A.P Abdul Kareem vs Om Industrial Corporation & Anr

A.P Abdul Kareem ...Appellant

Vs.

Om Industrial Corporation & Anr. ...Respondents

Present: For Appellant: - Mr. Sunav Rastogi, Advocate.

For Respondents: - Mr. G.K. Jain, Chartered Accountant for R1.

O R D E R

16.04.2019─ This appeal has been preferred by the Appellant,

Shareholder of 'M/s. Hajee A.P. Bava & Company Constructions Pvt.

Ltd.'- ('Corporate Debtor') against the order dated 11th March, 2019

passed by the Adjudicating Authority (National Company Law Tribunal),

Bengaluru Bench, Bengaluru, admitting the application under Section 9

of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short)

preferred by 'M/s. OM Industrial Corporation'- ('Operational Creditor')

against the 'Corporate Debtor'.

2. Learned counsel appearing on behalf of the Appellant submitted

that the 'Committee of Creditors' has not yet been constituted and the

Appellant is ready to pay the total dues to the Respondent- 'Operational

Creditor'.

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3. Learned counsel for the Appellant has brought Demand Draft of

Rs.66,87,540/- (Rupees Sixty Six Lakh Eighty Seven Thousand Five

Hundred Forty Only), a copy of which has been enclosed with the appeal.

4. On 15th April, 2019, when the matter was taken up, Mr. G.K. Jain,

Chartered Accountant along with Mr. Hemant Sarin, Advocate appearing

on behalf of 'M/s. OM Industrial Corporation'- ('Operational Creditor')

submitted that the admitted claim by the 'Interim Resolution

Professional' is Rs.74,30,682/- which includes interest. This apart, the

'Operational Creditor' had to pay Rs.2 Lakhs towards the Resolution Cost

to the 'Interim Resolution Professional' for publication of advertisement,

etc.

5. Mr. A. Harish, Chartered Accountant, the 'Interim Resolution

Professional' also appeared on 15th April, 2019, while he accepted that

the 'Committee of Creditors' having not yet been constituted submitted

that he is entitled for fee for the working period of 33 days, which was

assessed by this Appellate Tribunal at Rs. 2 Lakhs.

6. Today, when the case was taken up, learned counsel appearing on

behalf of the Appellant has handed over three Demand Drafts details

whereof given below: -

(i) Demand Draft No.994654 dated 18th March, 2019 issued by

'The Federal Bank' for Rs.66,87,540/- (Rupees Sixty Six Lakh

Eighty Seven Thousand Five Hundred Forty Only) issued in the

name of 'OM Industrial Corporation'.

Company Appeal (AT) (Insolvency) No. 287 of 2019 3

(ii) Demand Draft No.994738 dated 12th April, 2019 issued by 'The

Federal Bank' for Rs.7,43,142/- (Rupees Seven Lakh Forty Three

Thousand One Hundred Forty Two Only) issued in the name of

'OM Industrial Corporation'.

(iii) Demand Draft No.067498 dated 15th April, 2019 issued by

'The Federal Bank' for Rs.2,00,000/- (Rupees Two Lakhs Only)

issued in the name of 'OM Industrial Corporation'.

Thus, a total sum of Rs.76,30,682/- which includes the principal

amount with interest and Rs. 2,00,000/- towards the 'Resolution Cost'

which was paid on behalf of the 'Interim Resolution Professional'. The

aforesaid Demand Drafts are handed over to Mr. G.K. Jain, Chartered

Accountant for their onward transmission to 'M/s. OM Industrial

Corporation'.

7. Learned counsel appearing on behalf of the Appellant has also

brought a Demand Draft No.067499 dated 15th April, 2019 issued by 'The

Federal Bank' for Rs.2,16,000/- (Rupees Two Lakh Sixteen Thousand

Only) in the name of Mr. Addanki Haresh, 'Interim Resolution

Professional' but because of the absence of the said 'Interim Resolution

Professional' today, it cannot be handed over. Learned counsel for the

Appellant will hand over the same to Mr. Addanki Haresh, 'Interim

Resolution Professional' within 15 days.

Company Appeal (AT) (Insolvency) No. 287 of 2019 4

8. In view of the fact that the total amount has been paid to the

'Operational Creditor' and the 'Committee of Creditors' has not yet been

constituted, we set aside the impugned order dated 11th March, 2019.

9. In effect, order (s), passed by the Adjudicating Authority appointing

'Interim Resolution Professional', declaring moratorium, freezing of

account, and all other order (s) passed by the Adjudicating Authority

pursuant to impugned order and action, if any, taken by the 'Interim

Resolution Professional', including the advertisement published in the

newspaper calling for applications all such orders and actions are

declared illegal and are set aside. The application preferred by

Respondent under Section 9 of the 'I&B Code' is dismissed. Learned

Adjudicating Authority will now close the proceeding. The 'Corporate

Debtor' (company) is released from all the rigour of law and is allowed to

function independently through its Board of Directors with immediate

effect.

10. The appeal is allowed with aforesaid observation. However, in the

facts and circumstances of the case, there shall be no order as to cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice A.I.S. Cheema) Member(Judicial)

(Kanthi Narahari) Member(Technical) Ar/g Company Appeal (AT) (Insolvency) No. 287 of 2019