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(vi) The DRT vide its judgment and order dated 03.01.2005, granted a Decree of Rs.5,42,94,868/- along with 12% interest against the Principal Borrower. The Judgment and Decree directed that land of Principal Borrower mortgaged with IDBI to be sold by SASF to recover the loan as the first charge from the sale proceeds. The Principal Borrower and SASF after Company Appeal (AT) (Insolvency) Nos. 947, 1001 of 2021, issuance of Recovery Certificate dated 05.01.2005 for an amount of Rs.542.95 lakhs entered into a Negotiated Settlement for Rs.215.89 lakhs comprising cash payment of Rs.153.89 lakhs and convertible debentures of Rs.62 lakhs. The Corporate Debtor was not party to the Negotiated Settlement. On request of the SASF, the mortgaged assets of the Principal Borrower were attached and sale of some of the immovable assets of the Principal Borrower was also permitted. From the sale proceeds of the Principal Borrower, an amount of Rs.92.24 lakhs was paid to the SASF. On 09.11.2011, an order was passed by DRT on an Application filed by the SASF for restraining the Principal Borrower to sale the assets for paying the balance settlement amount. On 24.09.2012, the SASF revoked the Negotiated Settlement.

(vii) The SASF did not appear before the DRT in execution proceedings of Recovery Certificate. The DRT passed an order on 16.11.2018 directing Execution Proceeding to be adjourned sine-die due to repeated non-appearance of SASF.

(viii) It is relevant to notice here that although the Corporate Debtor was registered as sick industries under the Sick Industrial Companies (Special Provisions) Act, 1985 under reference No.259 of 2003, the IDBI/ SASF filed OA No.36 of 2003 against the Corporate Debtor for recovery of certain dues pertaining to Company Appeal (AT) (Insolvency) Nos. 947, 1001 of 2021, certain Financial Facilities extended by IDBI to the Corporate Debtor. The IDBI also obtained a Decree on 05.08.2004. After the CD was registered in BIFR, the IDBI/ SASF entered into Negotiated Settlement with CD and entire payment under Negotiated Settlement were paid by the Corporate Debtor and No Due Certificate was issued on 15.07.2016 by SASF.

(ix) The SASF did not pursue proceedings before DRT and after 18 years of invoking of the corporate guarantee, SASF filed Section 7 Application against the Corporate Debtor on 12.03.2019 being CP (IB) No.09/2019 claiming a grossly inflated claim of Rs.133.55 Crores against the loan of Rs.3.0771 crores disbursed to the Principal Borrower. On 26.08.2019, the Adjudicating Authority admitted Section 7 Application filed by SASF. Piyush Periwal, the Promoter of the Corporate Debtor filed an Appeal being Company Appeal (AT) (Insolvency) No.932 of 2019 challenging the order of admission in CIRP of the Corporate Debtor. The SASF filed a claim of Rs.16.12 Crores in CIRP under Form-C on 07.09.2019. The IRP admitted the claim of SASF.

57. Shri Jishnu Saha, learned Senior Counsel appearing for Respondent No.1 refuting the submission of the learned Counsel for the Appellants, contends that entire sequence of event and process, which was undertaken by SASF with the aid and advice of RP clearly indicates that entire process was undertaken to benefit SASF. The RP has accepted inflated claim of SASF and inspite of direction by the Adjudicating Authority on 09.12.2020, did not correct the claim. Acceptance of inflated claim was with an object to give such a vote share to the Financial Creditor, under which SASF can control the entire CoC. The second EOI was rolled out by the Financial Creditor and the RP, to only benefit Respondent No.4. The fact that PLBB was not even incorporated on the date when it submitted its Resolution Plan, makes it clear that somehow RP and Financial Creditor wanted PLBB to take over the Corporate Debtor. The PLBB's Resolution Plan has not disclosed any source of fund and despite the lacking of the aforesaid eligibility requirement, the Plan was placed before the CoC. Infact, Member of Respondent No.1 himself has raised a query during the proceeding of the CoC that PLBB has not disclosed the source of fund. The Minutes of 15 Company Appeal (AT) (Insolvency) Nos. 947, 1001 of 2021, CoC Meeting noticed that the representative of SASF has made an enquiry about the source of funding. The CoC Meeting, which was convened on 25.05.2021 to consider the Resolution Plan, was requested to be adjourned by several other Members of the CoC, since the said Meeting was convened in the second wave of Covid, which request was not accepted and in the Meeting held on 28.05.2021, the SASF was the sole Member of the CoC, who presented and approved the Plan. The RP has shown complete bias in favour of SASF and PLBB as he accepted the inflated and incorrect claim of SASF. The RP inspite of direction of Adjudicating Authority did not amend its error, which indicates that the mind set of RP, was to allow the Financial Creditor to dominate the CoC. It is submitted that PLBB, which was an entity, not even incorporated when the Plan was submitted and it having not disclosed any source of found and it had no experience in the field in which Corporate Debtor was working, accepting the Resolution Plan of PLBB clearly indicates the bias of the Financial Creditor and the RP. The RP has given his consent to be the IRP in another matter for M/s Damayanti Tea Industries, a related party, which was being run by the Promoters of PLBB, clearly shows the collusion between RP and PLBB. The MSME unit of the Promoter/ Director, which was running for last 58 years and after coming out from the BIFR was earning profit in 2016-17, 2017-18 and 2018-19 was suddenly put to closure. After the first approval of Plan of Respondent No.4, the Promoters of Respondent No.4 visited the factory premises of the Corporate Debtor and had communicated that they want number of staff to be reduced. The said visit of Promoter was in December Company Appeal (AT) (Insolvency) Nos. 947, 1001 of 2021, 2020 and immediately the RP issued a lay off notice in January 2021. Infact, RP was acting to benefit Respondent No.4 and there was clear nexus between SASF and RP. The entire CIRP was conducted by RP in the manner, which shows lack of transparency and collusion and Adjudicating Authority has rightly taken a decision to scrap the CIRP from Second EOI and replace the RP. Replacement of RP cannot be faulted, since the Adjudicating Authority was satisfied about the allegations made by the Promoter/ Director and in view of the findings returned by the Adjudicating Authority in paragraph 20, it is clear that there was lack of transparency in the process. It is submitted that the challenge in the IA No.43 of 2021 was not challenge to the commercial wisdom of the CoC in approving the Resolution Plan of PLBB, rather challenge was to the entire process of CIRP conducted by RP. The Promoter/ Director of the Corporate Debtor was not given an opportunity, since the only intent of SASF and RP was to give maximum benefit to SASF in the proceeding.