National Company Law Appellate Tribunal
Snj Distillers Pvt Ltd vs S. Rajendran on 13 January, 2022
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NATIONAL COMPANY LAW APPELLATE TRIBUNAL
CHENNAI BENCH, CHENNAI
COMPANY APPEAL (AT)(CH)(INS) NO. 1/2022
IA No.1/2022
In the matter of :
SNJ Distillers Pvt & Anr Appellant
Vs
S. Rajenderan & 10 others Respondent
Present:
For Appellant No.1 :Dr. Abhishek Singhvi, Advocate
for Avinash Krishnan Ravi, Jerin Asher Sojan
and Naveen W, Advocates
For Appellant No.2 :Mr. P.H. Arvindh Pandian, Sr. Advocate
for Avinash Krishnan Ravi, Jerin Asher Sojan
and Naveen W, Advocates
For Respondent No.1 :Mr. P.S. Raman, Sr. Advocate
/Caveator for R2 For Ms. M. Savitha Devi
Mr. M.S. Elamathi, Advocates
For Respondent No.3 :Mr. Gopal Sankaranarayanan, Sr. Advocate
For Karuppaiah Meyyappan, Advocate
For Respondent No.2 :Mr. Krishnendu Datta, Advocate
Company Appeal (AT) (CH) (INS) No. 9 of 2022
IA Nos. 19 of 2022
In the matter of:
Mr. S. Rajendran and others Appellant
V
M/s. South India Hotels Private Limite ... Respondents
Present:
For Appellant : Mr. P.S. Raman, Sr. Advocate
For Ms. M. Savitha Devi
Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022
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Mr. M.S. Elamathi, Advocates
For Respondent No.2 : Mr. Gopal Sankaranarayanan, Sr. Advocate
For Karuppaiah Meyyappan, Advocate
For Respondent No.1 : Mr. Krishnendu Datta, Sr. Advocate
For Rohan Rajasekaran Advocate
ORDER
VIRTUAL MODE IA No. 1 of 2022 in Company Appeal (AT)(CH)(Ins)No. 1/2022.
According to the Learned Senior Counsel for the Appellant No.1 the 'Adjudicating Authority' (National Company Law Tribunal, Division Bench II, Chennai) in MA/731/2019 in CP/280/IB/2018 (Filed by the Applicant/1st Respondent in Comp App (AT)(CH)(Ins) No.1/2022 & Appellant in Comp App (AT)(CH)(Ins) No.9/2022) by virtue of the impugned order on 24.12.2021 had dismissed the said Miscellaneous Application by arriving at the conclusion that the alleged transaction mentioned in MA No.731/2019 filed by the Resolution Professional in respect of the 'Corporate Debtor' does not constitute 'preferential transaction' as per Section 43 of the I&B Code and dismissed the said MA/731/2019 and closed the other connected MA/769/2019, IA/04(CHE)/2021 and MA/114/CHE/2021. APPELLANT'S SUBMISSIONS
2. Assailing the correctness, legality and validity of the impugned order dated 24.12.2021 in MA/731/2019 in CP/280/IB/2018 passed by the 'Adjudicating Authority' (National Company Law Tribunal, Division Bench II, Chennai) the Learned Senior Counsel for the 1st Appellant submits that the impugned order dated 24.12.2021 had given a 'windfall bounty' to the Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 3 Respondents, because of the fraud played by them upon the 'Corporate Debtor', the 'Resolution Professional' and the 'Adjudicating Authority'.
3. Advancing his argument, the Learned Senior Counsel for the 1st Appellant contends that the 'adjudicating authority' had failed to take note of the 'tests' and queries formulated by the Hon'ble Supreme Court in the matter of Anuj Jain V Axis Bank Ltd and others reported in Manu/SC/0228/2020 and the said decision was not considered and also not recorded in the impugned order.
4. The Learned Senior Counsel for the 1st Appellant points out that the 'Adjudicating Authority' had proceeded on the misplaced premises in that the Resolution Applicant is only entitled to what is provided for in the 'Information Memorandum'.
5. The Learned Senior Counsel for the 1st Appellant proceeds to point out that the 'Adjudicating Authority' had misdirected himself into considering that it was the action of the creditors which was challenged and not that of the 'Corporate Debtor' when the 'Corporate Debtor' under its, former management, had stayed mute to the admitted violation of the terms of the 'Pledge Agreement' thereby, showering a benefit of the 'Pledged Shares' to the related parties.
6. The Learned Senior Counsel for the 1st Appellant takes a stand that the 'Adjudicating Authority' had committed an error in rendering a finding that there was 'security interest' created, when there was no 'Security Interest' in the eye of law as no charge was created in the register of charges, as required Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 4 under Section 77 of the Companies Act, 2013 which is considered to be a 'sine qua non', for recognition of any 'Security Interest' in the I&B Code.
7. The Learned Senior Counsel for the 1st Appellant comes out with a plea that the 'Adjudicating Authority' is bound in law to cause an 'enquiry' and subjectively satisfy itself in regard to the sanctity of documents projected before it and where the documents are ante dated to escape the look back period.
8. The Learned Senior Counsel for the 1st Appellant contends that the 'Adjudicating Authority' had failed to take note of the fact that the 'Information Memorandum' of the Corporate Debtor including the Balance Sheets of the 'Corporate Debtor' as they stood immediately before the commencement of CIRP and in respect of the Balance Sheets, the 3rd Respondent was shown as the 'subsidiary' of the 'Corporate Debtor' and no encumbrance was disclosed as 'existing' in relation to the shares of the 3rd Respondent held by the 'Corporate Debtor'.
9. The Learned Senior Counsel for the 1st Appellant submits that the 'jurisdiction' for 'Avoidance of Transaction' is exclusively conferred only on the 'Adjudicating Authority' and that the ingredients of Section 63 of the I&B Code creates a bar upon the parties to approach any other forum. In this connection the observation made by the 'Adjudicating Authority' in pagaraph 48 of the impugned order had required the parties to approach an appropriate forum for 'reliefs' which could only be given by the 'Adjudicating Authority' itself.
Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 5
10. The Learned Senior Counsel for the 1st Appellant advances an argument that the 'Adjudicating Authority had failed to appreciate in a real perspective in regard to the fact whether the mere payment of an advance and reaping the later benefit, will disentitle the Resolution Applicant who had paid 100% to the 'Committee of Creditors' of the benefits claimed under the Resolution Plan 2nd APPELLANT'S SUBMISSIONS
11. The Learned Senior Counsel for the 2nd Appellant submits that the 1st Appellant/Successful Resolution Applicant took over the 'Corporate Debtor (2nd Appellant/Empee Distilleries Ltd) through a Resolution Plan approved by the 'Adjudicating Authority' through its order dated 20.01.2020.
12. According to the Learned Senior Counsel for the 2nd Appellant, the 2nd Respondent/M/s South India Hotels Pvt Ltd was a related party of the 'Corporate Debtor' and is managed by the former 'Promoters of the Corporate Debtor'. Further, the 3rd Respondent/M/s Apollo Distilleries & Breweries Pvt Ltd, was a subsidiary of the 'Corporate Debtor' before the commencement of Insolvency Process, whose shares were siphoned of from the 'Corporate Debtor' by the earlier promoters, by undertaking numerous preferential and fraudulent transaction, which are the subject matter of the instant Company Appeal (AT)(CH)(Ins) No.1/2022.
13. The Learned Senior Counsel for the 2nd Appellant points out that the 1st Respondent is the 'Resolution Professional'/Applicant before the 'Adjudicating Authority' in MA/731/2019 in CP/280/IB/2018 and that the Respondent. No.2 to 9 are related parties to each other and admittedly, they were related party to the 'Corporate Debtor' during CIRP. Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 6
14. The Learned Senior Counsel for the 2nd Appellant comes out with a plea that during CIRP of the 'Corporate Debtor', the Resolution Professional, resting upon the information provided by the former promoters of the 'Corporate Debtor' found that the 2nd Respondent (represented by 5th Respondent) and the 'Corporate Debtor' (represented by her husband), the 4th Respondent had entered into three loan agreements and one share pledge agreement.
15. The Learned Senior Counsel for the 2nd Appellant points out that the 4th and 5th Respondents/former promoters of the 'Corporate Debtor' had informed the Resolution Professional that the 'Corporate Debtor' had failed to follow the terms of the loan agreement and as such, the shares held by the 'Corporate Debtor' in the 3rd Respondent, purportedly pledged to the 2nd Respondent was invoked by the 2nd Respondent, after series of notices, which were supposedly hand delivered between the 4th and 5th Respondents/husband and wife.
16. The Learned Senior Counsel for the 2nd Appellant takes a plea that based on due diligence conducted on numerous public documents of the 'Corporate Debtor' under the former management as well as on the 2nd Respondent/purported creditor to the 'Corporate Debtor', the Resolution Applicant discovered that though Rs. 12.5 crores was said to have been disbursed on 02.03.2016, the Balance Sheet of the 2nd Respondent for the period ending 31.03.2016 (financial year 2015-16) had not disclosed any such loan but had expressly asserted that no related party loan were given during this period and Director's Report by signed by the 4th Respondent. Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 7
17. Likewise, the Learned Senior Counsel for the 2nd Appellant points out that for the Financial Year ending 31.03.2017 (financial year 2016-17) the Director's Report of the 2nd Respondent had reported that no loans were provided by the 2nd Respondent to any 'Related Party', though Rs.7 crores was purportedly disbursed as per the loan agreement dated 2.12.2016.
18. The Learned Senior Counsel for the 2nd Appellant by pointing out that the 'Corporate Debtor' in its 'Annual Report' for the year 2015-16 reported no such loans were availed during the said period and the total borrowing for the financial year 2015-16 shows that no such borrowing existed during financial year 2015-16. As a matter of fact, in regard to the 2nd Respondent/South India Hotels the only entry in the 'Books of the Corporate Debtor' was shown as sum of Rs.49.13 Lakhs.
19. According to the Learned Senior Counsel for the 2nd Appellant, the Annual Reports of the 'Corporate Debtor' for the period 2016-17 reported that no such loans were availed during the said period. In regard to the 2nd Respondent/South India Hotels, the amount is shown as Rs.240.94 lakhs. For the period 2017-18, the Annual Report of the 'Corporate Debtor', prior to going into Insolvency, indicates that the total list of borrowings by the 'Corporate Debtor' and even the purported loan from the 2nd Respondent was not reflected. All the related party loans are said to be 'unsecured' and interest free.
20. The Learned Senior Counsel for the 2nd Appellant puts forward a plea that the Resolution Applicant had applied under the 'Right to Information Act' to the Government of Tamil Nadu to secure the details about the stamp paper Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 8 on which the alleged 'Share Pledge Agreement' was executed and found that the 'Share Pledge Agreement' though was executed in the name of Empee Distilleries Ltd, was never obtained by the said Company, but the 'stamp paper' were purchased by Mr.CK Anand Jayaraj and C.K. Balachander.
21. The Learned Senior Counsel for the 2nd Appellant contends that the fact that aforesaid persons names are recorded shows that the 'stamp paper' on which purported 'Share Pledge Agreement' was executed is itself a fabricated one.
22. The other contention of the Learned Senior Counsel for the 2nd Appellant is that the 'Corporate Debtor' had not recorded any charge in respect of the transactions, at any point of time, earlier to the starting of the Insolvency Proceedings. Furthermore, the 2nd Respondent before the 'Adjudicating Authority' had represented that the shares were sold on 28.10.2018 to M/s Goodyield Investments Pvt Ltd/11th Respondent but the Resolution Applicant had discovered that the Annual Report of the 11th Respondent as on 31.03.2019 had reported total assets worth of Rs.1,21,680/- and the only shares held by the 11th Respondent on 31.03.2019 were the shares in a company named Imphal worth Rs.25000/-.
23. The Learned Senior Counsel for the 2nd Appellant brings it to the notice of this 'Tribunal' that the 'Adjudicating Authority' had not considered the plea where the charge is not registered, such creditor cannot be treated as a 'secured creditor' for the purpose of the 'Code' and resultantly the Share Pledge Agreement could not have been relied upon as creating a 'Security Interest' by the 'Adjudicating Authority', as per decision of this Tribunal in Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 9 Volkswagon Finance Pvt Ltd V. Shree Balaji Printopack Pvt Ltd (vide Comp App (AT)(Ins) No.02/2020).
24. The Learned Senior Counsel for the 2nd Appellant refers to the order of this Tribunal in Interups Inc V Kuldeep Kumar Bassi, (Cmp App (AT)(Ins) No. 1079/2020) wherein it is held that the proceedings for 'Avoidance' can continue after approval of the Resolution Plan and the decision in Venus Recruiters Case does not prohibit the same.
25. The Learned Senior Counsel for 2nd Appellant refers to the judgement of this Tribunal in K.L. Jute Products Pvt Ltd V. Tirupati Jute Inds Ltd (vide Comp App (AT)(Ins) No. 277/2019), in regard to the plea of the 3rd Respondent in respect of Regulation 35A of the CIRP Regulations.
26. On behalf of the Appellants, a plea is made pending disposal of the instant Comp App (AT)(Ins) No. 1/2022, an interim order of restraining the Respondents from alienating or encumbering the 4,00,00,000 shares held by the Respondents in the 3rd Respondent and from alienation or encumbering the assets of the Respondent be granted, in the interest of justice. 1ST RESPONDENT'S PLEAS
27. The Learned Senior Counsel for the 1st Respondent (Appellant in Company Appeal (AT)(CH)(Ins) No.9/2022) submits that in WP 3659/2021 filed by the 2nd Respondent/Apollo Industries before the Hon'ble Madras High Court challenging the maintainability of the Avoidance Application in MA 731/IB/2019 in CP/280/IB/2018 after approval of the Resolution Plan by the 'Adjudicating Authority', on 18.02.2021 an interim direction was issued Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 10 to the Adjudicating Authority from proceeding with the Application and also that an order of Status Quo was directed to be maintained by the parties and a specific direction was issued by Madras High Court to the 9th Respondent (12th Respondent in Writ Petition) not to encumber or transfer the shares of the 2nd Respondent company.
28. The Learned Senior Counsel for the 1st Respondent (in Comp App (AT)(CH)(Ins) No.1/2022 and Appellant in Company Appeal (AT)(CH)(Ins) No.9/2022) refers to the final order dated 04.08.2021 passed by the Hon'ble High Court of Madras in WP No.3659 of 2021 wherein it was observed as under:-
"Till any contrary order is passed by the NCLT or till the disposal of the avoidance application, whichever is later, there will be no further transaction in the shares pertaining to the petitioner herein. Further, no fixed asset of the petitioner should be alienated or encumbered without the express previous leave of the NCLT, Chennai and no other asset or stock in trade or the like may be dealt with or disposed of or alienated or encumbered or any third party right created in respect thereof, except in the usual or ordinary course of business. Here again, it is recorded that according to the successful resolution applicant, the factory of the petitioner remains closed for three years with little prospect of reopening in the immediate future."
and contends that the transaction sought to be avoided by the Resolution Professional as preferential fulfils the requirements of Section 43 Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 11 of the Code and relies on the judgement of the Hon'ble Supreme Court in Anuj Jain V. Axis Bank Ltd.
29. The Learned Senior Counsel for the 1st Respondent/Appellant submits that the 'Adjudicating Authority' had misread the Information Memorandum and rendered a contradictory finding which is not a valid one in the eye of Law.
30. The Learned Senior Counsel for the 1st Respondent/Appellant points out that the Information Memorandum contains a detailed note on the shareholding of the 'Corporate Debtor' in the 2nd Respondent (in Comp App (AT)(CH)(Ins) No.9/2022) and the invocation of the shares pledged by the 1st Respondent. As a matter of fact, the Resolution Applicant was informed of the pending proceedings under Section 43 before the 'Adjudicating Authority' and that subject to the outcome of the pending litigation the Resolution Applicant may get the shares in the 2nd Respondent.
31. The Learned Senior Counsel for the 1st Respondent/Appellant urges before this Tribunal that the Resolution Professional is duty bound to report the update on the implementation of the Resolution Plan and progress at every stage is being regularly monitored by him and in fact, the continuation of Section 43 application under the Code in this connection and the Successful Resolution Applicant had indicated that any benefit from the 'Avoidance Application' shall proceed.
32. In view of the above, on behalf of the 1st Respondent/Appellant (in Comp App (AT)(CH)(Ins) No.9/2019), an interim order of injunction restraining the Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 12 Respondents from in any way dealing with the shares of the 2nd Respondent, pending appeal, is sought for.
2nd RESPONDENT'S SUBMISSIONS
33. The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp App (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) contends that 1st Appellant/SNJ Distilleries Pvt Ltd/Successful Resolution Applicant of the 'Corporate Debtor' is an unrelated third party to the Avoidance Application, being a subject matter of the instant 'Appeal'.
34. The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) adverts to the decision in Venus Recruiters Pvt Ltd V. Union of India & Others, reported in 2020 SCC Online Del 1479 wherein it is observed that an Avoidance Application is meant to give some benefit to the creditors of the Corporate Debtor and not the Resolution Applicant and further it is held that the benefit of Avoidance Transaction cannot go to the Resolution Applicant and the Resolution Applicant cannot prosecute an Avoidance Application.
35. The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) brings it to the notice of this Tribunal that the 1st Appellant/SNJ Distilleries Pvt Ltd was not impleaded consciously in the Avoidance Application by the 'Adjudicating Authority' and its impleadment application was dismissed as a consequence of the impugned Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 13 order, therefore, it is projected on the side of the 2nd Respondent that the Appellant has no 'Locus Standi' to pursue or prosecute and 'Avoidance Application' and resultantly has no locus to prefer the instant 'Appeal'.
36. The Learned Senior Counsel for the 2nd Respondent contends that under Section 43 of the I&B Code, an Application for the preferential transaction(s) is to be preferred by a Live Resolution Professional and in this connection refers to Regulation 35A 'Preferential & Other Transactions' of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
37. The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) projects an argument that the contention advanced on behalf of the Appellants that the shares of the 3rd Respondent are an asset of the 'Corporate Debtor' and was taken over by the Resolution Plan and further that the transaction of invocation of pledge and subsequent sale by the 2nd Respondent is a fraudulent one are mutually destructive argument.
38. The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) brings it to the notice of this Tribunal as per Section 18(1) of the I&B Code, the 'Interim Resolution Professional/Resolution Professional' should have taken possession of the assets of the 'Corporate Debtor' and indeed, the 3rd Respondent's shares Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 14 subject to the 'Present Appeal' were not taken possession of by the Resolution Professional.
39. Continuing further, The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) points out that the Resolution Professional had acknowledged the invocation of the Pledge by the 2nd Respondent and that appropriation of the Pledged Shares was done on 1.10.2018 itself and that the Resolution Professional had opted to question the said 'invocation' and 'appropriation' of shares as a preferential transaction and had not included the said shares as an asset of the 'Corporate Debtor'. Therefore, no contention can be raised that the shares are an asset of the 'Corporate Debtor' and that they were taken over by the Resolution Plan.
40. The Learned Senior Counsel for the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) forcefully submits that the Appellant has no legal interest in the outcome of the preferential transactions.
41. Apart from the above, it is represented on behalf of the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) that Respondent No.11 is an independent 'Corporate Entity' without any common shareholders or directors as a 'Corporate Debtor' or sister concern and is not related to the 'Corporate Debtor' or a sister concern.
42. It is brought to the notice of the Fore, on the side of the 2nd Respondent (vide Comp App (AT)(CH)(ins) No.1/2022) and 1st Respondent (vide Comp Appl Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 15 (AT)(CH(Ins) No.9/2022 i.e. South (India) Hotels Pvt Ltd) that Respondent No.11 (present owner of shares) was not represented before the 'Adjudicating Authority' in the impugned order.
43. Further, it is stated on the side of the 2nd Respondent that the application for Impleadment of Respondent NO.11 was filed more than two years after the filing of the Main Application before the 'Adjudicating Authority' and after obtaining knowledge of the sale and that the said Application appears to be still pending on the file of the 'Adjudicating Authority' and in such circumstances no interim order of restraint can be passed without hearing the Respondent No.11. Also that it is not known whether the Respondent No11 had sold the shares to the third party and any encumbrance was created thereto.
3RD RESPONDENT'S CONTENTIONS
44. The Learned Senior Counsel for the 3rd Respondent/Apollo Distilleries & Breweries Pvt Ltd submits that the 1st Appellant/SNJ Distilleries is a Successful Resolution Applicant of the 2nd Appellant/Corporate Debtor whose Resolution Plan was approved on 20.01.2020 and that the 1st Appellant is not entitled to more than what was mentioned in the 'Information Memorandum' and that the 'Information Memorandum' prepared by the 'Resolution Professional' has stated that 4,00,00,000 shares of the Respondent was pledged to the 2nd Respondent and in the 1st week of October, 2018 the pledge was invoked and that the sais shares were not part of the assets of the 'Corporate Debtor' when the Resolution Plan was being Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 16 proposed/considered/approved and that the present 'Appeal' is not maintainable.
45. The Learned Senior Counsel for the 3rd Respondent (Comp App (AT)(CH(Ins) no. 1/2022) and 2nd Respondent (in Comp Appeal (AT)(CH)(Ins) No. 9/2022) comes out with a plea that the 'Resolution Professional' of the 'Corporate Debtor' had addressed numerous letters to 'TASMAC', the only customer of the 3rd Respondent/Apollo Distilleries & Breweries Pvt Ltd and 'TASMAC' had thereafter stopped issuing indents/Purchase Orders. Besides this no prima facie case is made out for the grant of the interim order, as sought for by the Appellants.
46. The Learned Senior Counsel for the 3rd Respondent cites the Hon'ble Supreme Court decision in Anuj Jain V. Axis Bank Ltd for the proposition that one composite application cannot survive with allegations of fraudulent transactions and preferential transactions. Also that the application before the 'Adjudicating Authority' was filed under Section 43/44 of the Code and that the ambit of enquiry is limited to a preferential transaction.
47. The Learned Senior Counsel for the 3rd Respondent contends that the argument that 100% dues of the Financial Creditors were paid cannot hold any water for the fact that there are 'operational creditors' and statutory authorities who had paid only marginal sums under the Plan and could have benefited from the Avoidance Applications.
48. The Learned Senior Counsel for the 3rd Respondent while rounding up prays for no interim relief be granted to an in favour of the 'Appellants', on the ground of maintainability of the 'Company Appeal'.
Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 17
49. This 'Tribunal' has heard the Learned Counsels appearing for the parties and noticed their contentions.
APPRAISAL
50. On a careful consideration of respective contentions, in view of the fact that the contentious factual and legal issues/controversies (including the aspect of 'Locus' of preferring the Appeal in Comp App (AT)(CH)(Ins) No.1/2022) is raised in the subject matter in issue, after going through the impugned order passed by the 'Adjudicating Authority', this 'Tribunal' opines that there shall be 'no interim order' and that the contentious factual and legal issues/controversies (centring around the Appeals), require a detailed final hearing, of course, after providing due opportunities to all the parties (including unserved Respondents) to complete the pleadings, in the instant Appeals, like filing of 'Replies, Rejoinders', etc.
51. Let notice be issued to Respondent No.4 to 11 in Comp Appeal (AT)((CH)(Ins) No.1/2022 and Respondent No.3 to 9 in Company Appeal (AT)(CH)(Ins) No.9/2022 through speed post returnable on 29.2.2022. Requisites alongwith process fee be paid within three days from today. If the Appellant provides the Emails ID of the Respondents, let notice be issued through Email also.
52. The Appellants are directed to serve copy of the Appeal Paper Book(s)/material papers in both the 'Appeals' to the Respondents within a week. Respondent are directed to file their Reply/Respondent within three weeks thereafter, before the office of the Registry, not through E filing but also Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022 18 through Hard Copy and the copy of the same shall be served to the concerned Counsels appearing for the parties.
53. On receipt of Reply/Response from the Respondents, it is open to the Learned Counsel for the Appellant to file 'Rejoinder', if any, before the 'Office of the Registry', not only through E Filing but also through Hard copy and the copy of the same shall be served to the concerned Counsel well in advance.
54. The Office of the Registry is directed to List the matter on 28.02.2022.
(Justice M. Venugopal) Member (Judicial) (Mr. Kanthi Narahari) Member (Technical) 13th January, 2022 Bm/manu Company Appeal (AT)(CH)(Ins) No.1/2022 and 9/2022