National Company Law Appellate Tribunal
Parvinder Singh vs Intec Capital Ltd. & Anr on 6 December, 2019
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Company Appeal (AT) (Insolvency) No. 968 of 2019
IN THE MATTER OF:
Parvinder Singh ...Appellant
Vs
Intec Capital Ltd. & Anr. ...Respondents
Present:
For Appellant: Ms. Amrita Mishra, Advocate.
For Respondents: Mr. Vinod Chaurasia, Advocate for IRP.
Mr. Piyush Moona, IRP.
ORDER
06.12.2019: 'M/s Intec Capital Ltd.' (Financial Creditor) moved application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'I&B Code') for initiation of Corporate Insolvency Resolution Process against 'M/s Jagtar Singh and Sons Hydraulics Private Limited' (Corporate Debtor). The Adjudicating Authority (National Company Law Tribunal), New Delhi Bench - III by impugned order dated 3rd September, 2019 admitted the application.
2. Mr. Parvinder Singh, Authorised Representative of the Promoter of the Corporate Debtor preferred appeal against the said order. On 19th September, -2- 2019, while the Appellant was substituted, learned counsel for the Appellant submitted that the Appellant on behalf of the Promoters is ready to settle the claim of the Financial Creditor. If necessary, they are ready to move before a 'Mediator', who may be appointed by this Appellate Tribunal. It was also submitted that Committee of Creditors has not been constituted till date.
3. For the said reason, the Interim Resolution Professional was while directed to ensure that the Corporate Debtor remains a going concern, also directed not to constitute Committee of Creditors, if not constituted, to enable the parties to reach amicable settlement.
4. Mr. Ketan Madan, learned counsel appearing on behalf of the Respondent - 'Intec Capital Ltd.' agreed for mediation and the matter was referred to Hon'ble Mr. Justice (Retd.) A. K. Sikri, Former Judge of the Hon'ble Supreme Court for mediation.
5. Hon'ble Mr. Justice (Retd.) A. K. Sikri, Former Judge of the Hon'ble Supreme Court forwarded the Mediation Report dated 2nd December, 2019 enclosing the Settlement Terms, as extracted below:-
Company Appeal (AT) (Insolvency) No. 968 of 2019 -3- Company Appeal (AT) (Insolvency) No. 968 of 2019 -4- Company Appeal (AT) (Insolvency) No. 968 of 2019 -5- Company Appeal (AT) (Insolvency) No. 968 of 2019 -6- Company Appeal (AT) (Insolvency) No. 968 of 2019 -7- Company Appeal (AT) (Insolvency) No. 968 of 2019 -8- Company Appeal (AT) (Insolvency) No. 968 of 2019 -9- Company Appeal (AT) (Insolvency) No. 968 of 2019 -10- Company Appeal (AT) (Insolvency) No. 968 of 2019 -11- Company Appeal (AT) (Insolvency) No. 968 of 2019 -12- Company Appeal (AT) (Insolvency) No. 968 of 2019 -13-
6. The Hon'ble Mediator has also forwarded copy of post-dated cheques which were issued in the name of 'M/s Intec Capital Ltd.', which are as follows:-
Company Appeal (AT) (Insolvency) No. 968 of 2019 -14- Company Appeal (AT) (Insolvency) No. 968 of 2019 -15- Company Appeal (AT) (Insolvency) No. 968 of 2019 -16- Company Appeal (AT) (Insolvency) No. 968 of 2019 -17- Company Appeal (AT) (Insolvency) No. 968 of 2019 -18-
7. This Appellate Tribunal directed the Appellant to file affidavit on behalf of the Promoter of the Corporate Debtor giving undertaking that the post-dated cheques will be encashed on presentation and they will not be defaulted. An affidavit has been filed by the Appellant on behalf of the Promoter to that effect. It is stated that on default of any of the cheques, 'Parvinder Singh' (Appellant) and the Promoter will be personally liable.
8. The aforesaid post-dated cheques are being handed over to Mr. Ketan Madan, learned counsel for 'Intec Capital Ltd.' for onward transmission to the Respondent - Financial Creditor.
9. Interim Resolution Professional has worked for about three months. He was also present before the Hon'ble Mediator and his fee and cost has been determined in the Settlement Terms. Therefore, he will be entitled for the same. Mr. Piyush Moona, Interim Resolution Professional, who is present before this Appellate Tribunal will receive the amount in terms of the Settlement Terms.
10. In the fact and circumstances, in the light of decision of Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors.', Writ Petition (Civil) No. 99/2018, reported in 2019 SCC OnLine SC 73 and in exercise of power conferred under Rule 11 of NCLAT Rules, 2016, we set aside impugned order dated 3rd September, 2019 passed by the Adjudicating Authority initiating Corporate Insolvency Resolution Process against 'M/s Jagtar Singh and Sons Hydraulics Private Limited' conditionally, Company Appeal (AT) (Insolvency) No. 968 of 2019 -19- subject to the compliance of the Terms of Settlement by the end of August, 2020.
11. Terms of Settlement as recorded by the Hon'ble Mediator should be treated to be order and direction of this Appellate Tribunal to be complied by all the parties including the Promoters of 'M/s Jagtar Singh and Sons Hydraulics Private Limited' (Corporate Debtor); Parvinder Singh, Authorized Representative; Intec Capital Ltd. And Interim Resolution Professional. In the present, whole process practically stands suspended for compliance of the Terms of Settlement. The Corporate Insolvency Resolution Process can be revived by the Petitioner in case of breach of Terms of Settlement or default of any post-dated cheque. On completion of compliance of terms and conditions, the application under Section 7 will be deemed to have been withdrawn by 'Intec Capital Ltd.', otherwise the order setting aside the impugned order dated 3rd September, 2019 shall stand recalled and the Corporate Insolvency Resolution Process will continue. The Interim Resolution Professional may allow the Promoters/ Board of Directors to run the Corporate Debtor through Board of Directors. However, the Appellant, the Corporate Debtor, its Directors, Officers, Employees will not sell, alienate, transfer or create third party encumbrance on any of the movable or immovable property of the Corporate Debtor during the period Terms of Settlement are complied.
12. The Corporate Debtor may incur expenditure required for keeping the Company going concern, that is, for payment of salaries/wages of Directors; Company Appeal (AT) (Insolvency) No. 968 of 2019 -20- Officers; employees'; workmen; current bills of the suppliers, electricity/water bills etc. However, it will not transfer any amount in favour of any shareholder or related party till the compliance.
13. It will be open to the parties to file appropriate application in this appeal for revival of the matter, in case of default.
14. The appeal stands disposed of with aforesaid observations and directions. No costs.
15. Let the Mediation Report filed by the Hon'ble Mediator be kept in a sealed cover alongwith the record.
16. Let the disposed of appeal be listed for reporting of compliance on 7th September, 2020.
[Justice S. J. Mukhopadhaya] Chairperson [Justice Bansi Lal Bhat] Member (Judicial) [Justice Venugopal M.] Member (Judicial) am/gc Company Appeal (AT) (Insolvency) No. 968 of 2019