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TMI Blog2024 (11) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... Plan has not been received, the effect and consequence of rejection of Plan has to ensue by virtue of Section 115. The Application I.A. 449/2024, which was filed by RP, and the Prayers made thereunder were in accordance with Statutory Scheme under Section 115. Repayment Plan having not been submitted by Debtor, natural consequence was Creditors to file an Application for Bankruptcy under Chapter IV - The present is the case where Appellant right from very beginning has been challenging every action of the Adjudicating Authority and acts of Resolution Professional unsuccessfully. Appellant has never submitted any Repayment Plan to be finalised by the RP. From the facts and sequence of the event which has been brought on the record, it is clear that at no point of time, subsequent to receiving request from the RP for submitting a Repayment Plan, Appellant raised any grievance or filed any proceeding before the Adjudicating Authority, raising his grievances and grounds for not being able to submit a Repayment Plan. The Appellant kept silence for years together and when consequential Order under Section 115 has been passed by the Adjudicating Authority, he is raising grievance of not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 03.08.2021, appointed the Respondent, Prashant Jain as RP. ii. The RP after interacting with the Personal Guarantor submitted a Report under Section 99 recommending initiation of Insolvency Proceeding against the Personal Guarantor. iii. Adjudicating Authority passed an Order on 16.06.2022, admitting Section 95 Application. iv. The Appellant aggrieved by the Order dated 03.08.2021, appointing the RP has filed Comp. App. (AT) (Ins.) No. 807/2021 in this Tribunal. In the Appeal, Notices were issued, but no Interim Order was passed. v. Against the Order dated 16.06.2022, admitting Section 95 Application, Appellant also filed Comp. App. (AT) (Ins.) No. 740/2022. After admission of Section 95 Application RP issued Public Notice on 21.06.2022. Claims were received under Section 104 of the Insolvency and Bankruptcy Code, 2016 (for shot `The IBC or `The Code ) by the RP. RP prepared updated list of Creditors and intimated the Appellant to submit a Repayment Plan. vi. RP sent email dated 07.07.2022, 18.07.2022 and 02.08.2022, asking for providing the relevant document. vii. A Reply dated 03.08.2022 was sent to the email dated 02.08.2022 by the Appellant, where Appellant asked for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itors are entitled to file an Application for Bankruptcy under Chapter IV. In Para 7, following observations and directions have been made by the Adjudicating Authority: 7. Since, we have failed to decipher any specific provision contemplating a situation where no repayment plan is proposed, we consider it fit to apply provisions under Section 114 and Section 115 that envisages a situation when an Adjudicating Authority rejects a repayment plan under Section 114(1) and Section 115(2), the creditors are entitled to file an application for bankruptcy under Chapter IV. We thus pass the following Orders: - i. We thus allow the prayer(s). ii. With the above directions, IA(IBC)/449(KB)2024 is allowed and disposed of. iii. The Registry is directed to send e-mail copies of the order forthwith to the Board and all the parties and their Ld. Counsel for information and for taking necessary steps. xii. Challenging the Order, this Appeal has been filed by the Appellant. 4. Learned Counsel for the Appellant challenging the Order contends that Order passed by the Adjudicating Authority is in violation of Principle of Natural Justice since I.A. No.499/2024 was neither served on the Appellant nor A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plan, the Creditors are entitled to file an Application for Bankruptcy under Chapter IV, the Order of the Adjudicating Authority for giving liberty is in accordance with Section 115(2), which is statutory entitlement of the Creditors. Even if no liberty would have been granted by Adjudicating Authority in the Impugned Order, right of Creditor to file an Application for Bankruptcy under Chapter V is fully provided for in Section 115(2). It is submitted that all Reports which were required to be submitted by RP under Section 99 were already sent to the Personal Guarantor and after considering the Report, the admission Order was passed on 16.06.2022. It is submitted that no Repayment Plan was submitted by Appellant nor any such Repayment Plan could be placed before the Creditors for restructuring of the debts or affair of the Creditors. When there was no Repayment Plan prepared, there was no question of submission of any Repayment Plan or documents along with the Repayment Plan. Learned Counsel for the RP submitted that Appellant was not required to be heard by the Adjudicating Authority in an Order under Section 115 of the IBC. 6. We have considered the submission of Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents and relevant documents have already been provided. Further, with regard to the Creditors Claim it is stated that I have not executed or am aware of any debt to any of the banks on my personal capacity, It is submitted that I would require the documents or the agreements on the basis of which you have indicated the Claims. With regard to the documents, due to some personal difficulty, I have been unable to collate and arrange for providing the same, therefore I kindly request you to provide me with a slight accommodation. In the meanwhile, please provide me with the document so as to determine the basis on which the claims have been admitted. Thank you for your kind consideration. 9. RP again immediately responded to the email dated 03.08.2022, asking to provide the details at the earliest. Several emails were sent by RP. On 24.08.2022, Appellant again wrote to the RP to provide the necessary documents on basis of which claims have been submitted. 10. Now we notice the Statutory Scheme after admission of Section 95 Application under Section 100. Section 102 provides for Public Notice and claim for Creditors which Public Notice was duly issued by RP. On 21.06.2022, claims were a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the report of the meeting of the creditors submitted by the resolution professional under section 112: Provided that where a meeting of creditors is not summoned, the Adjudicating Authority shall pass an order on the basis of the report prepared by the resolution professional under section 106. (2) The order of the Adjudicating Authority approving the repayment plan may also provide for directions for implementing the repayment plan. (3) Where the Adjudicating Authority is of the opinion that the repayment plan requires modification, it may direct the resolution professional to re-convene a meeting of the creditors for reconsidering the repayment plan. 13. In the present case, no Repayment Plan having been prepared there arose no occasion to pass an Order for either accepting or rejecting the Resolution Plan. Section 115 provides for effect of Order of Adjudicating Authority on Repayment Plan, which provision is as follows: 115 : Effect of order of Adjudicating Authority on repayment plan. (1) Where the Adjudicating Authority has approved the repayment plan under section 114, such repayment plan shall (a) take effect as if proposed by the debtor in the meeting; and (b) be b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Adjudicating Authority. (1) The resolution professional shall file the repayment plan, as approved by the creditors, along with the report mentioned in sections 106 or 112, as the case may be, with the Adjudicating Authority on or before completion of one hundred and twenty days from the resolution process commencement date. (2) The resolution professional shall provide the copies of the documents filed with the Adjudicating Authority under sub-regulation (1) to the guarantor and the creditors, within three days from the date of such filing. 19. Appellant has referred to Regulation 19(2) to contend that when Regulation requires that copies of documents filed by the Adjudicating Authority are required to be provided to the Guarantors, Appellant was required to be heard when Order under Section 115 has been passed. 20. When we look into the Regulation 19, it is clear that the Regulation refers to filing of Repayment Plan by RP and Repayment Plan has to be submitted within 120 days from the Resolution Process commencement date. Resolution Process commencement date is 16.06.2022 and 120 days came to an end in the Year 2022 itself. Copies of the documents filed before the Adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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