal declared moratorium and appointed Mr. Bijendra Kumar Jha, as the IRP. The first appeal was filed on 15.04.2023 which came up for preliminary hearing on 18.04.2023 in which the following order was passed. "Learned counsel for the Appellant contends that after issuance of notice by the Adjudicating Authority to the Corporate Debtor, there has been series of correspondence between the Corporate Debtor and the Financial Creditor for settlement and an OTS proposal was forwarded to the Financial Creditor, which was entertained and the Financial Creditor took cognizance of the OTS proposal and asked for certain information and in none of the correspondence, any information about f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liberty to the petitioner to put forth their claim before the IRP". 8.Aggrieved against the order dated 10.04.2023, the aforesaid financial creditors filed the second appeal in which notice was issued. It is submitted that during the pendency of the appeal, One Time settlement (OTS) was proposed by the Suspended Director which was accepted by the financial creditor (Omkara Asset Reconstruction Company Ltd.) on 16.09.2023 for an amount of Rs.17 Crores which was ultimately paid on 30.03.2024 regarding which the Omkara Asset Reconstruction Company Ltd. issued a letter dated 24.04.2024 which read as under: To, Mr. Pravin Chamaria (Gurantor and Ex Promoter of M/s Ashapura Options Pvt. Ltd.) 901, 9th Floor, Hallmark Business Plaza, Gurunanak Hospital Road, Bandra (East) Mumbai- 400064 Ref: 1.Letter dated16th March 2024 addressed by M/s 7Fireflies Production LLP 2.Sanction Letter dated 30th March 2024 Referenced as Omkara/R1158/2023-24. Dear Sir/s, 1.In light of the referenced letters, we hereby confirm the receipt of Rs. 10,00,00,000/- (Rupees Ten Crore Only) by way of RTGS in the account number 344905001082 held with ICIC0003449 bank on 30.03.2024 on behalf of M/s. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preferential treatment can be given by the corporate debtor to one of the financial creditor. 12.In support of his submission, he has relied upon a decision of the Hon'ble Supreme Court in the case of "Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors". (2019 4 SCC 17) and has drawn our attention to paragraph 82 of the said decision which read as under: "82. It is clear that once the Code gets triggered by admission of a creditors petition under Sections 7 to 9, the proceeding that is before the Adjudicating Authority, being a collective proceeding, is a proceeding in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a committee of creditors is constituted (as per the timelines that are specified, a committee of creditors can be appointed at any time within 30 days from the date of appointment of the interim resolution professional). We make it clear that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first appeal which was considered as accepted on 16.09.2023 and was admitted on 30.03.2024 at an amount of Rs. 17 crores which is stated to have been paid in the month of March itself in pursuance of which letter dated 24.04.2024 has been written by the financial creditor of the first appeal. The Appellant in the first appeal was thus awaited the no due certificate from the financial creditor in the first appeal only after the disposal of the petition filed under Section 7 against which the appeal has been filed. 19.Although, Counsel appearing on behalf of the secured financial creditors in the second appeal has submitted that as per Swiss Ribbons (supra), judgment of the Hon'ble Supreme Court, the proceedings before the Adjudicating Authority, triggered by Section 7 or 9 is a collective proceeding, a proceeding in rem and it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. But in Judgment relied upon by the Appellant in the case of Abhishek Singh (Supra), the petition was filed by an Operational Creditor (OC) which was admitted on 01.03.2021 by the Tribunal and thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that proceedings initiating the CIRP are proceedings in rem and all the stakeholders can participate in the proceedings with their respective claims. However, in this regard, the Hon'ble Supreme Court recorded a finding in para no. 27, 28 which are reproduced as under: "27. With respect to the said objection, it only needs to be mentioned that other creditors would have their own right to avail such legal remedies as may be available to them under law with respect to their claims. The rights of the creditors for their respective claims do not get whittled down or adversely affected if the settlement with the OC in the present case is accepted and the proceedings allowed to be withdrawn. Claims for expenses for IRP 28. Any amount spent by the IRP legally admissible to him could always be recovered in the same proceedings and the NCLT or the Adjudicating Authority would be well within its power to get the same cleared Under Clause 7 of Regulation 30A of IBBI Regulations". 22.In paragraph 27 it has been observed by the Hon'ble Supreme Court that other creditors would have their own right to avail such legal remedies as may be available to them under law with respect to thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the NCLT in disposing of the applications Under Section 12A of IBC and Regulation 30A of IBBI Regulations that large number of creditors filed their claims. The inherent powers are to be invoked in order to meet the ends of justice which, in our opinion, the NCLT failed to invoke. 41.Regulation 30A of IBBI Regulations provide a complete mechanism for dealing with the applications filed under such provision. The issue raised by the IRP regarding its claim for expenses is well taken care of under the said provision. Various safeguards have been provided in Regulation 30A of IBBI Regulations to be fulfilled by the OC which apparently have been fulfilled as there is no complaint in that regard either by the IRP nor it is apparent from the impugned order of the NCLT. Thus, the objection raised by the IRP does not merit any consideration in this appeal. 42.For all the reasons recorded above, the impugned order of the NCLT cannot be sustained. The application filed Under Regulation 30A of IBBI Regulations deserves to be allowed. 43.Accordingly, the appeal is allowed and the impugned order of NCLT is set aside. Further, the Application No. 196 of 2021 also deserves to be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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