National Company Law Appellate Tribunal
Anil Tayal Resolution Professional For ... vs Committe Of Creditors Of M/S Horizon ... on 6 September, 2022
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH,
NEW DELHI
Company Appeal (AT) (Insolvency) No. 439 of 2021
[Arising out of order dated 31.05.2021 in (IB) 266 (ND)/2019 IA/1005/2021
passed by the Ld. Adjudicating Authority (National Company Law Tribunal,
New Delhi Bench-II)]
IN THE MATTER OF:
Anil Tayal
Resolution Professional
For M/S Horizon Buildcon Pvt. Ltd.
201, Sagar Plaza, Plot No. 19,
District Centre, Laxmi Nagar, New Delhi-110092.
...... Appellant.
Versus
Committee of Creditors of
M/S Horizon Buildcon Pvt. Ltd.
201, Sagar Plaza, Plot No. 19,
District Centre, Laxmi Nagar, New Delhi-110092.
....... Respondent.
Present:
For Appellant: Mr. Abhishek Anand, Mr. Karan Kohli, Advocates.
For Respondent:- Mr. Pulkit Thareja, Mr. Surendra Kumar, Advocates
(COC).
Ms. Mayuri Raghuwanshi, Advocate (Member of
COC) (IOB).
Mr. Vyom Raghuvansi, Ms. Purvat Wali, Advocates
(IOB).
2
JUDGMENT
(06th September, 2022) Justice Anant Bijay Singh;
This Appeal has been preferred by the Appellant - Anil Tayal, Resolution Professional of M/S Horizon Buildcon Pvt. Ltd. being aggrieved and dissatisfied by the order dated 31.05.2021 in I.A. No. 1005 of 2021 in CP (IB) No. 266 (ND) of 2019 passed by the Ld. Adjudicating Authority (National Company Law Tribunal, New Delhi Bench-II) whereby and where under the Application filed by the Resolution Professional (Appellant herein) under Section 60(5) and Section 12 of the Insolvency and Bankruptcy Code, 2016 (for short IBC) was dismissed and the Adjudicating Authority observed as follows:
"14. So in the light of the aforesaid facts and circumstances as well as the decisions referred (Supra), when we consider the case in hand, we are of the considered view that since the applicant through the COC has failed to consider the Resolution Plan pending for consideration within the extended period of 40 days and also could not provide the cogent reasons for not complying with the direction, we are not inclined to extend the CIRP period by another 60 days beyond the period of 370 days."
2. The facts giving rise to this Appeal are as follows:
i) The Adjudicating Authority vide its order dated 08.11.2019 was pleased to admit the Compony Application (IB) No. 266(ND)/2019 filed on behalf of the Financial Creditor i.e. R. Tarkeshwar Narayan against the Corporate Debtor and initiated the Corporate Insolvency Resolution Process (for short CIRP) Company Appeal (AT) (Insolvency) No. 439 of 2021 3 under Section 7 of the IBC and appointed Mr. Sanjay Gupta having Registration No. IBBI/IPA-001/IP-P00117/2017-18/10252 as the Interim Resolution Professional.
ii) The IRP made a public announcement on 16.11.2019 in FORM-A in terms of Regulation 6(1) of the IBC. On 10.12.2019 first meeting of the Committee of the Creditors was convened wherein the members of the CoC rejected the appointment of IRP as the Resolution Professional.
iii) Further case is that on 04.01.2020 second meeting of the CoC was convened wherein, the IRP apprised the members of the CoC that in terms of Regulation 16A (1) of the CIRP Regulations, 2016 Mr. Pawan Kumar Garg has received the maximum number of votes and is therefore, appointed as the Authorized Representative for homebuyers.
iv) Further case is that IRP on 11.01.2020 in terms of Section 25(2)(h) read with Regulation 36(4) of the CIRP Regulation, 2016 invited Expression of Interest for submissions of Resolution Plans for the Corporate Debtor and the same were published in the English Newspaper, namely 'Financial Express' and Hindi newspaper, 'Jansatta'.
v) On 10.02.2020 third meeting of CoC was held wherein the IRP apprised the members of CoC that pursuant to publication of the Form-G a total of 6 Prospective Resolution Applicant has sent their EOI out of which 3 were held to be ineligible. Thereafter, forth meeting of CoC was held on 20.02.2020 wherein the Agenda for the appointment of Mr. Praveen Kumar Agarwal as the Resolution Professional was put for e-voting which was approved by 100% Company Appeal (AT) (Insolvency) No. 439 of 2021 4 voting share and on 15.07.2020 the Adjudicating Authority was pleased to allow the Application bearing I.A. No. 1752 of 2020 thereby, appointing Mr. Praveen Kumar Agarwal as the Resolution Professional.
vi) Further case is that on 21.03.2020 fifth meeting of CoC was held wherein the Erstwhile IRP apprised the members of the CoC that one of the Prospective Resolution Applicant being IRIDIA Homebuyers Association has submitted the Resolution Plan out of the 3 Prospective Resolution Applicants. Further, upon discussions and deliberations, it was decided by the CoC that the agenda for publishing fresh FORM-G should be considered after considering the one Resolution Plan received.
vii) On 27.07.2020 sixth meeting of CoC was held wherein the CoC passed the following Resolutions for filing of an application with the Adjudicating Authority for the extension of the period for CIRP by 90 days. The erstwhile Resolution Professional filed an application bearing I.A. No. 3468 of 2020 before the Adjudicating Authority seeking extension of 90 days beyond the period of 180 days. Thereafter, on 21.09.2020 the Adjudicating Authority was pleased to issue notice in the Application seeking directions for treatment of claim of Indian Overseas Bank as unsecured financial creditor.
viii) Further case is that on 01.10.2020 seventh meeting of CoC was held wherein the Appellant, Mr. Anil Tayal having Registration No. IBB/IPA-001/IP-
P01118/2018-19/11818 was approved as the Resolution Professional by 68.77% voting share in favour. Thereafter, on 16.10.2020 the CoC filed an Application being I.A. No. 4391 of 2020 seeking replacement of Resolution Company Appeal (AT) (Insolvency) No. 439 of 2021 5 Professional which came up for hearing on 16.10.2020 wherein, the Adjudicating Authority allowed the application thereby, appointing the Appellant herein as the Resolution Professional for the Corporate Debtor and granted liberty to the Appellant herein to file an amended application in I.A. No. 3468 of 2020 for the purpose of seeking extension of 90 days beyond the period of 180 days in the CIRP of the Corporate Debtor.
ix) On 09.11.2020, the Adjudicating Authority allowed the application filed by the Appellant and was pleased to extend the CIRP period of Corporate Debtor by 90 days and further excluded the period of 98 days from the CIRP of the Corporate Debtor.
x) Further on 12.11.2020 eight meeting of CoC was held wherein the resolution seeking extension of 60 days beyond the period of 270 in the CIRP of the Corporate Debtor by the Adjudicating Authority was approved.
xi) Further case is that on 27.01.2021 the Adjudicating Authority was pleased to note that the Application bearing I.A. No. 140 of 2021 seeking directions for treatment of claim of Indian Overseas Bank as unsecured financial creditor.
xii) On 03.02.2021 the Adjudicating Authority passed the Impugned order whereby whilst allowing the 60 days extension, the Adjudicating Authority rejected exclusion of 20 days consumed due to pendency of legal proceedings and extended the CIRP period by 40 days beyond the period of 330 days from the expiry of the period of 330 days i.e. 10.01.2021 which were going to expired on 19.02.2021. On 15.02.2021 the Adjudicating Authority heard the Company Appeal (AT) (Insolvency) No. 439 of 2021 6 Application bearing I.A. No. 3975 of 2020 in part and posted the matter for hearing on 03.03.2021. Thereafter, this Appellate Tribunal vide Judgment dated 23.02.2021 was pleased to allow the Appeal and exclude the period of judicial intervention from 21.10.2020 to 09.11.2020 (period covering time spent in pursuing the extension Application) and from 12.01.2021 to 03.02.2021 (period for which the Orders were reserved by the Adjudicating Authority) for the purposes of calculation of CIRP Period.
xiii) On 06.02.2021 ninth meeting of CoC wherein the Resolution Plan was considered by the members and requested the Prospective Resolution Applicant to submit a revised Resolution Plan in the matter of the Corporate Debtor. The members of the CoC resolved to seek extension of 60 days of CIRP period with 100% voting share. Thereafter, tenth meeting of CoC was held wherein the members of the CoC discussed the Resolution Plan submitted by the Prospective Resolution Applicant. Since the issue with respect to the claim of Indian Overseas Bank being secured and unsecured is pending adjudication before the Adjudicating Authority and thereafter, the outcome will affect the Resolution Plan. In view thereof, the members of CoC instructed the Appellant to file an application seeking 60 days extension in order to consider the Resolution Plan as resolved in 9th meeting of CoC convened on 06.02.2021.
xiv) Further case is that an Application bearing I.A. No. 1005 of 2021 was filed seeking extension of 60 days of CIRP period before the Adjudicating Authority and after hearing the parties the Adjudicating Authority vide order dated 31.05.2021 dismissed the said Application. Hence this Appeal. Company Appeal (AT) (Insolvency) No. 439 of 2021 7
3. The Ld. Counsel for the Appellant during the course of arguments and in his memo of Appeal submitted that the Adjudicating Authority while passing the Impugned Order failed to consider that the time taken in legal proceedings pending before the Adjudicating Authority including any application qua dispute between financial creditors over security interest, ought to have been excluded for the purposes of calculation of the CIRP period.
4. It is further submitted that the Adjudicating Authority failed to consider that the issue of security interest and its distribution as per Section 30(4) of the Code being in dispute and pending before the Adjudicating Authority in I.A. No. 3975 of 2020 and therefore, the period of pendency of such pendency of litigation ought to have been excluded from the CIRP period.
5. It the further submitted that Adjudicating Authority while passing the impugned order failed to consider that the adjudication of the Application bearing I.A. No. 3975 of 2020 and I.A. No. 140 of 2021 shall have a material bearing on the security interest of the secured financial creditor and consequently have a bearing on the distribution of amount received under the Resolution Plan to be made in terms of the provisions of Section 30(2)(b) of the Code.
6. It is further submitted that the Adjudicating Authority have failed to consider the true impact of the Judgment passed by Hon'ble supreme Court in the matter of "Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta and Ors. Reported in (2020) 8 SCC 531". Based on these submissions, the impugned order is fit to be set aside and grant Company Appeal (AT) (Insolvency) No. 439 of 2021 8 extension of CIRP period by 60 days from the date of order passed by this Appellate Tribunal.
7. The Ld. Counsel for the Respondent during course of arguments and in his Reply Affidavit submitted that the 10th meeting of CoC was convened from 15.02.2021 to 17.02.2021 wherein, the CoC was informed regarding the observations sent to the Prospective Resolution Applicant on 08.02.2021 and requested them to submit a modified Resolution Plan before the Resolution Professional. It was also informed that the Prospective Resolution Applicant vide email dated 10.02.2021 requested the Resolution Professional to grant an extension of 3 days i.e. till 13.02.2021. Further, the Prospective Resolution Applicant submitted the modified Resolution Plan with the Applicant on 13.02.2021.
8. It is further submitted that the Resolution Professional presented the modified Resolution Plan before the members of CoC and apprised the members of CoC that the Resolution Plan has some typographical errors which has to be rectified by the Prospective Resolution Applicant. It was also decided that since there are time constraints in view of CIRP period coming to an end on 19.02.2021, the issue needs to be decided at the earliest. As few more objections were raised by the members of CoC with respect to the Resolution Plan and as the issue with respect to the claim of Indian Overseas Bank being secured and unsecured is pending adjudication before the Adjudicating Authority and therefore, the outcome would affect the Resolution Plan. In view thereof, the members of CoC were of the view that an application seeking 60 Company Appeal (AT) (Insolvency) No. 439 of 2021 9 days extension in order to consider the Resolution Plan as resolved in 9th meeting of CoC convened on 06.02.2021 should be filed expeditiously. It is further submitted that the case of the Appellant is supported by the Respondent, therefore, period spent in the litigations may be excluded in the CIRP Period.
9. After hearing the parties and having gone through the record, we are of the considered view that the judgment passed by Hon'ble supreme Court in the matter of "Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta and Ors. Reported in (2020) 8 SCC 531" wherein paragraph 117 read as hereunder:
"117. So far as Section 4 is concerned, it is clear that the original timelines in which a CIRP must be completed have now been extended to 330 days, which is 60 days more than 180 plus 90 days (which is equal to 270 days). But this 330-day period includes the time taken in legal proceedings in relation to such resolution process of the corporate debtor. This provision is to get over what is stated in the judgment in Arcelor Mittal (India) at paragraph 86, that the time taken in legal proceedings in relation to the corporate resolution process must be excluded from the timeline mentioned in Section 12. Secondly, the third proviso added to the Section also mandates that where the period of 330 days is over on the date of commencement of the Amending Act of 2019, a further grace period of 90 days from such date is given, within which such process shall either be completed or the corporate debtor be sent into liquidation."
Company Appeal (AT) (Insolvency) No. 439 of 2021 10 In view of the discussion above, we set aside the Impugned order dated 31.05.2021 passed by the Adjudicating Authority in I.A. No. 1005 of 2021 in CP (IB) No. 266 (ND) of 2019 and pass the following orders:
i) The period of 60 days from today be excluded in the CIRP period and the CoC is directed to consider the Resolution Plan.
ii) Further, period spent from 19.02.2021 (date of filing of Application bearing I.A. No. 1005 of 2021) to 31.05.2021 (Impugned Order) is also excluded.
iii) Further, period spent from 14.06.2021 [date of filing of instant Appeal i.e. Company Appeal (AT) (Ins.) No. 439 of 2021] till the date of Judgment i.e. 06th September, 2022 is also excluded.
With these observations, the instant Appeal is allowed, I.As. if any, are also disposed of.
10. Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench-II), forthwith.
[Justice Anant Bijay Singh] Member (Judicial) [Ms. Shreesha Merla] Member (Technical) New Delhi 06th September, 2022 R. Nath.
Company Appeal (AT) (Insolvency) No. 439 of 2021