Alliance Projects vs Rp Of Ind-Barath Power (Madras Ltd.)

Alliance Projects ...Appellant

Versus

RP of Ind-Barath Power (Madras) Ltd. ...Respondent

Present: For Appellant : Mr. Anirudh Wadhwa and Mr. Nikhil Pratap, Advocates

ORDER

05.07.2019 The Appellant, one of the 'Resolution Applicant' has preferred

this appeal against the order dated 22nd April, 2019 passed by the Adjudicating

Authority (National Company Law Tribunal), Hyderabad Bench, Hyderabad

whereby the Adjudicating Authority passed order of Liquidation of 'Ind-Barath

Power (Madras) Ltd. (Corporate Debtor).

2. Learned counsel appearing on behalf of the Appellant submitted that when

only few days were left for completion of 270 days the information-memorandum

was issued. Pursuant to that resolution plan was submitted, which was more

than liquidation value. From the record, we find that the 'original plan' and the'

revised plan' submitted by the Appellant was rejected by the 'Committee of

Creditors' being not viable and feasible. This apart more than 270 days have

passed. The Adjudicating Authority thus had no other option but to pass order

of liquidation. In the circumstances, no relief can be granted as sought for.

However, we are of the view that the 'Liquidator' should act in terms of the order 2

'Y. Shivram Prasad vs. S. Dhanpal & Ors.' - 'Company Appeal (AT)(Insolvency)

No. 224 of 2018 etc.' disposed of on 27th February, 2019 wherein this Appellate

Tribunal observed and held as:

"15. Learned counsel appearing on behalf of the

Appellant (Promoter) submitted that the provisions

under Section 230 may not be completed within 90

days, as observed in "S.C. Sekaran v. Amit

Gupta & Ors." (Supra).

16. It is further submitted that there will be objections

by some of the creditors or members who may not

allow the Tribunal to pass appropriate order under

Section 230 of the Companies Act, 2013.

17. Normally, the total period for liquidation is to be

completed preferably within two years. Therefore,

in "S.C. Sekaran v. Amit Gupta & Ors." (Supra),

this Appellate Tribunal allowed 90 days' time to

take steps under Section 230 of the Companies Act,

2013. In case, for any reason the liquidation

process under Section 230 takes more time, it is

open to the Adjudicating Authority (Tribunal) to

extend the period if there is a chance of approval of

arrangement of the scheme.

18. During proceeding under Section 230, if any,

objection is raised, it is open to the Adjudicating

Company Appeal (AT) (Insolvency) No. 687 of 2019 3

Authority (National Company Law Tribunal) which

has power to pass order under Section 230 to

overrule the objections, if the arrangement and

scheme is beneficial for revival of the 'Corporate

Debtor' (Company). While passing such order, the

Adjudicating Authority is to play dual role, one as

the Adjudicating Authority in the matter of

liquidation and other as a Tribunal for passing

order under Section 230 of the Companies Act,

2013. As the liquidation so taken up under the 'I&B

Code', the arrangement of scheme should be in

consonance with the statement and object of the

'I&B Code'. Meaning thereby, the scheme must

ensure maximisation of the assets of the 'Corporate

Debtor' and balance the stakeholders such as, the

'Financial Creditors', 'Operational Creditors',

'Secured Creditors' and 'Unsecured Creditors'

without any discrimination. Before approval of an

arrangement or Scheme, the Adjudicating Authority

(National Company Law Tribunal) should follow the

same principle and should allow the 'Liquidator' to

constitute a 'Committee of Creditors' for its opinion

to find out whether the arrangement of Scheme is

viable, feasible and having appropriate financial

matrix. It will be open for the Adjudicating Authority

Company Appeal (AT) (Insolvency) No. 687 of 2019 4

as a Tribunal to approve the arrangement or

Scheme in spite of some irrelevant objections as

may be raised by one or other creditor or member

keeping in mind the object of the Insolvency and

Bankruptcy Code, 2016.

19. In view of the observations aforesaid, we hold that

the liquidator is required to act in terms of the

aforesaid directions of the Appellate Tribunal and

take steps under Section 230 of the Companies Act.

If the members or the 'Corporate Debtor' or the

'creditors' or a class of creditors like 'Financial

Creditor' or 'Operational Creditor' approach the

company through the liquidator for compromise or

arrangement by making proposal of payment to all

the creditor(s), the Liquidator on behalf of the

company will move an application under Section

230 of the Companies Act, 2013 before the

Adjudicating Authority i.e. National Company Law

Tribunal, Chennai Bench, in terms of the

observations as made in above. On failure, as

observed above, steps should be taken for outright

sale of the 'Corporate Debtor' so as to enable the

employees to continue."

Company Appeal (AT) (Insolvency) No. 687 of 2019 5

The appeal stands disposed of with aforesaid observations and

directions. No cost.

[Justice S.J. Mukhopadhaya] Chairperson

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

[ Kanthi Narahari ] Member (Technical) /ns/gc

Company Appeal (AT) (Insolvency) No. 687 of 2019