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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 ..... r for the resolution of their claim/debt. In so far as, issue regarding the dues of the IRP are concerned, it can be taken care of by the Adjudicating Authority, if and when the IRP file an application on form FA and put up his claim for the CIRP cost. The order dated 30.03.2023 is set aside. The FC shall file the form FA along with the bank guarantee to the IRP who shall in turn file the same to the Adjudicating Authority for an order regarding to the withdrawal of the petition. First appeal is allowed. - [Justice Rakesh Kumar Jain] Member (Judicial),[Arun Baroka] Member (Technical) For the Appellants: Mr. Amit Agarwal, Ms. Reaa Mehta, Advocates, Zeeshan Hashmi, Mr. Ankit Parashar, Mr. Neel Kothari, Advocates. For the Respondent: Ms. Dyuti Ghai, Advocate for R-1/IRP, Mr. Aditya Vashisth, Advocate for R-2. ORDER (Hybrid Mode) Per: Justice Rakesh Kumar Jain (Oral) This order shall dispose of two appeals bearing CA (AT) (Ins) No. 478 of 2023 (herein after referred to as the first appeal) and CA (AT) (Ins) No. 711 of 2023 (herein after referred to as the second appeal), filed against the order passed by the National Company Law Tribunal, Mumbai Bench in CP (IB) No. 1089/MB- IV/2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial creditors. 6. The subject matter of the second appeal is that an application was filed by M/s Nippon Life India AIF Management Ltd., Nippon Life India Asset Management Ltd. and Vistra ITCL (India) Ltd.(FCs) Out of the aforesaid three, the first two are the financial creditors who had filed the application under Section 7 of the Code bearing CP (IB) No. 439(MB)/2022 before the NCLT, Mumbai against Ashapura Options Pvt. Ltd. (CD). 7 .Since, the CP (IB) No. 1089/NCLT/MB/C-IV/2022 was admitted on 30.03.2023, therefore, CP (IB)-439 (MB)/2022 filed by the aforesaid financial creditors was dismissed by the Ld. Tribunal on 10.04.2023 with the following order: Mr. Malhar Zatakia, Counsel appearing for the Petitioner and Mr. Aman Kacheria, Counsel appearing for the Corporate Debtor/Respondent are present through virtual hearing. Counsel appearing for the Petitioner brought to the notice of this Bench that the Corporate Debtor is already undergoing CIRP before Court No. IV in another Company Petition bearing CP No. 1089/2022 vide admission order dated 30.03.2023. In view of the above admission order, the present Company Petition along with all pending applications if any becomes in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trustee of Omkara PS 04/2021-22 Trust) 9 .It is argued by the Appellant that the entire payment has been made to Omkara Asset Reconstruction Company Ltd. (Financial Creditor) and thus they shall approach the IRP with form FA along with the Bank Guarantee for submitting the same to the Tribunal for obtaining the order as per law. Counsel for the IRP has submitted that though the Appellant in the first appeal has settled with the financial creditor but the IRP cost of Rs. 30,00,000/- has not been paid. This submission is strongly opposed by the Appellant on the ground that the IRP has worked only for 8 days because the constitution of the CoC was stayed by this court on 18.04.2023 which is continuing. 10 .In rebuttal, it is argued by the Counsel for the IRP that he has been working in collating the claims as well as doing other various compliances, therefore, entitled to the cost which has been claimed. 11 .On the other hand, Shri Amit Agrawal, appearing for the other financial creditors in the second appeal opposed the prayer made by the Appellant in the first appeal and submitted that even though CoC was not constituted but they are also entitled for the settlement of their amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 022 was admitted earlier, therefore, it was disposed of as infructuous on 10.04.2023. However, the Suspended Director of the Corporate Debtor was not satisfied with the admission, therefore, the first appeal and similarly the financial creditors who had filed CP (IB) No. 439 of 2022 also challenged the order of the tribunal resulting into the second appeal. 16 .It is also not in dispute that the IRP in the first appeal, soon after his appointment, made publication for inviting claims and received claims from the five secured financial creditors and nine unsecured financial creditors including the Appellants in the second appeal. 17 .At this stage, we may clarify that the first two companies namely Nippon Life India AIF Management Ltd., Nippon Life India Asset Management Ltd., are the debenture holders and the third Company namely Vistra ITCL (India) Ltd. is the debenture trustee. It is also not in dispute that the CoC was not constituted and by virtue of the order passed by this court in the first appeal stay regarding the constitution of the CoC is continuing. 18. One of the Suspended Director of the CD made a proposal on 08.08.2023 for the OTS to the financial creditor of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii. Although the IRP had made submissions that the suspended director having transferred huge amount from the account of the company to his personal account and from there having made the payment to the OC under the settlement but the same was not conclusively proved; iv. The suspended director and their counsel made frivolous arguments before the NCLT which were contrary to record in order to obtain favourable orders; v. As many as 35 claims of creditors both operational and financial have been filed in the meantime. As such withdrawal of the proceedings would adversely affect their rights; vi. The proceedings once admitted and IRP having initiated, such proceedings are in rem and all stake holders can participate in the proceedings with their respective claims; and vii. Regulation 30A of IBBI Regulations was not binding upon it and such provision would not be of any help to the CD or its suspended Directors; 21. The finding recorded by the Ld. Tribunal was that there were 35 claims of the creditors both operational and financial have been filed in the meanwhile, therefore, withdrawal of the proceedings would adversely affect their rights. It was also an objection that proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for withdrawal filed Under Section 12A of IBC. The substituted Regulation 30A of IBC as it stands today clearly provided for withdrawal applications being entertained before constitution of CoC. It does not in any way conflicts or is in violation of Section 124 of 1BC. There is no inconsistency in the two provisions. It only furthers the cause introduced vide Section 12A of IBC. Thus, NCLT fell in error in taking a contrary view . 23 .Ultimately, the following findings have been recorded at para 40 to 44 which are reproduced as under: 40. Both the parties have relied upon paragraph 82 of the judgment in the case of Swiss Ribbons (supra). According to the Appellant, the NCLT ought to have exercised its inherent powers Under Rule 11 of the NCLT Rules whereas for the intervenors it is submitted that this Court had observed that power Under Rule 11 would be exercised after hearing all concerned parties. It may be noted that at the time when the application for withdrawal of the proceedings was filed the CoC was not constituted as such there could not have been any other concerned parties except the OC, CD and IRP. It was only because of the delay caused by the NCLT in disposing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor (Omkara asset Reconstruction Company Pvt. Ltd.), order of admission passed against the CD in CP (IB) No. 1089 of 2022 does not survive and hence CA (AT) (Ins) No. 711 of 2023 is hereby allowed. CP (IB) No. 439 of 2022 has been disposed of as infructuous because of the admission of CP (IB) No. 1089 of 2022, can be revived for pursuing their remedy against the corporate debtor for the resolution of their claim/debt. In so far as, issue regarding the dues of the IRP are concerned, it can be taken care of by the Adjudicating Authority, if and when the IRP file an application on form FA and put up his claim for the CIRP cost. 26 .In view of the aforesaid facts and circumstances, the first appeal is allowed. The order dated 30.03.2023 is set aside. The FC shall file the form FA along with the bank guarantee to the IRP who shall in turn file the same to the Adjudicating Authority for an order regarding to the withdrawal of the petition. It is needless to mention that the IRP may also, at that stage, file its claim for the IRP cost which shall be considered and decided by the Adjudicating Authority. It is further directed that if any such application is filed within a period of one m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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