Affinity Finance Services Pvt.Ltd vs Kiev Finance Ltd

Affinity Finance Services Pvt Ltd, E-253 Saraswati Kunj, Apt. 25, I.P. Extension, Patparganj, Delhi. Appellant Vs

Kiev Finance Ltd Room N.26, 133, Canning Street, Kolkata 700001. Respondent

Present: Mr. Dilip Kumar Niranjan, Advocate Mr Rishabh Gupta, CS for appellant.

JUDGMENT

26.04.2019- The appellant, operational creditor, filed petition under Section

9 of the Insolvency & Bankruptcy Code, 2016 seeking initiation of corporate

insolvency resolution process against the Respondent, Corporate Debtor for

committing default in paying of its debt. The petition was admitted by the

Adjudicating Authority (National Company Law Tribunal),Kolkata Bench,

Kolkata in terms of order dated 28.02.2018. Interim Resolution Professional

was appointed and Committee of Creditors came to be constituted.

Subsequently appointment of IRP was confirmed as Resolution Professional.

The COC had as many as six meetings but did not receive any resolution plan

during the period of 180 days. Resolution Professional approached the Adjudicating Authority for liquidation of the Corporate Debtor. The

Adjudicating Authority passed the liquidation order qua the corporate debtor

on the ground that since COC did not receive any resolution plan, the

Adjudicating Authority had no alternative but to liquidate the corporate

debtor. Resolution Professional was appointed as Liquidator. The order of

liquidation dated 10th September, 2018 goes un-assailed. However,

subsequently an application appears to have been filed by the Liquidator

under Section 12(2) read with Section 60(2) of the Insolvency & Bankruptcy

Code, 2016 seeking recall of the order dated 10th September, 2018 on the

ground that after order of liquidation was passed, M/s Nigania Promoters

Private Limited approached the Resolution Professional/Liquidator

expressing its intention to submit a resolution plan for the corporate debtor.

On consideration of the application the Adjudicating Authority was of the view

that the order of liquidation of corporate debtor passed by it could not be

subjected to review or revocation. It was also noticed by the Adjudicating

Authority that corporate debtor could be sold as an ongoing concern during

the liquidation process. The application seeking review was accordingly

dismissed.

2. After hearing learned counsel for the appellant for a while we find no

merit in the instant appeal. Admittedly no resolution applicant came forward

with a resolution plan during the corporate insolvency resolution process and

the Resolution Professional was left with no option but to seek an order of

liquidation from the Adjudicating Authority. Learned Adjudicating Authority

also did not have any option but to pass order for liquidation of the corporate debtor. Even if it is accepted that any resolution applicant did intend to

submit a resolution plan before the order of liquidation was passed, same

could be evaluated for considering its feasibility, viability and financial matrix

only during the period of Insolvency Resolution Process. The Resolution

Professional, in terms of Section 30(3) is required to present to the COC for

its approval such resolution plans which confirm the conditions referred to in

sub-section (2) of Section 30. It is only thereafter that feasibility and viability

of such resolution plan is considered by the COC and the resolution plan is

subjected to vote. All this has not been done. In fact review was sought on

the ground that the proposed resolution applicant intended to file a resolution

plan which in fact could not be evaluated and subjected to scrutiny for

determining its viability and feasibility by the COC unless the same had been

submitted within the prescribed time frame. This, coupled with the fact that

the order of liquidation goes un-assailed, did not justify recalling of the order

of liquidation at the instance of appellant, operational creditor, who claims to

be sole member of COC. The impugned order declining to recall the

liquidation order does not suffer from any legal infirmity and we do not find

any justifiable ground to interfere. The Adjudicating Authority has rightly

pointed out in the impugned order that even during the liquidation process

corporate debtor can be sold as an ongoing concern. That should allay the

apprehension of the appellant, if any, with regard to fair value of the Assets

of the Corporate Debtor.

3. For the aforesaid reasons, the appeal is dismissed. There shall be no

order as to costs.

(Justice Bansi Lal Bhat) Member (Judicial)

(Mr. Balvinder Singh) Member (Technical) Bm