National Company Law Appellate Tribunal
T. Johnson vs R. Venkatakrishnan Liquidator St John ... on 17 March, 2023
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
IA No. 125 of 2023
in
Company Appeal (AT) (CH) (INS) No. 34 of 2023
(Arising out of an `Order' dated 19.01.2023 in IA(IBC)/1018(CHE)/2022 in
CP/759(IB)/CB/2018, passed by the `Adjudicating Authority' (`National
Company Law Tribunal', Division Bench - II, Chennai)
In the matter of:
T. Johnson
Shareholder - Promoter / Suspended Director
of the Corporate Debtor,
St. John Freight Systems Limited
(Company under Liquidation)
Address : 106J / 66, Millerpuram II Street,
Tuticorin - 628 002 ..... Petitioner / Appellant
v.
1) R. Venkatakrishnan,
Liquidator, St. John Freight Systems Limited
``Rajaparis Trimeni Towers'
1st Floor, 147, G.N. Chetty Road,
T. Nagar, Chennai - 600 017 ..... 1st Respondent / Liquidator
(Caveator)
2) G C Logistics India Pvt. Ltd.
(Purchaser)
22, Bharathi Park, 7th Cross
Saibaba Colony,
Coimbatore - 641 011 ..... 2nd Respondent / Successful
Resolution Applicant
Present:
For Petitioner / : Mr. Y. Suryanarayana, Advocate
Appellant For Mr. Pawan Jhabakh, Advocate
IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023
Page 1 of 23
For Respondent No.1 / : Mr. T.K. Bhaskar, Advocate
Liquidator (Caveator) For Mr. Mayan H. Jain
Mr. G. Pranav and Ms. Niveditha Narayanan,
Advocates,
Mr. R. Venkatakrishnan, Liquidator
For Respondent No.2 / : Mr. M.S. Krishnan, Senior Advocate
Successful Resolution For Mr. Anirudh Krishnan and
Applicant Ms. Rupikaa Srinivasan, Advocates
ORDER
(Virtual Mode) Justice M. Venugopal, Member (Judicial):
IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023:
Prologue:
The Petitioner / Appellant, has filed the instant IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023, seeking `Leave', to prefer an `Appeal', against the `Impugned Order', dated 19.01.2023 in IA(IBC)/1018(CHE)/2022 in CP/759/IB/CB/2018, passed by the `Adjudicating Authority' (`National Company Law Tribunal', Division Bench - II, Chennai).
Petitioner / Appellant's Stance:
2. According to the Petitioner / Appellant, he is not a `Party' to the Proceedings in which, the `Impugned Order', came to be passed, but, being the `Shareholder' of the `Corporate Debtor' / `St. John Freight IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 2 of 23 Systems Limited' [Company under Liquidation], holding 3,01,428 equity shares of Rs.100/- each constituting 55.19% of the equity shareholding, is aggrieved of the `Impugned Order', as it affects directly and prejudices the Petitioner / Appellant's interest.
3. The Learned Counsel for the Petitioner / Appellant, emphatically contends that in deciding, whether a `Leave', must be granted, an `Application' / `Appeal', ought to be taken on `Demurrer', and the merits of the matter, cannot be gone into, for the sake of determining an `Application', praying for `Leave'.
4. Also, it is the submission of the Petitioner / Appellant's side that the `Petitioner / Appellant / Suspended Director', and a `Shareholder', his `Proposed Scheme', was not considered by the `1st Respondent / Liquidator', and `Shares', were extinguished, `in lieu' of the `Impugned Order', and hence, falls within the definition of being an `Aggrieved Party', in terms of the `Impugned Order'.
5. The Learned Counsel for the Petitioner / Appellant points out that for a `Person', being `Aggrieved', there is no need to prove any `Sufficient Cause', to file an `Appeal' and in fact, `no prejudice', will be caused to anyone, in `allowing' the IA No. 125 of 2023, by this `Tribunal'.
IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 3 of 23 Petitioner / Appellant's Citations:
6. The Learned Counsel for the Petitioner / Appellant, to fortify his contention that even a `Person', who is not a `Party', to the `Original Proceedings', can prefer an `Appeal', irrespective of whether, such `Party', was a `Party' to the `Proceedings', before the lower Court, adverts to the decision of the Hon'ble Supreme Court in Basanti Devi v.
Raviprakash Ramprasad Jaiswal, reported in AIR 2008 SC 295, it is observed as under:
23. ``It is now well settled that an application for grant of probate is a proceeding in rem. A probate when granted not only binds all the parties before the Court but also binds all other persons in all proceedings arising out of the Will or claims under or connected therewith. Being a judgment in rem, a person, who is aggrieved thereby and having had no knowledge about the proceedings and proper citations having not been made, is entitled to file an application for revocation of probate on such grounds as may be available to him. We are, therefore, of the opinion that the application for revocation of the grant of probate should have been entertained.''
7. The Learned Counsel for the Petitioner / Appellant, relies on the decision of the Hon'ble Supreme Court in Samir Agrawal v. Competition Commission of India (vide Civil Appeal No. 3100 of 2020 dated 15.12.2020), reported in MANU/SC/0940/2020, to a `Plea' that in the context of a `Person Aggrieved', in the context of in rem proceedings, IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 4 of 23 which may be `Appealable', before the `National Company Law Appellate Tribunal', that there is no necessity for a `Person', to be `impleaded'. The relevant paragraphs beginning from 16 to 23 in the aforesaid Judgement of the Hon'ble Supreme Court of India, reads as under:
16. ``Section 45 of the Act is a deterrent against persons who provide information to the CCI, mala fide or recklessly, in as much as false statements and omissions of material facts are punishable with a penalty which may extend to the hefty amount of rupees one crore, with the CCI being empowered to pass other such orders as it deems fit. This, and the judicious use of heavy costs being imposed when the information supplied is either frivolous or mala fide, can keep in check what is described as the growing tendency of persons being "set up" by rivals in the trade.
17. The 2009 Regulations also point in the same direction in as much as regulation 10, which has been set out hereinabove, does not require the informant to state how he is personally aggrieved by the contravention of the Act, but only requires a statement of facts and details of the alleged contravention to be set out in the information filed. Also, regulation 25 shows that public interest must be foremost in the consideration of the CCI when an application is made to it in writing that a person or enterprise has substantial interest in the outcome of the proceedings, and such person may therefore be allowed to take part in the proceedings.
What is also extremely important is regulation 35, by which the CCI must maintain confidentiality of the identity of an informant on a request made to it in writing, so that such informant be free from harassment by persons involved in contravening the Act. IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 5 of 23
18. This being the case, it is difficult to agree with the impugned judgment of the NCLAT in its narrow construction of section 19 of the Act, which therefore stands set aside.
19. With the question of the Informant's locus standi out of the way, one more important aspect needs to be decided, and that is the submission of Shri Rao, that in any case, a person like the Informant cannot be said to be a "person aggrieved" for the purpose of sections 53B and 53T of the Act. Shri Rao relies heavily upon Adi Pherozshah Gandhi (supra), in which section 37 of the Advocates Act, 1961 came up for consideration, which spoke of the right of appeal of "any person aggrieved" by an order of the disciplinary committee of a State Bar Council. It was held that since the Advocate General could not be said to be a person aggrieved by an order made by the disciplinary committee of the State Bar Council against a particular advocate, he would have no locus standi to appeal to the Bar Council of India. In so saying, the Court held:
"11. From these cases it is apparent that any person who feels disappointed with the result of the case is not a "person aggrieved". He must be disappointed of a benefit which he would have received if the order had gone the other way. The order must cause him a legal grievance by wrongfully depriving him of something. It is no doubt a legal grievance and not a grievance about material matters but his legal grievance must be a tendency to injure him. That the order is wrong or that it acquits some one who he thinks ought to be convicted does not by itself give rise to a legal grievance.''
20. It must immediately be pointed out that this provision of the Advocates Act, 1961 is in the context of a particular advocate being penalized for professional or other misconduct, which concerned itself with an action in personam, unlike the present case, which is concerned with an action in rem. In this context, it is useful to refer to the judgment in A. Subash Babu v. State of A.P., (2011) 7 SCC 616, in which the expression "person aggrieved" in section IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 6 of 23 198(1)(c) of the Code of Criminal Procedure, 1973, when it came to an offence punishable under section 494 of the Indian Penal Code, 1860 (being the offence of bigamy), was under
consideration. It was held that a "person aggrieved" need not only be the first wife, but can also include a second "wife" who may complain of the same. In so saying, the Court held: (SCC pp. 628- 29 Para 25) "25. Even otherwise, as explained earlier, the second wife suffers several legal wrongs and/or legal injuries when the second marriage is treated as a nullity by the husband arbitrarily, without recourse to the court or where a declaration sought is granted by a competent court. The expression "aggrieved person" denotes an elastic and an elusive concept. It cannot be confined within the bounds of a rigid, exact and comprehensive definition. Its scope and meaning depends on diverse, variable factors such as the content and intent of the statute of which the contravention is alleged, the specific circumstances of the case, the nature and extent of complainant's interest and the nature and the extent of the prejudice or injury suffered by the complainant. Section 494 does not restrict the right of filing complaint to the first wife and there is no reason to read the said section in a restricted manner as is suggested by the learned counsel for the appellant. Section 494 does not say that the complaint for commission of offence under the said section can be filed only by the wife living and not by the woman with whom the subsequent marriage takes place during the lifetime of the wife living and which marriage is void by reason of its taking place during the life of such wife. The complaint can also be filed by the person with whom the second marriage takes place which is void by reason of its taking place during the life of the first wife." (page 628)
21. Clearly, therefore, given the context of the Act in which the CCI and the NCLAT deal with practices which have an adverse effect on competition in derogation of the interest of consumers, it is clear that the Act vests powers in the CCI and enables it to act in rem, in IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 7 of 23 public interest. This would make it clear that a "person aggrieved"
must, in the context of the Act, be understood widely and not be constructed narrowly, as was done in Adi Pherozshah Gandhi (supra). Further, it is not without significance that the expressions used in sections 53B and 53T of the Act are "any person", thereby signifying that all persons who bring to the CCI information of practices that are contrary to the provisions of the Act, could be said to be aggrieved by an adverse order of the CCI in case it refuses to act upon the information supplied. By way of contrast, section 53N(3) speaks of making payment to an applicant as compensation for the loss or damage caused to the applicant as a result of any contravention of the provisions of Chapter II of the Act, having been committed by an enterprise. By this sub-section, clearly, therefore, "any person" who makes an application for compensation, under sub-section (1) of section 53N of the Act, would refer only to persons who have suffered loss or damage, thereby, qualifying the expression "any person" as being a person who has suffered loss or damage. Thus, the preliminary objections against the Informant/Appellant filing Information before the CCI and filing an appeal before the NCLAT are rejected.
22. An instructive judgment of this Court reported as Competition Commission of India v. Steel Authority of India, MANU/SC/0690/2010 : (2010) 10 SCC 744 dealt with the provisions of the Act in some detail and held: (SCC pp. 768, 788-89 & 794, paras 37-38, 101-06 & 125-26).
"37. As already noticed, in exercise of its powers, the Commission is expected to form its opinion as to the existence of a prima facie case for contravention of certain provisions of the Act and then pass a direction to the Director General to cause an investigation into the matter. These proceedings are initiated by the intimation or reference received by the Commission in any of the manners specified under Section 19 of the Act. At the very threshold, the Commission is to exercise its powers in passing the direction for investigation; or where it finds that there exists no prima facie case IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 8 of 23 justifying passing of such a direction to the Director General, it can close the matter and/or pass such orders as it may deem fit and proper. In other words, the order passed by the Commission under Section 26(2) is a final order as it puts an end to the proceedings initiated upon receiving the information in one of the specified modes. This order has been specifically made appealable under Section 53-A of the Act.
38. In contradistinction, the direction under Section 26(1) after formation of a prima facie opinion is a direction simpliciter to cause an investigation into the matter. Issuance of such a direction, at the face of it, is an administrative direction to one of its own wings departmentally and is without entering upon any adjudicatory process. It does not effectively determine any right or obligation of the parties to the lis. Closure of the case causes determination of rights and affects a party i.e. the informant; resultantly, the said party has a right to appeal against such closure of case under Section 26(2) of the Act. On the other hand, mere direction for investigation to one of the wings of the Commission is akin to a departmental proceeding which does not entail civil consequences for any person, particularly, in light of the strict confidentiality that is expected to be maintained by the Commission in terms of Section 57 of the Act and Regulation 35 of the Regulations."
101. The right to prefer an appeal is available to the Central Government, the State Government or a local authority or enterprise or any person aggrieved by any direction, decision or order referred to in clause (a) of Section 53-A [ought to be printed as 53-A(1)(a)]. The appeal is to be filed within the period specified and Section 53-B(3) further requires that the Tribunal, after giving the parties to appeal an opportunity of being heard, to pass such orders, as it thinks fit, and send a copy of such order to the Commission and the parties to the appeal.
102. Section 53-S contemplates that before the Tribunal a person may either appear "in person" or authorise one or more chartered IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 9 of 23 accountants or company secretaries, cost accountants or legal practitioners or any of its officers to present its case before the Tribunal. However, the Commission's right to legal representation in any appeal before the Tribunal has been specifically mentioned under Section 53-S(3). It provides that the Commission may authorise one or more of chartered accountants or company secretaries or cost accountants or legal practitioners or any of its officers to act as presenting officers before the Tribunal. Section 53-T grants a right in specific terms to the Commission to prefer an appeal before the Supreme Court within 60 days from the date of communication of the decision or order of the Tribunal to them.
103. The expression "any person" appearing in Section 53- B has to be construed liberally as the provision first mentions specific government bodies then local authorities and enterprises, which term, in any case, is of generic nature and then lastly mentions "any person". Obviously, it is intended that expanded meaning be given to the term "persons" i.e. persons or bodies who are entitled to appeal. The right of hearing is also available to the parties to appeal.
104. The above stated provisions clearly indicate that the Commission, a body corporate, is expected to be party in the proceedings before the Tribunal as it has a legal right of representation. Absence of the Commission before the Tribunal will deprive it of presenting its views in the proceedings. Thus, it may not be able to effectively exercise its right to appeal in terms of Section 53 of the Act.
105. Furthermore, Regulations 14(4) and 51 support the view that the Commission can be a necessary or a proper party in the proceedings before the Tribunal. The Commission, in terms of Section 19 read with Section 26 of the Act, is entitled to commence proceedings suo motu and adopt its own procedure for completion of such proceedings. Thus, the principle of fairness would demand that such party should be heard by the Tribunal before any orders adverse to it are passed in such cases. The Tribunal has taken this IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 10 of 23 view and we have no hesitation in accepting that in cases where proceedings initiated suo motu by the Commission, the Commission is a necessary party.
106. However, we are also of the view that in other cases the Commission would be a proper party. It would not only help in expeditious disposal, but the Commission, as an expert body, in any case, is entitled to participate in its proceedings in terms of Regulation 51. Thus, the assistance rendered by the Commission to the Tribunal could be useful in complete and effective adjudication of the issue before it." (page 788) "125. We have already noticed that the principal objects of the Act, in terms of its Preamble and the Statement of Objects and Reasons, are to eliminate practices having adverse effect on the competition, to promote and sustain competition in the market, to protect the interest of the consumers and ensure freedom of trade carried on by the participants in the market, in view of the economic developments in the country. In other words, the Act requires not only protection of free trade but also protection of consumer interest. The delay in disposal of cases, as well as undue continuation of interim restraint orders, can adversely and prejudicially affect the free economy of the country. Efforts to liberalise the Indian economy to bring it on a par with the best of the economies in this era of globalisation would be jeopardised if time-bound schedule and, in any case, expeditious disposal by the Commission is not adhered to. The scheme of various provisions of the Act which we have already referred to including Sections 26, 29, 30, 31, 53-B(5) and 53-T and Regulations 12, 15, 16, 22, 32, 48 and 31 clearly show the legislative intent to ensure timebound disposal of such matters.
126. The Commission performs various functions including regulatory, inquisitorial and adjudicatory. The powers conferred by the legislature upon the Commission under Sections 27(d) and 31(3) are of wide magnitude and of serious ramifications. The Commission has the jurisdiction even to direct that an agreement IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 11 of 23 entered into between the parties shall stand modified to the extent and in the manner, as may be specified. Similarly, where it is of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition but such adverse effect can be eliminated by suitable modification to such combination, the Commission is empowered to direct such modification." (page 794)
23. Obviously, when the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI and the appellate authority, i.e., the NCLAT, must be kept wide open in public interest, so as to subserve the high public purpose of the Act.'' Pleas of 1st Respondent / Liquidator:
8. The Learned Counsel for the 1st Respondent / Liquidator contends that IA(IBC)/1018(CHE)/2022 in CP/759/IB/CB/2018, was filed by the `1st Respondent' (under Section 60(5) of the I & B Code, 2016, read with Regulations 32A(e), seeking for the `Sale of Corporate Debtor', as a `Going Concern', by way of a `Private Sale', with other `Reliefs'.
9. In fact, the Petitioner / Appellant, had not taken any steps to `implead' himself or to submit any `objections' to IA(IBC)/1018(CHE)/2022 and hence, he cannot maintain the instant IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 (coupled with the instant `Appeal'), because of the fact that he was not a `Party' to the `Original Proceedings', before the `Adjudicating Authority' IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 12 of 23 (`Tribunal'). Also that, the `Proforma Sole Respondent' in IA(IBC)/1018(CHE)/2022, was only the `Buyer', Viz. `M/s. G C Logistics India Private Limited' / `2nd Respondent'.
10. Advancing his argument, the Learned Counsel for the 1st Respondent / Liquidator, contends that, it is not the case of the `Petitioner / Appellant' that he was unaware of the `Ongoing Proceedings', before the `Adjudicating Authority'. If really the `Petitioner / Appellant', was so `Affected', by the `Impugned Order', he could have filed necessary `Application', before the `Adjudicating Authority', claiming certain `Reliefs'. As an afterthought, the `Petitioner / Appellant', has filed IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 (seeking `Relief', to prefer an `Appeal'), and further, being a `Shareholder' / `Erstwhile Promoter' / `Managing Director' of the `Corporate Debtor', the `Petitioner' / `Appellant', has `no Locus Standi', to prefer the instant `Interlocutory Application', together with the instant `Appeal'.
11. Apart from the above, according to the 1st Respondent / Liquidator, the `Petitioner' / a `Shareholder' of the `Corporate Debtor', was not part of the `Stakeholders Consultation Committee', and hence, the `1st Respondent', was not under `any obligation', to consult the `Petitioner', for any reasons, whatsoever.
IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 13 of 23
12. It is represented on behalf of the 1st Respondent that the `Petitioner / Erstwhile Director' of the `Corporate Debtor', had furnished a `Proposal' of Rs.170 Crores, through his email dated 06.10.2021, wherein, a `Proposal' for `Settlement', as per Section 230 of the Companies Act, 2013, was made. Indeed, the Petitioner, through emails dated 07.10.2021, 15.10.2021, 25.10.2021, 30.10.2021, 03.11.2021, 09.11.2021 and 13.11.2021, had sought for some clarifications, pertaining to the `eligibility' of the `Petitioner', as per Section 29A of the I & B Code, 2016, and various other information from the `Petitioner', which was considered by the `Stakeholders Consultation Committee Members', in the `9th Meeting', dated 30.10.2021 and `no response', was received from the `Applicant', and that the `Respondent', for considering the `Proposal', under Section 230 of the Companies Act, 2013, conducted a `Secured Creditors' Meeting on 08.11.2021 and the `Members', in the `Meeting', had stated that the `Proposal Terms of the Petitioner', were `unacceptable', and the same was communicated, for which, the `Petitioner', had not reverted back, in effect. The `Petitioner / Appellant', has no `Locus', to file the instant IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023, along with the main `Appeal'. IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 14 of 23
13. Expatiating his submission, the Learned Counsel for the 1 st Respondent points out that the `Petitioner / Appellant / Promoter' of the `Corporate Debtor', is unable to prove that he is `eligible', to re-take control of the `Corporate Debtor', not being disqualified as per Section 29A of the I & B Code, 2016. Besides this, the instant `Appeal', was filed on the basis of the `Petitioner's purported Scheme', for `Revival' of the `Corporate Debtor', which was found to be lacking, in terms of material particulars, including on the issue of `Source of Funds'.
14. The Learned Counsel for the 1st Respondent, brings it to the notice of this `Tribunal', that the `Petitioner / Appellant', had filed Comp. App (AT) (INS.) No. 1042 of 2019, before the `Appellate Authority', and Civil Appeal No. 2113 of 2020, before the Hon'ble Supreme Court, assailing the `Order' dated 26.11.2019, passed by the `Adjudicating Authority' (`Tribunal'), for `initiation' of `Liquidation', as against the `Corporate Debtor', and they were `dismissed'.
15. The Learned Counsel for the 1st Respondent points out that the Petitioner / Appellant, had set up persons like Mr. Karthikeyan, Mr. GVRS. Manian, Mr. Jackson and other Customers, who filed Applications, before the `Adjudicating Authority', to act on his behalf, knowing that the `Petitioner / Appellant', has `no Locus', to prefer an IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 15 of 23 `Application', before the `Adjudicating Authority' (`Tribunal'), as an endeavour made by the `Petitioner / Appellant', before the `Appellate Authority', and the `Hon'ble Supreme Court', which proved `futile'.
16. In this connection, on behalf of the 1st Respondent, it is pointed out that, based on the `Order' dated 19.01.2023, the `Sale Agreement' dated 27.01.2023, was already executed, between the `Corporate Debtor' and the `2nd Respondent', by means of which, the whole management, was handed over to the 2nd Respondent / Company, and as per Section 53 of the I & B Code, 2016, the `Sale Proceeds', received from the `2nd Respondent', was distributed and hence, `nothing survives', in the present `Interlocutory Application' vis-à-vis the `Appeal', and in fact, the whole management, rests with the `2nd Respondent', and the `Stakeholders', had received the whole consideration for the same.
Contentions of 2nd Respondent / Successful Resolution Applicant:
17. According to the Learned Senior Counsel for the 2nd Respondent, the concept of `Swiss Challenge Order', was recognised by the `Hon'ble Supreme Court of India' in th7e matter of Ravi Development v. Shree Krishna Prathisthan and Ors. (vide Judgment in Civil Appeal No. 3459 of 2009 with Nos. 3460, etc. dated 11.05.2009), reported in (2009) 7 SCC at Page 462.
IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 16 of 23
18. Further, as against the `Swiss Challenge Order' of the `Adjudicating Authority' (`Tribunal'), passed on 11.03.2022, the `Petitioner / Appellant', had not filed any `Appeal', and also had not `Impleaded', itself, during the `Proceedings', before the `Adjudicating Authority', and hence, the said `Order', has become `Final'.
19. It is the version of the 2nd Respondent, that the `Petitioner / Appellant', is advancing his `Agenda', through an `Operational Creditor', by name `MSK Lorry Booking Office', who had preferred a Comp. App (AT) (CH) (INS.) No. 35 of 2023, before this `Tribunal', and together, they have been filing `Frivolous Applications', to `impede', the `Process'.
20. Added further, in the `9th Stakeholders Consultation Committee Meeting dated 30.10.2021', the said `Operational Creditor', through which the `Petitioner / Appellant' has been acting, mentioned that they want the `Appellant', to take over the `Corporate Debtor', which was recorded in the `Minutes' of the `9th SCC Meeting', and as such, the Appellant's intention, is to cause `disruptions', to the `sanctity' of the due process of `Liquidation'.
21. The Learned Counsel for the 2nd Respondent points out that the 2nd Respondent, had executed the said `Going Concern Purchase Agreement', IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 17 of 23 for the takeover dated 27.01.2023, and took over the `Corporate Debtor' officially, on 30.01.2023, etc.
22. The prime stance of the 2nd Respondent is that, the `Appellant', is not a `Stakeholder', in the `Liquidation Process' of the `Corporate Debtor', and has `no vested interest' in the `Corporate Debtor'. Also that, the `Payment Consideration' of Rs.44,64,00,000/-, was satisfied and in fact, the `Consideration', which was `remitted', was dispersed, in accordance with Section 53 of the I & B Code, 2016, and hence, IA No. 125 of 2023, is to be `dismissed', in furtherance of `substantial cause of justice'.
Appeal & Appellate Authority:
23. An `Appellant' in an `Appeal', before the `National Company Law Appellate Tribunal', under Section 61 of the I & B Code, 2016, cannot `rely' upon Section 421 of the Companies Act, 2013, as opined by this `Tribunal'. No wonder, an `Appeal', from an `Order', `Approving' such `Resolution Plan', is only limited to the grounds, laid down in Section 61 (3) of the I & B Code, 2016.
IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 18 of 23 Appraisal:
24. It is pertinently pointed out that the 1st Respondent / Petitioner, had filed an IA(IBC)/1018(CHE)/2022 in CP/759/IB/CB/2018, before the `Adjudicating Authority' (`Tribunal'), as per Section 60(5) of the I & B Code, 2016, read with Regulations 32A (e), seeking `Sale' of the `Corporate Debtor', as a `Going Concern', through a `Private Sale', along with other `Reliefs'. Indeed, the `2nd Respondent' (`G C Logistics India Private Ltd.' / `Buyer'), is `arrayed' as a `Party', in the said `Application'.
25. The Petitioner / Appellant, had not filed his `objections' and also not taken steps to be `impleaded', as one of the `Parties' in IA(IBC)/1018(CHE)/2022 in CP/759/IB/CB/2018, on the file of the `Adjudicating Authority' (`Tribunal').
26. It transpires that the `Petitioner / Shareholder' of the `Corporate Debtor', was not part of the `Stakeholders Consultation Committee', and in fact, there is `no obligation', on the part of the `1st Respondent / Liquidator', to consult the `Petitioner / Appellant', for any reason.
27. It cannot be ignored, that the Petitioner / Appellant, had not filed any `Claim Form', in Form - G, during `Liquidation Period'. In terms of IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 19 of 23 Regulation 20 of the IBBI (Liquidation Process) Regulations, 2016, the `Petitioner, has no connection to the `Liquidation Process', and later to the `Sale' of the `Corporate Debtor'.
28. Moreover, an email was issued by the 1st Respondent / Liquidator', wherein, it was mentioned that `No Claims', were submitted by the `Shareholders', and only the `Stakeholders', who had submitted the `Claim', shall be a representative in the `Stakeholders Committee', for advising on the aspect of `Liquidation'.
29. In the instant case, the `Petitioner / Appellant', was not in a position to prove that he is an `Individual', eligible to regain `control' of the `Corporate Debtor', there being `no disqualification', as per Section 29A of the I & B Code, 2016.
30. As a matter of fact, a `Scheme', was put before the `Stakeholders Consultation Committee Members', in their `9th Meeting', dated 30.10.2021 and a `Secured Creditors' meeting, was conducted by the `1 st Respondent / Liquidator', to consider the `Proposal', as per Section 230 of the Companies Act, 2013. In fact, the `Petitioner / Appellant', was IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 20 of 23 informed that the `Proposal Terms', were `not acceptable', by the `Stakeholders Consultation Committee' and the `Secured Creditors'.
31. There is no second opinion of an important fact that the `Petitioner / Appellant', had filed Comp. App (AT) (INS.) No. 1042 of 2019, before the `Appellate Authority', and preferred a Civil Appeal No. 2113 of 2020, before the Hon'ble Supreme Court, questioning the `Order', passed by the `Adjudicating Authority', dated 26.11.2019, has no `Locus', to prefer any `Application', before the `Adjudicating Authority', and the fact of the matter is that, based on the `Order' dated 19.01.2023 in IA(IBC)/1018(CHE)/2022 in CP/759/IB/CB/2018, passed by the `Adjudicating Authority', a `Sale Agreement', dated 27.01.2023, was executed, between the `Corporate Debtor' and the `2nd Respondent', in and by which, the whole management, was handed over to the `2 nd Respondent', and one cannot brush aside a prime fact that the whole `Sale Proceeds', received from the `2nd Respondent' / `G C Logistics India Private Ltd.', was distributed to the `Stakeholders', in the teeth of the ingredients of Section 53 of the I & B Code, 2016.
32. Notwithstanding the above, this `Tribunal', keeping in mind of a candid fact that the `Petitioner / Appellant', is `not', a `Stakeholder' in the IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 21 of 23 `Liquidation Process' of the `Corporate Debtor', and has `no vested interest' in the `Corporate Debtor', taking note of the fact that the `Payment Consideration' of Rs.44,64,00,000/- and the same was distributed, as per Section 53 of the I & B Code, 2016, comes to a conclusion that the `Leave', prayed for, by the `Petitioner / Appellant', to prefer the present `Comp. App (AT) (CH) (INS.) No. 34 of 2023', is `not accorded to', by this `Tribunal', based on the facts and surrounding circumstances of the case, which float on the surface. Resultantly, the `IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023', sans merits and it fails.
Conclusion:
In fine, the IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 is `dismissed'. No costs.
Comp. App (AT) (CH) (INS.) No. 34 of 2023:
Because of the fact that this `Tribunal', has `Dismissed' the IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 (`Leave', to prefer an `Appeal'), filed by the `Petitioner / Appellant', the main Comp.
App (AT) (CH) (INS.) No. 34 of 2023, is not `entertained', and the same IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 22 of 23 is `Rejected'. The connected pending IA Nos. 126 and 127 of 2023, are `Closed'.
[Justice M. Venugopal] Member (Judicial) [Shreesha Merla] Member Technical) 17/03/2023 SR / TM IA No. 125 of 2023 in Comp. App (AT) (CH) (INS.) No. 34 of 2023 Page 23 of 23