National Company Law Appellate Tribunal
Trimex Industries Private Limited vs Sathavahana Ispat Limited on 2 January, 2023
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
Company Appeal (AT)(CH)(Ins) No.434/2022 & IA Nos.1098 &
1099/2022
(Under Section 61 of the Insolvency and Bankruptcy Code, 2016)
(Arising out of the Impugned Order dated 17.10.2022 in IA/791/2021
in CP(IB) No.17/9/HDB/2020
passed by the 'Adjudicating Authority' (National Company Law
Tribunal, Hyderabad Bench-1)
In the matter of:
Trimex Industries Pvt Ltd.
Trimex Towers, No.1 Subbaraya Avenue,
C.P. Ramaswamy Raod,
Alwarpet, Chennai 600 018. ... Appellant
V
1. Sathavahana Ispat Ltd, Represented by
its Resolution Professional,
Mr. Bhuvan Madan,
A-103, Ashok Vihar Phase -3
Delhi - 1 10052
2. JC Flowers Asset Reconstruction Private Limited
12th Floor, Crompton Graeaves House,
Dr. Annie Besant Road, Worli, Mumbati,
Mumbai City
Maharashtra - 400030.
3. Jindal Saw Limited,
A-1, UPSIDC Industrial Area,
Nandgaon Road kosi Kalan,
Mathura, Uttar Pradesh - 281 403
Company Appeal (AT)(CH)(Ins) No.434/2022 Page 1 of 11
Also at :
Jindal Centre,
12 Bhikaji Cama Place,
New Dehlhi - 110066 ... Respondents
Present :
For Appellant : Mr. Srinath Sridevan, Advocate
For Respondent No.1 / : Mr. S. Ravi, Senior Advocate
For Resolution For Mr.Shashank Agarwal, Advocate
Professional
For Respondent No.2 / : Mr. Shubhabrata Chakraborti, Advocate
For Caveator
For Respondent No.3 : Mr. Vijay K. Singh, Advocate
ORDER
(Virtual Mode) 02.01.2023: Heard Mr. Srinath Sridevan, the Learned Counsel appearing for the 'Appellant'.
2. According to the Learned Counsel for the 'Appellant' / 'Applicant' in IA/791/2021 in CP(IB) No.17/9/HDB/2020, before the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I), on 17.10.2022 the 'observations' have been made in the 'impugned order' are as follows:-
Company Appeal (AT)(CH)(Ins) No.434/2022 Page 2 of 11
'In these circumstances, the reference is answer that the Committee of Creditors cannot be restrained from considering the Resolution Plan of the 3rd Respondent and I agree with the findings of the Hon'ble Judicial Member and accordingly I am of the view that this Application deserves to be dismissed as held by him. I direct the Registry to place the order before the NCLT-Hyderabad to pass appropriate orders with regard to disposal of the Application."
In view of the findings above we make it clear that the Committee of Creditors are at liberty to consider the resolution plans which are already received including that of the 3rd Respondent, for voting and follow up further as per the procedure under the code. With these directions IA No.791/2021 stands dismissed. Restraint order earlier passed stands lifted."
3. Assailing the validity, propriety, legality and correctness of the 'impugned order' dated 17.10.2022, passed by the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) in IA/791/2021 in CP(IB) No.17/9/HDB/2020, the Learned Counsel for the 'Appellant' / 'Applicant' submits that the 'Corporate Debtor' was admitted into the 'Corporate Insolvency Resolution Process' (CIRP), as Company Appeal (AT)(CH)(Ins) No.434/2022 Page 3 of 11 per the order dated 28.07.2021, passed by the 'Adjudicating Authority', (Tribunal) under Section '9' 'Application', filed by one M/s. Thirumala Logistics and consequently an 'Interim Resolution Professional' was appointed and also the 'Moratorium' was 'declared'.
4. It transpires that the Interim Resolution Professional on 04.09.2021, issued a request for 'proposal' for 'repair' and 'maintenance' of working of the 'Corporate Debtor', and the said 'request for proposal', provided with the 'selection' of the 'successful bidder' would be subject to the 'approval' of the 'Committee of Creditors'. Thereafter, when, 'Request for Proposal' (RFP) was issued, the 'sole member' of the 'Committee of Creditor' filed an 'Application' before the 'Adjudicating Authority', (Tribunal) for appointing one Mr. Bhavan Madan, as a 'Resolution Professional' of M/s. Sathavahana Ispat Limited and he was appointed as the 'Resolution Professional' of M/s. Sathavahana Ispat Limited vide order dated 08.09.2021 and the order was received by the Resolution Professional on 15.09.2021.
5. As seen from the public notice issued on 16.09.2021, the 1st Respondent received notice of his appointment as the 'Resolution Professional' on 15.09.2021.
Company Appeal (AT)(CH)(Ins) No.434/2022 Page 4 of 11
6. The grievance of the 'Appellant' / 'Applicant' is that Mr. Bhuvan Madan, was earlier associated with the 'Jindal Group' and had worked as 'Associate Vice President Finance & Treasury', at Jindal Steel & Power Ltd. for a period of 9 years, which was not disclosed before the 'Adjudicating Authority', (Tribunal) and ascertaining to that the 1st Respondent had issued an 'Addendum' on 17.09.2021 to the request for proposal on non-standard term.
7. It is brought to the notice before this 'Tribunal', that the '1st Respondent' / 'Resolution Professional', thereafter, issued an 'Invitation for Expression of Interest' on 05.09.2021, 14.10.2021 and 16.10.2021 by virtue of 'Single Member' of the Committee of Creditors, the 3 rd Respondent / Jindal Saw Limited, Uttar Pradesh was selected as the 'Contractor' for the said 'repair and maintenance work'.
8. The 1st Respondent made a 'public announcement' dated 19.10.2021 as the 3rd Respondent had been awarded as a 'Contractor' for a whopping sum of Rs.226 Crore for a time of seven months until May, 2022, and the scope of 'Contract' was beyond the Corporate Insolvency Resolution Process (CIRP) period.
9. The Learned Counsel for the Appellant points out before this 'Tribunal' that the 'Members' of the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) through the 'Impugned Company Appeal (AT)(CH)(Ins) No.434/2022 Page 5 of 11 order' dated 05.05.2022, concurring on the determination in respect of whether the 2nd Respondent could be directed to disclose all information to the findings, as required for clearing M/s. Sathavahana Ispat Limited by way of SARFAESI Act and to whether the 'Appellant' / 'Applicant' had 'locus standi', to be appointed as an observer in the meetings as 'Member' of the Committee of Creditors of the Corporate Debtor.
10. The 'Members' of the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) had deferred on the issue viz., whether the Committee of Creditors could be restrained from considering the 'Resolution Plan' of the 'Third Respondent' / 'Jindal Saw Limited, Uttar Pradesh' and in fact the 'Judicial Member' of the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) held that there was no legality, requiring willingness of the 'Corporate Deal'. Per contra, the Hon'ble Member (Technical) of the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) took a 'different view' and found that the Corporate Insolvency Resolution Process to be vitiated by fraudulent contact and coalition between various Group businesses of the 2nd and the 3rd Respondents and directed the Committee of Creditors not to consider the 'Resolution Plan', submitted by the 3rd Respondent.
Company Appeal (AT)(CH)(Ins) No.434/2022 Page 6 of 11
11. Because of the diversion of opinion between the 'Two Members' of the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I), the matter was referred to the 3rd Member and viz., the Hon'ble Judicial Member of the 'Adjudicating Authority', (Tribunal) Cuttack Bench and the 3rd Hon'ble Judicial Member, Cuttack Bench took a view that concurring with the view of the Judicial Member of the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I), which according to the 'Appellant' / 'Applicant', the same is incorrect one and therefore this needs to 'set aside' in the instant Comp.
Appl. (AT)(CH)(Ins) No.434/2022, in furtherance of substantial cause of 'Justice'.
12. On behalf of the '1st Respondent' / 'Resolution Professional', the Learned Senior Counsel Mr. S. Ravi points out that the 'Appellant' / 'Applicant' had filed IA/1475/2022 in CP(IB) No.17/9/HDB/2020, before the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I), wherein the present 'Appellant' / 'Applicant' had sought a relief to set aside the decision taken in the 12 th Committee of Creditors meeting of Sathavahana Ispat Limited dated 18.10.2021, in confirming the Jindal Saw Limited as the 'Resolution Applicant' and also prayed for passing an 'Order' in 'setting aside' the 'Letter of Intent' dated 19.10.2022, issued by the 'Resolution Professional' to the '3rd Company Appeal (AT)(CH)(Ins) No.434/2022 Page 7 of 11 Respondent' / 'Jindal Saw Limited', confirming the 'Jindal Saw Limited', as the 'successful Resolution Applicant'. Not resting with these two prayers, the 'Appellant' / 'Applicant', had also prayed for calling a 'fresh Resolution Plan', with respect to the 'Corporate Debtor', by extending the time period for the Corporate Insolvency Resolution Process (CIRP).
13. Admittedly, the present 'Appellant' / 'Applicant', had the benefit of dismissal of IA/791/2021 in CP(IB) No.17/9/HDB/2020, before the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) on 17.10.2022, and has preferred the IA/1475/2022 in CP(IB) No.17/9/HDB/2020, seeking to 'set aside' the 'decision', taken in the 12th 'Committee of Creditors Meeting of Sathavahana Ispat Limited' dated 18.10.2022, in confirming the 3rd Respondent / 'Jindal Saw Limited', as the 'Successful Resolution Applicant', etc.
14. When the 'Appellant' / 'Applicant' has preferred IA/1475/2022 in CP(IB) No.17/9/HDB/2020 before the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I), after an order was passed in IA/791/2021 in CP(IB) No.17/9/HDB/2020 on 17.10.2022, whereby and whereunder the 'Appellant' / 'Applicant' has sought to 'set aside' the 'Decision' taken in the 12th Committee of Creditors meeting of Sathavahana Ispat Limited dated 18.10.2022, in confirming the 3rd Respondent / 'Jindal Saw Limited', as the 'Successful Resolution Company Appeal (AT)(CH)(Ins) No.434/2022 Page 8 of 11 Applicant' and for 'other Reliefs', this 'Tribunal', is of the considered view that the 'Appellant' / 'Applicant' can take all available defences both on facts and in 'Law' / on 'Legal Plane' before the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) in IA/1475/2022 in CP(IB) No.17/9/HDB/2020, which is admittedly coming up for 'Hearing', before the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) on 02.01.2023 (Today) or on any other adjourned date, as the case may be.
15. On behalf of the 2nd Respondent / Caveator, it is brought to the notice of this 'Tribunal' that one Mr. Prakash Sharma (Chartered Accountant) had filed Writ Petition (s) (Civil) No (s).979/2022, before the Hon'ble Supreme Court of India, arraying Union of India & Ors. as the Respondents, seeking to challenge the validity of Section '27' and the Proviso to Section 30(5) of the Insolvency & Bankruptcy Code, 2016, coupled with the Notification dated 11.10.2022 issued by the Reserve Bank of India dealing with the review of the regulatory framework for Assets Reconstruction Companies and the Hon'ble Supreme Court of India on 18.11.2022, ultimately, had dismissed the Writ Petition among other things observing that the Petitioner was not able to satisfy his 'Locus' and 'Bonafides'.
Company Appeal (AT)(CH)(Ins) No.434/2022 Page 9 of 11
16. At this stage, this 'Tribunal', simpliciter, in the instant 'Appeal', without 'expressing any opinion on the Merits' of the matter, one way or the other, and not delving deep, permits the 'Appellant' / 'Applicant' to raise all available factual and legal pleas, before the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I), including the aspect of raising such necessary pleas concerning the recent Order, about which the 'Appellant' / 'Applicant' is 'aggrieved', viz., in respect of the 'impugned order' dated 17.10.2022 in IA/791/2021 in CP(IB) No.17/9/HDB/2020, passed by the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I).
17. Be that as it may, the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I) shall expressly permit the 'Appellant' / 'Applicant' to raise those pleas (both on Facts and in Law), which are available to it in IA/791/2021 in CP(IB) No.17/9/HDB/2020, before the 'Adjudicating Authority', (National Company Law Tribunal, Hyderabad Bench - I), at the time of 'Hearing' of IA/1475/2022 in CP(IB) No.17/9/HDB/2020 in a conclusive manner and after providing an opportunity of 'Hearing' to the other side, by adhering to the 'Principles of Natural Justice', is to pass a fair, just and a reasoned Order (speaking one) on 'Merits,' by adverting to the pleas raised by countering them and to pass 'final Orders', of course, uninfluenced and untrammelled with any Company Appeal (AT)(CH)(Ins) No.434/2022 Page 10 of 11 of the 'observations' made by this 'Tribunal', in this Comp. App. (AT)(CH)(Ins) No.434/2022.
With the aforesaid 'Observations and Directions', the instant Comp. App. (AT)(CH)(Ins) No.434/2022 stands 'disposed of'. The connected IA/1098/2022 (For 'Exemption') and IA/1099/2022 (For 'Stay) are Closed.
[Justice M. Venugopal] Member (Judicial) [Shreesha Merla] Member (Technical) ghk/tm Company Appeal (AT)(CH)(Ins) No.434/2022 Page 11 of 11