Ansio Industries Private Limited vs State Bank Of India

Ansio Industries Pvt Ltd Through its Director: Ms. Subha S 17/1/1. Srirengapalayam, Rajapalayam, Virudhnagar - 626117 ...Applicant V CA Mahalingam Suresh Kumar Liquidator, Sri Venkat Ram Spinners Pvt Ltd No. 27/9, Nivedh Vikas, Pankaja Mill Road. Puliyakulam, Coimbatore-641045 Email: msureshkumar@icai.org ... 1st Respondent

State Bank of India Stressed Asset Management Branch Coimbatore, 1112, Raja Plaza, First Floor, Coimbatore-641037 Email: sbi16454@sbi.co.in ... 2nd Respondent

Bank of Baroda Stressed Asset Management Branch No. 45, Moore Street. JBAS Building, 4th Floor, Chennai-600001 Email: samche@bankofbaroda.com ... 3rd Respondent

With

Restoration Application No. 17/2024 in Company Appeal (AT) (CH) (Ins) No.47/2023 (IA Nos.169 & 518/2023)

Comp. App (AT) (CH) (INS) Nos.93 & 47 / 2023 Page 1 of 8 In the matter of:

Ansio Industries Pvt Ltd Through its Director: Ms. Subha S 17/1/1. Srirengapalayam, Rajapalayam, Virudhnagar - 626117 ...Applicant V CA Mahalingam Suresh Kumar Liquidator, Sri Venkat Ram Spinners Pvt Ltd No. 27/9, Nivedh Vikas, Pankaja Mill Road. Puliyakulam, Coimbatore-641045 Email: msureshkumar@icai.org ... 1st Respondent

State Bank of India Stressed Asset Management Branch Coimbatore, 1112, Raja Plaza, First Floor, Coimbatore-641037 Email: sbi16454@sbi.co.in ... 2nd Respondent

Bank of Baroda Stressed Asset Management Branch No. 45, Moore Street. JBAS Building, 4th Floor, Chennai-600001 Email: samche@bankofbaroda.com ... 3rd Respondent

Present: For Appellant : Mr. Dhruv Gupta and Mr. Mudit Bohara, Advocates For Respondents : Mr. AG. Sathyanarayana, Advocate for R1

ORDER

Hybrid Mode 05.11.2024:

A) Company Appeal (AT) (CH) (INS) No. 93 / 2023:

1. Though the Company Appeal (AT) (CH) (INS) No. 93 / 2023, is listed

for consideration of the Condone Delay Application being IA No. 327 / 2023,

Comp. App (AT) (CH) (INS) Nos.93 & 47 / 2023 Page 2 of 8 but, that cannot be considered until and unless, the appeal with delay

condonation itself is restored to its number.

2. The appellant has preferred an Application being Restoration

Application No. 16 / 2024, seeking recall of the order dated 04.09.2024,

whereby in the absence of the appellant, the appeal was dismissed for want of

prosecution. The reason for the absence has been explained by the appellant

in Para 4 & 5 of the application contending, that he was on his leg before the

learned NCLT, New Delhi. Hence, he could not join the proceedings before

the learned NCLAT on 04.09.2024. Though, the reason given therein, does

not seem to be reasonably acceptable, but, still taking a pragmatic view, the

Restoration Application No. 16 / 2024, would stand allowed. The order of

04.09.2024, would hereby stand recalled. The Company Appeal (AT) (CH)

(INS) No. 93 / 2023 is restored to its Original Number.

3. In the instant Company Appeal, the Appellant puts a challenge to an

order of 24.01.2023 of NCLT, Chennai, as rendered in IA/756(CHE)/2022 in

IBA/216/2019, being the proceedings held under Regulations 32(e) & (f) of

IBBI Regulations, 2016. But, at this stage, before going into the merits of the

controversy, which is subject of Company Appeal, we need to decide on the

application for condonation of delay in filing of the Appeal.

Comp. App (AT) (CH) (INS) Nos.93 & 47 / 2023 Page 3 of 8

4. The appellant has sought a condonation of delay in filing the appeal,

which according to the Registry is that of 15 days. The reason for the delay

has been explained in Para III of the application. However, the reasons given

therein, do not constitute to be a valid reason for condonation of delay, except

for the reason which has been given in Para III (a) & (b), which are quite

vague where the Appellant contends that due to his personal exigency, he was

unable to file the appeal within time.

5. Be that as it may, the Impugned Order which has been put to challenge

was pronounced on 24.01.2023 and the Certified copy of the Impugned

Judgment was issued on 08.02.2023, and the appellant has preferred the

appeal on 18.03.2023. The delay which has chanced in preferring the appeal

would be 15 days of delay, which is well within the Proviso to Sub Section 2

of Section 61 of I & B Code, 2016. Thus, the delay which has chanced in

preferring the appeal, would stand condoned. IA No. 327 / 2023, would stand

disposed of.

6. It is stated by the Appellant that, the Corporate Debtor was admitted

into CIRP on 09.08.2019, on an application filed by the Financial Creditor i.e.

State Bank of India under Section 7 of the I & B Code, 2016. Further, the

learned Adjudicating Authority vide order of 17.02.2022 had approved the

Resolution Plan in favour of the Appellant. But, the Appellant could only

remit part of the amount, within the prescribed time, which was payable under

Comp. App (AT) (CH) (INS) Nos.93 & 47 / 2023 Page 4 of 8 the approved Resolution Plan. Since, he could not pay the balance in time, he

filed an application IA / 756 (CHE) / 2022 in IBA No. 216 / 2019, requesting

for extension of time, for remitting the balance amount due as per the

Resolution Plan. This application was rejected and the Application filed by

the Resolution Professional to liquidate the Corporate Debtor under Section

33(3) of I & B Code, 2016, was allowed by the learned Adjudicating

Authority which, he seeks to challenge.

7. With the consent of the parties, the appeal itself was taken up on merits.

It was argued by the learned counsel for the Respondent that, as a matter of

fact, the Company Appeal has been rendered infructuous for the reason being

that, in pursuance to the order of Liquidation, the Auction has taken place on

12.05.2023 and the process was completed and the sale proceeds, which was

received on the sale of the Corporate Debtor, has been fully distributed.

8. It is submitted by the Respondent No. 1, that apart from this, the

concern of the Appellant is, with regards to the forfeiture of the amount paid

by him. However, the Forfeiture Clause has been contemplated under Clause

15 of the final Resolution Plan and the appellant would be bound by the same.

The said clause reads as under:

``If the Resolution Applicant fails to remit the Resolution Plan amount in accordance with the payment schedule herein, the Resolution Plan shall stand terminated and the amounts paid thereunder shall stand forfeited in accordance with the RFRP issued.''

Comp. App (AT) (CH) (INS) Nos.93 & 47 / 2023 Page 5 of 8 Owing to the fact that the forfeiture was permissible under the terms of

the Resolution Plan, that Auction has already been concluded on 12.05.2023,

and that admittedly the sale proceeds have been distributed, even though,

being vehemently opposed by the learned counsel for the respondent, and

that, as of now, the factum of Auction being held on 12.05.2023 and the sale

proceeds having been distributed is not disputed, therefore, for all practical

purposes, the appeal has been rendered infructuous. Accordingly, the

Company Appeal (AT) (CH) (INS) No. 93 / 2023 is dismissed as having

rendered infructuous.

B) Company Appeal (AT) (CH) (INS) No. 47 / 2023:

9. Company Appeal (AT) (CH) (INS) No. 47 / 2023 is listed for

restoration on Restoration Application No. 17 / 2024. Be that as it may, the

Impugned Order which has been put to challenge was pronounced on

24.01.2023 and the Certified copy of the Impugned Judgment was issued on

08.02.2023. Since the Appellant has preferred the Appeal on 18.03.2023, the

delay which has chanced in preferring the appeal would be 15 days, which is

well within the Proviso to Sub Section 2 of Section 61 of I & B Code, 2016.

Thus, the delay which has chanced in preferring the appeal, would stand

condoned and accordingly, IA No. 327 / 2023, would stand disposed of.

Comp. App (AT) (CH) (INS) Nos.93 & 47 / 2023 Page 6 of 8

10. The Appellant has preferred an Application being Restoration

Application No. 17 / 2024, seeking recall of the order dated 04.09.2024,

whereby in the absence of the Appellant, the appeal was dismissed for want of

prosecution. The reason for the absence has been explained by the Appellant

in Para 4 & 5 of the application contending, that he was on his leg before the

learned NCLT, New Delhi, and hence, he could not join the proceedings

before the learned NCLAT on 04.09.2024. Though, the reasons given therein,

do not seem to be very convincing, but, still taking a pragmatic view, the

Restoration Application No. 17 / 2024, would stand allowed. The order of

04.09.2024, would hereby stand recalled and the Company Appeal (AT) (CH)

(INS) No. 47 / 2023 is restored to its Original Number.

11. The learned counsels for the parties have agreed, that the appeal would

be considered on its merits. The learned counsel for the Respondent has

submitted that, by virtue of the Impugned Order under challenge, the prayer

of the Appellant in IA No. 985 (CHE) / 2022, to grant time to pay the balance

amount payable under the approved Resolution Plan was denied and the

consequential order under Section 33 to liquidate the Corporate Debtor in a

manner laid down in Chapter III Para II of the Code was passed. The rejection

of the aforesaid IA has been done on grounds as assigned by the learned

Tribunal in Para 12 onwards contending thereof that owing to Clause 15 of

the Resolution Plan which mandates the timeline and the Forfeiture Clause, its

Comp. App (AT) (CH) (INS) Nos.93 & 47 / 2023 Page 7 of 8 invocation does not suffer from any apparent error. Since admittedly, the

Appellant has not paid the amount as mandated to be paid under the

Resolution Plan, extension of time to pay the same could not have been

granted. Further, since the Forfeiture Clause was already built into the

Resolution Plan itself, the forfeiture of the amount paid by the Appellant

could not be said to be illegal.

12. Apart from it, the learned counsel for the Respondent has submitted

that, as of now, no cause survives owing to the fact that, Auction has already

been held on 12.05.2023, and the sale proceeds have been distributed. Hence,

Company Appeal (AT) (CH) (INS) No. 47 / 2023, would be dismissed as

having rendered infructuous, with an efflux of time.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical)

SR/TM/MS

Comp. App (AT) (CH) (INS) Nos.93 & 47 / 2023 Page 8 of 8