National Company Law Appellate Tribunal
Pani Logistics vs Sona Alloys Pvt Ltd & Ors on 4 April, 2022
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
COMPANY APPEAL (AT) (INSOLVENCY) No. 04 of 2021
And
I.A. No. 2146 of 2021
(Arising out of Order dated 04.12.2020, passed by National Company Law
Tribunal, Ahmedabad Bench, Ahmedabad, Court 2 in IA No. 397 of 2020 in
C.P. (IB) No.- 586/NCLT/AHM/2019)
IN THE MATTER OF:
Pani Logistics,
Through its Sole Proprietor Ms. Kiran M
Jain,
No. 35 A, Ward No. 19 Patel Nagar,
3rd Cross, Opp. Post Office,
Ananthpur Road,
Ballari, Karnataka - 583101. ...Appellant
Versus
1. Sona Alloys Private Limited
Through its Resolution Professional
Mr. Vikas G. Jain,
R/o 4th Floor, Medi-Max House
Opp. Karnavati Hospital, Ellis Bridge
Ahmedabad, Gujarat - 380006. ...Respondent No. 1
2. Ganga Advisory Private Limited
Through its Liquidator
Mr. Sachin Dinakar Bhattbhatt
E - 302, Ashawari Apartment Nr. Fun
Republic, Satellite, Ahmedabad,
Gujarat - 380005. ...Respondent No. 2
3. Nueromed Imaging Centre Pvt. Ltd.
Through its Liquidator,
Mr. Umesh Harjivandas Ved
403 SAKAR - 1, Near Gandhigram
Railway Station, Opposite Nehru Bridge,
Navrangpura Ahmedabad,
Gujarat - 380006. ...Respondent No. 3
4. Lonand Cement Private Limited,
A Private Limited Non-Government
-2-
Company. Limited by shares registered
under the provisions of the Companies
Act, 1956 bearing
CIN: U26941GJ2011PTC066099,
R/o. 4th Floor, Medi-Max Opp. Karnavati ...Respondent No. 4
Hospital, Ellisbridge Ahmedabad Gujarat
- 380006.
5. Yamuna Advisory Private Limited,
A Private Limited Non-Government
Company. Limited by shares registered
under the provisions of the Companies
Act, 1956 bearing
CIN: U74999GJ2009PTC055956,
R/o. 403 Sakar 1, Near Gandhigram
Railway Station, Opp. Nehru Bridge,
Navrangpura, Ahmedabad
Gujarat - 380006. ...Respondent No. 5
6. Tulsi Trimpex Private Limited, A
Private Limited Non-Government
Company. Limited by shares registered
under the provisions of the Companies
Act, 1956 bearing
CIN: U51109WB1994PTC063712,
R/o. 17 Deodar Street Kolkata,
West Bengal - 700019. ...Respondent No. 6
For Appellant: Ms. Vishaka Gupta, and Ms. Ankita G.
Shelke, Advocates.
For Respondent No. 3: Mr. Ajit Kumar Sinha, Sr. Advocate with
Mr. Umesh Harivandas Ved, Advocates
for R-3.
For Respondent No. 2: Ms. Senu Nizar, Advocate for R-2.
For Respondent No. 1: Mr. Alok Dhir, Mr. Sumit Shukla, Ms.
Varsha Banerjee, Advocates for R-1.
For Respondent: Mr. Sachin Dinakar Bhattbhatt, Advocate
for Respondent.
For IA No. 2146/2021: Mr. Aditya Sharma, Mr. Siddharth
Nigotia, Mr. Aditya Shekhar, Advocates
in IA No. 2146/2021
Company Appeal (AT) (Insolvency) No. 04 of 2021
And
I.A. No. 2146 of 2021
-3-
JUDGEMENT
(Per: Shreesha Merla, Member (T))
1. Aggrieved by the Impugned Order dated 04/12/2020 in I.A. No. 397 of 2020 in C.P. (IB) No. 586/NCLT/AHM/2019 passed by the Learned Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad, Court - II), M/s. Pani Logistics/'The Financial Creditor' preferred this Appeal. By the Impugned Order, the Adjudicating Authority has dismissed the Application preferred by the Liquidator seeking the following relief(s):
"i. Order and direct the substantive consolidation of the Corporate Debtor and the Respondents Nos. 2-6 into a single proceedings solely for the purpose of CIRP in accordance with the provisions of the Code, including but not limited to the acceptance, confirmation and all other actions with respect to the resolution plan for the Corporate Debtor and the Respondent Nos. 2-6 and any and all amendments or modifications thereto, in such consolidated proceedings;
ii. Order and direct that solely for the purpose of the consolidated proceedings, all assets and liabilities of the Corporate Debtor and the Respondent Nos 2-6 are consolidated and are deemed to be assets and liabilities of all the consolidated Corporate Debtors;
iii. That each and every claim filed in the individual proceedings against the Respondent Nos. 2&3 be deemed to be filed against the Corporate Debtor and Respondent Nos. 2-6;
iv. That the appointment of a common Resolution Professional be made in order to carry out the obligations and functions of a Resolution Professional in accordance with provisions of the Code for the consolidated proceedings;
v. That a common Committee of Creditors be constituted for the Corporate Debtor and the Respondents Nos. 2-6;
Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -4- vi. That a comprehensive Resolution Plan dealing with the Corporate Debtor and the Respondent Nos 2-6 may be formulated and approved by the common Committee of Creditors and put up for approval before this Tribunal for its approval in accordance with the provisions of the Code;
vii. Any such order and/ or relief that this Hon'ble Tribunal deems fit in the interest of justice and equity."
2. The Adjudicating Authority, while dismissing the Application, preferred by the Liquidator, observed as follows:
"6. It is a matter of record that the CIRP of the Corporate Debtor/Respondent No. 1, Sana Alloys Pvt. Ltd., admitted on 16.06.2020 vide C.P.(I.B) No. 586/2019. Thereafter, against the Ganga Advisory Pvt. Ltd. (Respondent No. 2) CIRP is initiated by the Adjudicating Authority on 24.01.2019 on filing an application under section 7 of the IB Code by Pani Logistics and thirdly against Neuromed Imaging Centre Pvt. Ltd., CIRP is initiated on 12.07.2019 by this Adjudicating Authority on filing an application by Mahaveer transport under section 7 of the IB Code.
7. Evidently, as also matter of record that there are 3 separate orders of admission against the 3 different Companies (Corporate Debtors) having separate entities. Further, the CIRP is initiated on the basis of separate cause of actions, defaults and the amount due to the different creditors. As such, when these three companies are separate entities, the consolidation is not at all possible.
8. It is a matter of record that the Ganga Advisory Pvt. Ltd. and Neuromed Imaging Centre Pvt. Ltd. are under liquidation. It is also a matter of record that Respondent No. 1, 2 and 3 are not group companies, hence, the question of any consolidation of the properties does not arise at all.
9. Though, the Respondent No. 2, 3, 5 and 6 hold substantial share in the Corporate Debtor but mere shareholding does not mean that these are group companies. Had it been group company, there would have been a single order for initiation of CIRP. Since, Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -5- the companies are holding separate entities and there is separate cause of action and date of default on the part of the Corporate Debtor, the CIRP proceeding has been initiated separately. Moreover, the IB Code does not provide for any consolidation of the Company when the Companies are holding substantial shares in each other. It is seen that the Applicant has placed on record number of citations and the case laws. There is no dispute with regard to those case laws, however, it varies from case to case as well as factual parameters. Moreover, the object of IB Code is resolution and not the liquidation, as such.
10. It is pertinent to note that Substantial consolidation as a remedy should always be treated as an exception rather than the rule. Moreover, this remedy can be an option for group companies however, in the instant matter the companies are not group companies but only hold substantive shares in the Corporate Debtor.
11. Under the above facts and circumstances, the instant application is not maintainable. Accordingly, stands disposed of."
3. Submissions of the Learned Counsel appearing on behalf of the Appellant:
Learned Counsel appearing for the Appellant strenuously contended that on 04/03/2020, Liquidation Process was initiated against the second Respondent/'M/s. Ganga Advisory Private Limited' in CP (IB) No. 238/2013; on 16/06/2020, CIRP was initiated against the first Respondent/'Sona Alloys Private Limited' (the 'Corporate Debtor' herein) in CP (IB) No. 586/NCLT/AHM/2019; on 07/09/2020 Liquidation Process was initiated against the third Respondent/'Nueromed Imaging Centre Private Limited' in CP (IB) No. 237/2018, on 21/07/2020, the Appellant preferred the Application for substantial consolidation of the Respondent Company for CIRP.
Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -6- Vide Order dated 04/12/2020, the Adjudicating Authority has rejected the Application for substantial consolidation on the ground that mere shareholding does not mean that the Respondent Companies are group Companies.
The Appellant is part of the CoC of Respondents 1 to 3 and the voting share of the Appellant is as hereunder:
Corporate Debtor Voting Share of the Appellant Respondent No. 1 0.264% Respondent No. 2 69.22% Respondent No. 3 2.9% Learned Counsel for the Appellant argued that there are several grounds conducive for consolidation which are detailed as hereunder:
Grounds for Consolidation
1. Common Control, Common Directors and Cross Shareholding o Amit Kumar Jain is the Common Director of Respondent No. 1 to 6.
o Amit Kumar Jain and his family members have major shareholding in Respondent No. 1 to 6.
o Respondent No. 2 to 6 cumulatively have about 50% shareholding in Respondent No. 1.
o Audit Report of Respondent No. 3 provides the list of connected parties of Respondent No. 3. Item 18 is Respondent No. 6 (Tulsi Trimpex), Item 20 is Respondent No. 4 (Lonand Cement), Item 21 is Respondent No. 5 (Yamuna Advisory), Item 22 is Respondent No. 2 (Ganga Advisory) and Item No. 25 is Respondent No. 1 (Sona Alloys).
o Respondent No. 2 and 4 to 6 have Common Directors with Respondent No. 3.
o Respondent No. 1 is an Associate Company of Respondent No. 3.
o Forensic Audit Report of Respondent No. 2 states:
"It is to be noted that the authorised signatory is the same in case of Neuromed Imaging, Narayani Vyapar, Tulsi Trimpex and Yamuna Advisory. As it was signed by same person, it appears that all these are related parties."
Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -7-
2. Common Assets and Liabilities o The Forensic Audit reports of Respondent No. 2 and 3, respectively demonstrate that the transactions between the Respondents are classified as Relate Party Transactions.
o Respondent No. 2, in its Reply at para 7 of its Affidavit states, "..multiple loan liabilities of Respondent No. 1 were transferred in the books of Respondent No. 2 for a consideration of interest of 9% payable to the creditors. Hence, the Respondents are dependent upon each other for their economic survival and their accounts are interlinked for benefit of each other."
o The Audit Report of Respondent No. 3 at 4.4.7 records the following:
"The 'Corporate Debtor' has provided the Corporate guarantee to SBI Cap. Trustee Co. Ltd. on behalf of M/s. Sona Alloys Private Limited against the loan of Rs.11,59,97,00,000/- and also NICPL has mortgaged his office premises to SBI Cap. Trustee Co. Ltd. on behalf of M/s. Sona Alloys Private Limited."
3. Interdependence and Interlacing of Finance o Respondent No. 4 to 6 are financial creditors of Respondent No. 2 and 3.
o The Forensic Audit of Respondent No. 2 records, "on basis of oral request and mutual understanding with Rishabh Jain, SAPL (Respondent No. 1) and Ganga (Respondent No. 2), they transferred the loan liability of Rishabh Jain and SAPL to Ganga in their books. For which Ganga agreed to pay 9% interest, which is also reflected in Form 26AS"
o Funds of Respondent No. 2 to 6 are infused in Respondent No. 1 to carry out its business activities. o Respondents depend upon each other for their existence.
Learned Counsel submitted that Respondents 4 to 6 are 'Financial Creditors' of Respondents 2 & 3 and placed reliance on the Forensic Audit Reports of the Respondents 2 & 3.
Learned Counsel strenuously contended that the Respondents come within the definition of 'Group Companies' as defined under Section 2(6) of the Companies Act, 2013 as the Respondent Companies have common directorship and shareholding. Learned Counsel relies on the Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -8- doctrine of substantial consolidation applied in the case of 'State Bank of India' Vs. 'Videocon Industries Limited & Anr.' C.P. (IB) No. 02/2018 dated 08/08/2019.
4. Submissions of the Resolution Professional (RP) on behalf of the 1st Respondent/'Corporate Debtor':
Learned Counsel representing the first Respondent submits that the Appellant herein has filed I.A. 397/2020 seeking substantive consolidation before the Adjudicating Authority as on 21/07/2020, even before the IRP rejected the claim of the Appellant on 22/07/2020 meaning thereby that the Appellant much before knowing about the verification and status of Admission/Rejection of its Claim, malafidely proceeded to file the Application of consolidation dated 21/07/2020 in abuse of process of law.
The Adjudicating Authority has rightly rejected the Application as Respondents 1 to 3 are not 'Group Companies' though Respondents 2, 3, 5 & 6 hold substantial share in the 'Corporate Debtor' but mere shareholding does not mean that they are group Companies.
In response to Form G published by the RP as per eligibility criteria fixed by the Committee of Creditors ('CoC') one of the Resolution Plans submitted by 'MTC Business Private Limited' was found as most feasible and viable and hence voted in form by the Committee with 99.732% vote share. Learned Counsel further contended that the Resolution Plan provides for treatment of the Claim filed by the Appellant as per the provisions of the Insolvency and Bankruptcy Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -9- Code, 2016, (hereinafter referred to as 'the Code') and need not be interfered with.
On 22/03/2021, this Tribunal directed the Adjudicating Authority to pass any Order either Approving/Rejecting the Resolution Plan. On 26/05/2021, disregarding the fact that the proceedings were stalled, the Appellant filed I.A. dated 26/05/2021 for rejection of the Resolution Plan which is contrary to the spirit of the Code. To expedite the disposal of the Application for the avoidance transactions, RP preferred IA 2501/2021 and prayed before this Tribunal for direction that Order dated 22/03/2021 shall not defer the hearing of avoidance Application and all such IAs pending adjudication. The said Application has not been listed before this Tribunal. It is submitted that the Appeal was filed after 300 days in the present CIRP and there is no case for consolidation in accordance with the provisions of the Code.
The case of 'State Bank of India' (Supra) is not applicable to the facts of this case as it provides an inclusive list of common control, common directors, common assets, common liabilities, intertwined accounts, cross shareholding and pooling of resources etc., which in the instant case are absent. Hence, consolidation and further delay would only add to the huge burden of the CIRP cost and would only cause irreversible loss not only to the 'Corporate Debtor' but also to all the other stakeholders.
Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -10- Assessment:
5. The brief point which falls for consideration in this Appeal is whether the Adjudicating Authority was justified in rejecting the substantial consolidation prayed for.
6. Succinctly put, the admitted facts are that the first Respondent/the 'Corporate Debtor' is undergoing CIRP where the Resolution Plan is under consideration. The status of the other Respondents with respect to the proceedings under the Code is detailed as hereunder:
Parties Company Name Status Business
Respondent No. 1 SONA Alloys Pvt. Under CIRP Engaged in
Ltd., through its (Resolution Plan producing Pig
Resolution under Iron, Mild
Professional, Mr. consideration) Steel, Alloys
Vikas G. Jain Steel
Intermediate
and rolled
products.
Resolution Plan
approval by
CoC on
17.03.2021.
Respondent No. 2 Ganga Advisory Under Liquidation Engaged in
Private Limited (CIRP Order - providing
through its 24.01.2019) finance to
Liquidator, Mr. (Liquidation Order various
Umesh - 04.03.2020) companies in
Harjivandas Ved. the form of
investment
Respondent No. 3 Nueromed Under Liquidation Engaged in
Imaging Centre (CIRP Order Diagnosis
Private Limited 12.07.2019) Centers, Citi
(Liquidation Order Scan Centre
- 07.09.2020) with all type of
facilities
Respondent No. 4 Lonand Cement Solvent Company -
Pvt. Ltd.
Respondent No. 5 Yamuna Advisory Solvent Company -
Private Limited
Respondent No. 6 Tulsi Trimpex Solvent Company -
Private Limited
Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -11-
7. What can be gleaned from the submissions made by all the parties is encapsuled briefly as follows:
CIRP of the first Respondent/'M/s. Sona Alloys Private Limited' was admitted on 16/06/2020 in CP(IB) No. 586/2019.
CIRP was initiated against 'Ganga Advisory Private Limited'/second Respondent by 'M/s. Pani Logistics' and is currently under Liquidation which was passed vide Order dated 04/03/2020.
Liquidation Process was initiated against 'M/s. Neuromed Imaging Centre Private Limited'/ the third Respondent on 07/09/2020 in CP(IB) No. 237/2018.
It is evident that there are three distinctly unrelated orders of Admission against three different Companies/'Corporate Debtors' having different identities.
The 'date of default' and the stage of the Insolvency Proceedings of the Respondent Companies is at different junctures.
A perusal of the business activities and operations carried out by the Respondent Companies show that they can never form a single group identity apart from the fact that the Learned Counsel for the Appellant has not brought to the notice of this Bench under which provisions of the Code such a substantive consolidation is provided for.
The Consolidation Application IA No. 397/2020 was filed solely by the Appellant on 21/07/2020 even before the IRP rejected the Claim of the Appellant on 22/07/2020 vide an email. We find force in the contention of the RP that the Appellants' prayer to the adjudication of the status of Admission/rejection of their Claim filed this Application Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -12- against the total claim of Rs. 7.33Crs./-, part of the Claim submitted by the Appellant was admitted for Rs.4.99Crs./-. The Resolution Plan was approved by the CoC by a majority of 99.732% voting share on 17/03/2021 in the 9th CoC Meeting. At this juncture, we find it relevant to place reliance on the ratio of the Hon'ble Supreme Court in 'K Sashidhar' Vs. 'Indian Overseas Bank & Ors.' 2019 12 SCC 150, has observed as follows:
"57. ...Indubitably, the remedy of appeal including the width of jurisdiction of the appellate authority and the grounds of appeal, is a creature of statute. The provisions investing jurisdiction and authority in NCLT or NCLAT as noticed earlier, have not made the commercial decision exercised by CoC of not approving the resolution plan or rejecting the same, justiciable. This position is reinforced from the limited grounds specified for instituting an appeal that too against an order "approving a resolution plan" under Section 31. First, that the approved resolution plan is in contravention of the provisions of any law for the time being in force. Second, there has been material irregularity in exercise of powers "by the resolution professional" during the corporate insolvency resolution period. Third, the debts owed to operational creditors have not been provided for in the resolution plan in the prescribed manner. Fourth, the insolvency resolution plan costs have not been provided for repayment in priority to all other debts. Fifth, the resolution plan does not comply with any other criteria specified by the Board. Significantly, the matters or grounds-- be it under Section 30(2) or under Section 61(3) of the I&B Code --are regarding testing the validity of the "approved" resolution plan by CoC; and not for approving the resolution plan which has been disapproved or deemed to have been rejected by CoC in exercise of its business decision."
[emphasis supplied] The Hon'ble Supreme Court in 'Ghanashyam Mishra and Sons Private Limited' Vs. 'Edelweiss Asset Reconstruction Company Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -13- Limited Through the Director & Ors.', (2021) 166 SCL 237 (SC), dealing with the issue of commercial wisdom CoC and the jurisdiction of the Tribunal to interfere in the same has observed as follows:-
"150. It will therefore be clear, that this Court, in unequivocal terms, held, that the appeal is a creature of statute and that the statute has not invested jurisdiction and authority either with NCLT or NCLAT, to review the commercial decision exercised by CoC of approving the Resolution Plan or rejecting the same.
151. The position is clarified by the following observations in paragraph 59 of the judgment in the case of K. Sashidhar (supra), which reads thus:
"59. In our view, neither the adjudicating authority (NCLT) nor the appellate authority (NCLAT) has been endowed with the jurisdiction to reverse the commercial wisdom of the dissenting financial creditors and that too on the specious ground that it is only an opinion of the minority financial creditors....."
152. This Court in Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) after reproducing certain paragraphs in K. Sashidhar (supra) observed thus:
"Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within the four corners of Section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and Section 32 read with Section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar"
153. It can thus be seen, that this Court has clarified, that the limited judicial review, which is available, can in no circumstance trespass upon a business decision arrived at by the majority of CoC.
154. In the case of Maharashtra Seamless Limited (supra), NCLT had approved the plan of appellant therein with regard to CIRP of United Seamless Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -14- Tubulaar (P) Ltd. In appeal, NCLAT directed, that the appellant therein should increase upfront payment to Rs.597.54 crore to the "financial creditors", "operational creditors" and other creditors by paying an additional amount of Rs. 120.54 crore. NCLAT further directed, that in the event the "resolution applicant" failed to undertake the payment of additional amount of Rs.120.54 crore in addition to Rs. 477 crore and deposit the said amount in escrow account within 30 days, the order of approval of the 'resolution plan' was to be treated to be set aside. While allowing the appeal and setting aside the directions of NCLAT, this Court observed thus:
"30. The appellate authority has, in our opinion, proceeded on equitable perception rather than commercial wisdom. On the face of it, release of assets at a value 20% below its liquidation value arrived at by the valuers seems inequitable. Here, we feel the Court ought to cede ground to the commercial wisdom of the creditors rather than assess the resolution plan on the basis of quantitative analysis. Such is the scheme of the Code. Section 31(1) of the Code lays down in clear terms that for final approval of a resolution plan, the adjudicating authority has to be satisfied that the requirement of subsection (2) of Section 30 of the Code has been complied with. The proviso to Section 31(1) of the Code stipulates the other point on which an adjudicating authority has to be satisfied. That factor is that the resolution plan has provisions for its implementation. The scope of interference by the adjudicating authority in limited judicial review has been laid down in Essar Steel [Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta, (2020) 8 SCC 531], the relevant passage (para 54) of which we have reproduced in earlier part of this judgment. The case of MSL in their appeal is that they want to run the company and infuse more funds. In such circumstances, we do not think the appellate authority ought to have interfered with the order of the adjudicating authority in directing the successful resolution applicant to enhance their fund inflow upfront."
155. This Court observed, that the Court ought to cede ground to the commercial wisdom of the creditors rather than assess the resolution plan on Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -15- the basis of quantitative analysis. This Court clearly held, that the appellate authority ought not to have interfered with the order of the adjudicating authority by directing the successful resolution applicant to enhance their fund inflow upfront.
156. It would thus be clear, that the legislative scheme, as interpreted by various decisions of this Court, is unambiguous. The commercial wisdom of CoC is not to be interfered with, excepting the limited scope as provided under Sections 30 and 31 of the I&B Code."
(Emphasis Supplied) From the aforenoted Judgements, it is clear that unless there is any material irregularity or that the Resolution Plan does not meet the essential requisites under Section 30(2) of the Code, the Learned Adjudicating Authority has very limited jurisdiction regarding the approval of the 'Resolution Plan'. When R-2 & R-3 are already under Liquidation, the question of consolidation, when Adjudicating Authority has such limited jurisdiction is not executable. In the instant case, the Resolution Plan has not yet been approved on account of the Order of this Tribunal directing the Adjudicating Authority not to pass any Order with respect to approval/rejection of the Resolution Plan. Respondents 4 to 6 cannot be brought under the Resolution Process of the Code for the simple reason that there is no material on record to establish any default being committed by the said Respondents under the Code.
The second Respondent is already undergoing Liquidation Process since the last two years and this Tribunal is of the earnest view that the clock cannot be set back at this stage.
Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -16- Respondent 3 is also undergoing Liquidation Process since 07/09/2020 and this Tribunal is of the considered opinion that no interference can be warranted in terms of any kind of consolidation at this stage.
Mere common shareholding does not give any substantial grounds to the Appellant herein to seek substantive consolidation based on the facts and circumstances of the attendant case on hand. The Hon'ble Supreme Court has time and again stressed on the importance of the adherence to timelines as laid down in 'Ebix Singapore Pvt. Ltd.' Vs. 'Committee of Creditors of Educomp Solutions Ltd. & Anr.', [2021 SCC OnLine SC 707]
8. For all the forgoing reasons and having regard to the fact that all the Respondent Companies are in different stages of CIRP/Liquidation under the Code having different 'dates of default', separate causes of action, and unrelated business activities, this Tribunal is of the earnest view that the Adjudicating Authority has rightly passed the Impugned Order.
9. We see no illegality or infirmity in the Order passed by the Adjudicating Authority. Hence, this Appeal fails and is dismissed accordingly. No Order as to costs.
10. I.A. 2146/2021 is preferred by 'MTC Business Private Limited'/the Successful Resolution Applicant in the ongoing CIRP of the first Respondent/'Corporate Debtor' on the ground that the Resolution Plan has been approved by a majority of 99.732% of the shares of the CoC and is therefore a necessary party.
Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021 -17-
11. For all the aforenoted reasons in Company Appeal (AT) (Insolvency) No. 04 of 2021, this I.A. is disposed of.
12. The Registry is directed to upload the Judgement on the website of this Tribunal and send a copy of this Judgement to the Learned Adjudicating Authority (National Company Law Tribunal, Ahmedabad) forthwith.
[Justice Anant Bijay Singh] Member (Judicial) [Ms Shreesha Merla] Member (Technical) New Delhi 04th April, 2022 himanshu Company Appeal (AT) (Insolvency) No. 04 of 2021 And I.A. No. 2146 of 2021