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2019 DIGILAW 1183 (GAU)

Himatsingka Resorts Pvt. Ltd. v. Union of India

2019-11-04

ACHINTYA MALLA BUJOR BARUA, NELSON SAILO

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JUDGMENT : A.M. Bujor Barua, J. Heard Mr. K. Goswami, learned counsel for the petitioner. Also heard Mr. S.C. Keyal, learned Assistant Solicitor General of India appearing for the respondents No.1 and 2. Lawazima Court order dated 08.08.2018 provides that notice upon the respondents No. 3 to 6 had been deemed to have been served. Inspite of the notice being served, none appears for the respondents No. 3 to 6. 2. Respondents No.3 and 4 made an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short IBC) before the National Company Law Tribunal, Guwahati Bench (in short NCLT) inter alia making a claim that being financial creditors, the respondent No.3 had advanced a loan amounting to Rs.7,49,420/- and the respondent No.4 had advanced a loan amounting to Rs.22,48,260/- to the petitioner, which is stated to be inclusive of interest. 3. Nclt Guwahati Bench accordingly registered CP (IBC)/03/GB/2017 and by its order dated 13.02.2017 had passed the following effective order:- "Since the defaults in payment of debts to the financial creditors had occurred on the dates mentioned in the application, since the application U/s. 7(2) of the IBC is complete in all respects and since there is no disciplinary proceeding pending against the proposed interim resolution professional (IPR), in my very considerate view, the application submitted by financial creditors is required to be admitted. In view of the above, this application is admitted declaring moratorium with substantial direction as below:- That this Bench hereby prohibits the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority, transferring, encumbering alternating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (ii) That the supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. (ii) That the supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. (iii) That the provisions of sub section (1) shall not apply to such transactions as may be notified by the Central Government to consultation with any financial sector regulator. (iv) That the order of moratorium shall have effect from 13.02.2017 till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33, as the case may be. (v) That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under Section 13 of the Code. (vi) That this Bench hereby appoints Mrs. Mamata Binani, Room No.6, 4 th Floor, Commerce House, 2A Ganesh Chandra Avenue, Kolkata 700013, Email address, Mamatabinani @ gmail.com (Registration No. IBBI/IPA 02/2016-17/01 as interim resolution professional (IPR) to carry the functions as mentioned under Insolvency & Bankruptcy Code. (vii) That, in view of provision of Section 17 of the IBC, henceforth interim resolution professional shall manage the affairs of the M/s. Himatsingka Resorts (P) Ltd and powers of the Board of Directors of the corporate debtor shall stand suspended and be exercised by the interim resolution professional and the officers and managers shall report to the interim resolution professional and provide access to such documents and records of M/s. Himatsingka Resorts (P) Ltd as may be required by the interim resolution professional. (viii) Let this order be communicated to the applicants and corporate debtor within 7 days from today. Accordingly, this application is disposed of." 4. Amongst others, the order of the NCLT prohibited institution of suit or continuation of pending suit or proceeding against corporate debtor i.e. the petitioner herein, including the execution of any judgment, decree or order in any Court of law, tribunal, arbitration panel etc. It was further directed that the order of moratorium shall be effective from 13.02.2017 till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under Sub Section (1) of Section 31 or passes an order of liquidation of the corporate debtor under Section 33 as the case may be. 5. It was further directed that the order of moratorium shall be effective from 13.02.2017 till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under Sub Section (1) of Section 31 or passes an order of liquidation of the corporate debtor under Section 33 as the case may be. 5. It is stated that in the meantime against same corporate debtor i.e. the petitioner, another proceeding before the NCLT was initiated by another financial creditor resulting in the registration of I.A. No.66 of 2019 in CP (IB)/06/GB/2019. In the said proceeding, the order of liquidation was passed against the present petitioner. Be that as it may, it is also stated that after the order dated 13.02.2017, the petitioner corporate debtor had satisfied the financial loans advanced by the respondents No.3 and 4 respectively and to that extent the type copy of the receipts issued by the said respondents are enclosed as Annexure 'O' page-122 of this petition. To that effect, an affidavit had also been sworn by Om Prakash Rathi in the capacity of being the Director of the respondent No.3 company stating that the petitioner corporate debtor had repaid an amount of Rs.21,89,598/- after deducting the TDS on the interest component. The affidavit specifically stated that the respondent No.3 company does not have any outstanding amount receivable from the petitioner corporate debtor. Similar affidavit had also been sworn by Om Prakash Rathi being also the Director of the respondent No.4 company wherein also the amount received had been stated with a further statement that the respondent No.4 does not have any outstanding amount receivable from the petitioner corporate debtor. 6. The present petition has been preferred on the aforesaid circumstance where the loan advanced by the financial creditor had been fully satisfied by the petitioner corporate debtor but as because no provision is available in the IBC for making an application by the corporate debtor to bring the proceeding to its end, the order dated 13.02.2017 is still continuing against them, which also includes the order of moratorium contained therein. 7. With the aforesaid grievance, the present petition has been preferred. 7. With the aforesaid grievance, the present petition has been preferred. We have taken note that the respondents No.3 and 4 financial creditors are neither appearing before the Court nor they are making any application before the NCLT under Section 12A of the IBC which provides for an application to be made by the financial creditors in the event, they desire to withdraw the proceeding before the NCLT, if the purpose of the proceeding had been purportedly satisfied. To that extent, we deprecate the conduct of the respondents No.3 and 4 to the extent that they have taken the advantage of a proceeding for the purpose of securing their unsecured loan but after their purpose was over they are turning their back to the NCLT and not cooperating any further. However, we take note of the provision of Section 12 of the IBC which provides as follows:- "12. (1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process. (2) The resolution professional shall file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyond one hundred and eighty days, if instructed to do so by a resolution passed at a meeting of the committee of creditors by a vote of seventy-five per cent. of the voting shares. (3) On receipt of an application under sub-section (2), if the Adjudicating Authority is satisfied that the subject matter of the case is such that corporate insolvency resolution process cannot be completed within one hundred and eighty days, it may by order extend the duration of such process beyond one hundred and eighty days by such further period as it thinks fit, but not exceeding ninety days: Provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once." 8. Section 12(1) of the IBC provides that the corporate insolvency process shall be completed within a period of 180 days from the date of admission of the application to initiate such process with further provision that under Section 12(2) the resolution professional may file an application to the adjudicating authority to explain the period of the corporate insolvency resolution process beyond the period of 180 days if so instructed. We have been told that in the instant case, circumstance for filing an application by the resolution professional had not arisen as in the meantime, the order of admission dated 13.02.2017 of the NCLT had been stayed by this Court by the interim order dated 20.02.2017. Be that as it may, after the proceeding been admitted by the order dated 13.02.2017, the petitioner corporate debtor had repaid the loan to the full satisfaction of the respondents No. 3 and 4 financial creditor by 16.02.2017. 9. Section 33 of the IBC inter alia provides that where the adjudicating authority before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution under Section 12 or the first track corporate insolvency resolution process under Section 56 as the case may be, does not receive a resolution plan under Section 30(6) or rejects the resolution plan under Section 31 for non-compliance of the requirement specified therein, it shall pass an order requiring the corporate debtor to be liquidated in the manner as laid down in Chapter-III of the IBC. Accordingly, it is to be understood that one of the end result of a proceeding initiated under Section 7 of the IBC would be a liquidation of the corporate debtor itself. 10. In the instant case, we have already noted that an order of liquidation had already been passed against the petitioner corporate debtor in another proceeding initiated by some other financial creditors. From the said point of view as the end result of the proceeding initiated by the order of the NCLT dated 13.02.2017 had already been achieved, we find that the purpose of initiating the proceeding under Section 7 of the IBC by the order dated 13.02.2017 had already been achieved. 11. As the proceeding before the NCLT under the IBC has to be completed within a period of 180 days, the petitioner corporate debtor had already satisfied the financial creditors to their full satisfaction and the order for liquidation had already been passed against the petitioner corporate debtor in another proceeding, we are of the view that NCLT is required to take a decision as regards the proceeding initiated by the order dated 13.02.2017. 12. The NCLT is accordingly requested to do the needful within 15 days from the date of receipt of the certified copy of the order. 12. The NCLT is accordingly requested to do the needful within 15 days from the date of receipt of the certified copy of the order. In the meantime, the earlier interim order dated 20.02.2017 shall remain in force.