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TMI Blog2024 (12) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are: (i) The Corporate Debtor - Sant Dyaneshwar Hospital Pvt. Ltd. was incorporated on 20.03.2003 by Respondent Nos.6 to 12. The CD, which is a Hospital, became debt ridden Company, the erstwhile Directors entered into a Memorandum of Understanding ("MoU") dated 17.02.2016 with Accord Mediplus Pvt. Ltd. (the Company of the Appellants). Under the MoU, entire shareholding of Sant Dyaneshwar Hospital proposed to be transferred to Accor Pathlab Pvt. Ltd. and/ or its affiliated (Accord Group) for a consideration of Rs.17.50 crores. As a transient measure for operation of the Bank account of the Company maintained with Janseva Sahakari Bank Ltd., it was decided that two nominees of Accord Group was mandatory to sign for clearing of cheques. The Appellant No.2 is one of such nominees. (ii) In October 2016, an amount of Rs.1.96 crores was deposited in the Corporate Debtor and transferred by Respondent No.6 to 12 into a Trust of which Respondent No.6 to 12 were also Directors. On 28.03.2017, another amount of Rs.35 lakhs was deposited in the account of the CD, which was transferred on 31.03.2017 by Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made out either for recall of the admission order dated 08.10.2021 or for withdrawal of CIRP against the CD, on the ground that the matter has been settled with the creditors. Aggrieved by the impugned order, this Appeal has been filed by the Suspended Directors. 3. We have heard Ms. Madhavi Divan, learned Senior Counsel and Shri Abhijeet Sinha, learned Senior Counsel for the Appellant; Shri Amol Nehra and Shri Ashish Choudhury, learned Counsel for Respondent Nos.6 to 12; and Shri Ashish Pyasi, learned Counsel for Respondent Nos.2, 4 and 5. 4. Learned Counsel for the Appellant in support of the Appeal contends that the CD did not owe any debt to Respondent Nos.6 to 12. The claim of debt against the CD was created by Respondent Nos.6 to 12 by circular transaction. It is submitted that the Appellant came to know about relevant fact after reply was filed by Janseva Sahakari Bank, which clarified that the amount was transferred by Respondent Nos.6 to 9 in the CD, which was immediately transferred to the Trust controlled by them and from Trust, the amount was transferred for clearing the debt obligation of the Trust. The fact pertaining to circular transaction/ fraudulent transfer, ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the affidavit in reply by Janseva Sahakari Bank on 27.06.2023. It is submitted that present is a fit case for exercising jurisdiction by this Tribunal, closing the malafide and fraudulent CIRP initiated by the Respondents. It is submitted that Respondent Nos.6 to 9, who have entered into an MoU and Share Purchase Agreement transferring their all rights in the Company with intent to regain the control has adopted this malafide and fraudulent exercise of initiation of CIRP. 5. Learned Counsel for Respondent Nos.6 to 12, opposing the submissions of learned Counsel for the Appellant submits that Respondent Nos.6 to 12 has never been approached for any settlement. No offer of settlement having been given to Respondent Nos.6 to 12, there is no occasion to file any Application under Section 12A of the IBC for withdrawal. It is submitted that Appellant has no locus standi to file IA No.2241 of 2024 for seeking withdrawal. It is submitted that an Appeal was filed against the order admitting Section 7 Application, which came to be numbered as Company Appeal (AT) (Ins.) No.881 of 2021, which was dismissed by this Appellate Tribunal on 25.11.2022 and 10.01.2023. Challenging the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent powers; 7.3. Pending the hearing and final disposal of the present application, this Hon'ble Tribunal be pleased to direct the Respondent No.1 - Resolution Professional to act in terms of the settlement dated 26.04.2024 for repayment of the debt due to financial institutions in terms of the settlement from the monthly profits generated by the Hospital under the management of the Applicants / Accord Group. 7.4. In the alternative and without prejudice to prayer 7.3, pending the hearing and final disposal of the present application, this Hon'ble Tribunal be pleased to direct the Respondent No.1 - Resolution Professional to deposit an amount of 25 lacs per month from the Hospital accrued from 08.10.2021 till the disposal of this application with the Financial Institutions as per settlement plan. 7.5. Interim and ad-interim orders in terms of prayer clauses 7.3 and 7.4 above; 7.6. Any other and further reliefs as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the present case. 9. In the Application - IA No.2241 of 2024 in paragraph 1.1, the Appellant has made following pleadings : "1.1 The Applicants are suspended directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate i.e. 11.11.2022, when the matter was taken up, a proxy counsel on behalf of the appellant requested for adjournment of the appeal. The prayer was allowed and the case was adjourned. Today the appellant has come out with a proposal of engaging a new counsel and requested for time for filing Vakalatnama and appearance. The present appeal was filed under Section 61 of the IBC. Admission order of CIRP was passed on 08.10.2021. It goes without saying that for completion of CIRP proceeding upper time limit has been prescribed i.e. 180 days. Admission order was assailed but no stay order was passed in the present appeal. In view of the said situation unnecessary adjournment may not be granted that too to the appellant who is intending to drag the matter by engaging new counsel. On the examination of record it appears that the appellant instead of getting the appeal finally decided, one way or the other is trying to drag the matter. Such a prayer may not be entertained in a proceeding in which time is essence. Accordingly the appeal stands dismissed due to non- prosecution. This order was passed in present of learned counsel for the Respondent." 12. The Restoration Application ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st has been issued, the applicant shall state the reasons for withdrawal at this stage. In essence, the regulation in its amended form, deviates from its earlier form by also responding to the decision of this Court in Brilliant Alloy Private Limited (supra). Unlike the unamended regulation, the regulation acknowledges the possibility of withdrawal even after the invitation for expression has been issued. However, it mandates that an application for withdrawal in such cases must be accompanied by reasons. 62. Regulation 30A (2) provides that the application must be made in the manner prescribed in Form FA of Schedule-I,45 and must be accompanied by a bank guarantee towards the specified expenses. Regulation 30A(3) provides that in cases where the application for withdrawal is moved before the constitution of the CoC, the IRP shall submit the application to the NCLT on behalf of the applicant within three days of receipt. Regulations 30A (4) and (5) deal with the situation where the CoC has already been constituted. They provide that the CoC shall consider the application within seven days of receipt, and subsequently, if the application is approved by the CoC with a ninety-percen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Code, 2016 is not frustrated, then the Court would be well-within its prerogative to exercise them to secure the object of the IBC, 2016. If the proposition that there ought to be no exercise of the inherent powers where a procedure is laid down were to be blanketly accepted then it may have a very chilling effect whereby the very purpose of vesting this Court with inherent powers under Article 142 and tribunals Rule 11 of the NCLT Rules would be rendered otiose and meaningless." 16. The above judgment clarified the law that where there exists extraordinary circumstances warranting the exercise of such powers in order to ensure that the very salutary purpose of the Code, is not frustrated, then the Court will be well within its prerogative to exercise them to secure the object of the IBC. Learned Counsel for the Appellant has also placed reliance on judgment of this Tribunal in Hindalco Industries vs. Hirakud Industries Works Ltd. - Company Appeal (AT) (Insolvency) No.42 of 2022, where this Tribunal after noticing that the case was one which attracted Section 65 of the IBC, held that initiation of CIRP was done fraudulently by the CD, working in collusion with Financial Credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the prayers made in IA No.1238 of 2022 and also in IA No.1770 of 2022. In the present Appeal, a reply has been filed by Respondent Nos.6 to 12, in which reply in paragraph 2.1.9, Respondents have referred to the prayers made in both the IAs. It is useful to extract paragraph 2.1.9 (a) and (b), which are as follows: "(a) IA No.1238/2022, seeking: (i) direction to the RP to take appropriate action u/s 43, 44, 45, 49 and 66 of the Insolvency and Bankruptcy Code, 2016 (Code) against the Respondent Nos. 1 to 4 therein for fraudulent transactions and siphoning of monies, (ii) that the money transfers dated 1 November 2016 and 31 March 2017 from the Company/ Corporate Debtor to Trust amounting to Rs.2,31,00,000/- by the Respondent Nos1 to 4 therein declared as fraudulent, (iii) declaration that the Respondent Nos.1 to 4 therein have initiated CIRP with malicious intent, (iv) declaration that Dr. Suhas Laxman Kamble (Respondent No.7 herein) as person not eligible to be a Resolution Applicant u/s 29A of the Code, (v) stay of CIRP, and (vi) to refrain from considering/ allowing/ discussing/ evaluating/ approving any Resolution Application from the Respondent No.7 herein. (b) IA No.1770 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that as on date there are two Resolution Plans are on table which are to be voted upon by the CoC. And in light of the fact that the final voting cannot be taken upon, amid the Oral directions passed by this Hon'ble Bench on 11.05.2022, the CIRP would not be reached to tis finality. " 20. From the above, it is clear that IA No.1238/2022 has not yet been heard and under the directions of the Adjudicating Authority, no steps have been taken towards voting on any Resolution Plan. From the facts as noted above, it is clear that the Appellants by filing IA No.1238 of 2022 as early as on 11.05.2022 have pleaded that initiation of CIRP by Respondent Nos.6 to 9 is malafide. We have extracted the prayers in IA No.1238 of 2022 as noticed in paragraph 2.1.9 of the reply of the Respondents, where one of the prayers is "declaration that the Respondent Nos.1 to 4 therein (Respondent Nos.6 to 9 herein) have initiated CIRP with malicious intent". Thus, the Appellant has flagged the issue within the meaning of Section 65 of the Code, as early as on 11.05.2022, which Application is still pending before the Adjudicating Authority. 21. We have already observed that Adjudicating Authority has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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