Anuj Tejpal vs Rakesh Yadav & Anr

National Company Law Appellate Tribunal, New Delhi Principal Bench I.A. No. 815 of 2021 in COMPANY APPEAL (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094, 1116 of 2021 and Diary Nos. 27487 & 27488 dtd. 23.06.2021. (Arising out of Order dated 30th March, 2021 passed by National Company Law Tribunal, Ahmedabad Bench, Ahmedabad, Court 2 in C.P No.- 40/NCLT/AHM/2020).

IN THE MATTER OF:

Anuj Tejpal Director, of the Suspended Board of Directors OYO Hotels and Homes Private Limited Flat No. 505, Mangalayatan, Jain mandir Raod, Bhimganj Mandi Kota Junction, Kota 324002 ...Appellant

Versus

1. Rakesh Yadav S/o Shri Malkhan Singh Yadav Residing at Penthouse No. 1, Tower D The Villas, DLF Phase 2 Gurgaon 122 002 ...Respondent No. 1

2. OYO Hotels and Homes Private Limited Through J. Shah Interim Resolution Professional, OYO Hotels and Homes Private Limited Having his office at 408, Chitrarath Complex, Off. C.G. Road, Navrangpura, Ahmedabad 380 009, Gujarat ...Respondent No. 2

Appellant: Mr. Mukul Rohatgi, Sr. Advocate alongwith Mr. Abhijeet Sinha, Mr. Jeevan Ballav Panda, Ms. Shalini Sati Prasad, Ms. Meher Tandon, Mr. -2-

Satish Padhi, Mr. Gaurav Sharma, Ms. Shreya Agarwal, Mr. Ishan Nagar, and Mr. Harsh Kaushik.

Respondents: Mr. Rakesh Yadav (in person), Mr. Kumar Anurag Singh, Mr. Srinivas Kotni, Mr. Shantam Gorawara and Mr. Zain A Khan, for R-1. Mr. Keyur J. Shah and Ms. Noopur K Dalal, for IRP (R-2). Proposed Mr. Pankaj Jain, for I.A. 941 of 2021. Intervenors: Ameya Ranade, for I.A. 956 of 2021. Mr. Mohit Chaudhary and Ms. Garima Sharma, for I.A. 957 of 2021. Mr. Ramchandra Madan and Mr. Rahul Gupta, for I.A. 1082, 1083, 1084, 1085 & 1086 of 2021. Mr. Krishnendu Datta, Sr. Advocate alongwith Mr. Samer Parekh, Mr. Sumit Goel, Ms. Sonal Gupta and Ms. Malvika Bhenot, for I.A. 1094 of 2021. Mr. Salvador Santosh Rebello, for I.A. 1116 of 2021. Mr. Debesh Panda, for Diary No. 27487 & 27488. Ms. Mithali Gupta, Mr. Raghav Sharma, Ms. Anukriti Dua, Mr. Mukesh Suhkhija, Mr. P.S. Ghai, Mr. Paras Mithal and Mr. Carlos De Sousa.

JUDGEMENT

[Per; Shreesha Merla, Member (T)]

1. The Appellant erstwhile Director of 'OYO Hotels and Homes Private

Limited' (the 'Corporate Debtor') has preferred the instant Appeal against the

Order of Admission of Application under Section 9 of the Insolvency and

Bankruptcy Code, 2016 (in short, the 'Code') filed by Mr. Rakesh Yadav/the

'Operational Creditor'. The Order of Admission passed on 30.03.2021 by the

Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench)

and the consequential directions in the nature of passing of moratorium and

appointment of Interim Resolution Professional (IRP) has been assailed

through this Appeal on the following grounds:-

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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 In absence of any Agreement subsisting at the time of filing of the

Petition between the Appellant and the second Respondent there is no

privity of Contract between the two; the Learned Adjudicating Authority

has considered the existence of a 'Pre-Existing Dispute'; the second

Respondent (erstwhile Alcott Town Planners Private Limited) had

executed the Management Service Agreement (MSA) dated 16.11.2018,

with the first Respondent (hereinafter referred to as the 'Operational

Creditor') to manage and operate Hotel Yellow White Residency situated

at Gurgaon for which the 'Operational Creditor' received a Security

Deposit of ₹ 13,50,000/- in addition to the investment made by the

second Respondent of approximately ₹ 14,25,098/- as capital

expenditure; during the subsistence of MSA all rights and liabilities

were transferred to Mypreferred Transformation and Hospitality Private

Limited (MTH) a distinct legal entity with effect from 01.06.2019; MTH

revised the term of commercial arrangement last on 17.07.2019,

wherein the benchmark revenue payable to the 'Operational Creditor'

was modified; there was no objection raised at that point of time; MTH

had made the payments as per modified commercial terms; the

concerns of the 'Operational Creditor' raised on 09.09.2019 to the

generic 'OYO Office' was sought to be resolved amicably; pending the

negotiations, MTH paid the revised benchmark revenue to the

'Operational Creditor' for the period July and August 2019; Section 8

Demand Notice was issued on 13.09.2019 by the 'Operational Creditor'

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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to Alcott Town Planners Private Limited demanding payment of ₹

7,02,000/- pertaining to the period July 2019 to September 2019

another Demand Notice was issued on 11.11.2019 in terms of Section

8 of the Code now demanding an amount of ₹16,02,000/- pertaining for

the period July 2019 to November 2019; both Demand Notices were

incorrectly addressed to R-2 when all the rights and obligations under

MSA were vested with MTH.

 Learned Adjudicating Authority having observed in the Impugned Order

that payments were remitted by MTH and accepted by the 'Operational

Creditor' for the relevant period, ignored the factual position that the

'Corporate Debtor' and MTH are two separate and distinct legal entities.

 The dues under the present MSA if payable to the 'Operational Creditor'

can only be claimed against MTH and not against R-2 and therefore the

Learned Adjudicating Authority ought not to have admitted the Petition

under Section 9 ignoring the factum that the Application was filed

against incorrect legal entity and also the existence of 'Pre-Existing

Dispute'.

2. This Tribunal on 08.04.2021 based on the submission of the Learned

Counsel that the 'Operational Creditor' has wrongly proceeded against the

'Corporate Debtor' instead of the sister concern and that the sister concern

has already paid all the amounts claimed by the 'Operational Creditor' and

that the Committee of Creditors has not yet been constituted, issued notice

and suspended the Constitution of the Committee of Creditors. The Counsel

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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for the Appellant further submitted that all efforts would be made to settle

with the 'Operational Creditor' under Section 12-A of the Code.

3. Subsequently, the Appellant filed IA No. 815 of 2021 under Rule 11 read

with Rule 31 of the National Company Law Appellate Tribunal Rules, 2016

(NCLAT Rules) seeking a direction to set aside the Impugned Order dated

30.03.2021, in exercise of the inherent powers of this Tribunal under Rule 11,

in view of the settlement arrived at between the parties. It is stated that all

disputes, claims and counter claims of the 'Operational Creditor' qua both R-

2 OYO Hotels and Homes Private Limited as well as MTH stand settled to the

full satisfaction of the parties and the 'Operational Creditor' has issued a letter

dated 23.04.2021 to that effect. It is also submitted that the IRP has received

the payment towards the total expenses incurred by him and there is no

further amount outstanding in this regard.

4. The Respondent/'Operational Creditor' vide a communication dated

23.04.2021, confirmed as follows:-

'd. That Mypreferred Transformation and Hospitality Private Limited has, paid to me, a sum of INR 16,02,000 vide Demand Draft No. 714502 dated 03 April 2021 drawn on Citi Bank, being the total operational debt amount as per my Petition under Section 9 of the Code.

e. Consequently, all the disputes/claims and counterclaims of the Applicant qua both Oyo Hotels and Homes Private Limited as well as Mypreferred Transformation and Hospitality Private Limited stand settled to the full satisfaction of the Parties and the Parties have agreed that they shall not claim or raise any dispute against each other which is subject matter of the Application bearing No. CP (IB) No.

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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40/NCLT/AHM/2020 pending before the Hon'ble NCLT or otherwise in view of the amicable settlement.'

5. During the pendency of IA No. 815 of 2021, the following Intervention

Applications have been filed by the proposed Intervenors, which are detailed

as hereunder:-

I.A. No. Intervenor

I.A. No. 941 of 2021 Madhu Choudhary (Proprietor of Sher Singh Palace). I.A. No. 956 of 2021 M/s. Max Heights Infrastructure Ltd. I.A. No. 957 of 2021 M/s. Regalia Retreat. I.A. No. 1082 of 2021 M/s. Monish Investment Pvt. Ltd. I.A. No. 1083 of 2021 Ghai Hotels & Investment Co. Pvt. Ltd. I.A. No. 1084 of 2021 M/s. Lovely Hotels Pvt. Ltd. I.A. No. 1085 of 2021 M/s. Hotel Samrat. I.A. No. 1086 of 2021 Rajdoot Hospitality LLP. I.A. No. 1094 of 2021 Federation of Hotel and Restaurant Association of India. I.A. No. 1116 of 2021 Hotel Horizon.

Diary No. 27487 dtd. Dost Hospitality Services Pvt. Ltd. 23.06.2021 Diary No. 27488 dtd. Karmyogi Properties Pvt. Ltd. 23.06.2021

6. The Intervention Application IA 957 of 2021 is preferred by M/s.

Regalia Retreat on the following grounds:-

 The Applicant is a partnership concern carrying on the business of

Hotels, Restaurants, Guest Houses in 2006 in the name and style of

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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Hotel Regalia Retreat. While so, the agents of an entity named M/s.

Oravel Stays Pvt. Ltd., merged into the Corporate Debtor Company with

effect from 01.11.2019, approached the Applicant with a proposal to

run Hotel Regalia Retreat under the label of 'OYO Homes'.

 The Applicant entered into a contract with the 'Corporate Debtor' on

15.02.2018, as per the terms of which, the 'Corporate Debtor' agreed to

provide assured benchmark revenue of ₹12,00,000/- per month and

charge a fee of 2.5% and commission of 12.5% on the total revenue

generated in a month.

 The parties entered into a new contract dated 11.12.2018 whereby, the

assured benchmark revenue was reduced to ₹10,00,000/- per month,

but 'Corporate Debtor' failed to honor its part of obligation since

11.12.2018 despite modifying the terms of the contract with respect to

minimum guarantee.

 As on 01.04.2021, the 'Corporate Debtor' owes an amount of ₹

50,04,391/- to the Applicant and hence pursuant to the paper

publication dated 03.04.2021, this Applicant submitted their claims on

10.04.2021, under Form B to the IRP.

Submissions on behalf of the Learned Counsel for the proposed

Intervenor/Applicant in IA No. 957 of 2021:

 The Learned Counsel submitted that this Tribunal cannot grant the

relief of 'withdrawal of CIRP Proceedings' on account of settlement

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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between the Appellant and the 'Operational Creditor'; that as per the

ratio of 'Swiss Ribbons Pvt. Ltd. and Ors.' Vs. 'Union of India and

Ors.' (2019) 4 SCC 17, 'a party can approach NCLT directly where the

Committee of Creditors is not yet constituted, and the Tribunal may, in

exercise of inherent powers under Rule 11 of NCLT Rules, 2016, allow

and disallow an Application' and hence only NCLT is empowered to allow

withdrawal of cases by resorting to Rule 11 and not this Tribunal; that

an Application for withdrawal has to be as per the provisions of

Regulations 30(A) which has not been followed in this case and hence

sought for dismissal of the Appeal filed by the Appellant herein.

7. IA 1086 of 2021 is preferred by M/s. Rajdoot Hospitality LLP on

the following grounds:-

 The Applicant executed a Management Services Agreement (MSA) on

30.03.2019, as per the terms of which, the Hotel premises would be

maintained by the service provider for a fee equivalent to 90% of the net

room revenue; Applicant was entitled to 10% of the net room revenue

with the benchmark of ₹ 14,00,000/- in return of giving full control of

the Hotel to the service provider.

 The Corporate Debtor defaulted in payment of benchmark revenue from

2020 onwards and hence, the Applicant in response to the public

announcement dated 03.03.2021, filed a claim for an amount of ₹

1,49,83,597/- before the IRP.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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Submissions on behalf of the Learned Counsel appearing for the Applicant in

IA No. 1086 of 2021:

 Learned Counsel submitted that Rule 11 of the NCLAT Rules, 2016,

cannot be resorted to in this case as Section 12-A of the I&B Code read

with Regulation 30-A govern settlement of withdrawal of CIRP

Proceedings and the Appellant cannot bypass the said procedure; that

the Interim Order dated 08.04.2021 was obtained on the grounds that

the Appellant would settle under Section 12-A and hence sought for

dismissal of the Application and the Appeal.

8. Mr. Madhu Choudhary, proprietor of Sher Singh Palace preferred IA

No. 941 of 2021 seeking intervention on the ground that the Applicant has

rendered Lease Rent Services of Sher Singh Palace to the 'Corporate Debtor'

and entered into a Lease Agreement on 05.09.2019; that despite service of

Demand Notice dated 01.01.2021, the 'Corporate Debtor' failed to pay the debt

amount of ₹ 1,53,85,851/- and hence pursuant to the paper publication dated

03.04.2021, a claim was preferred before the IRP.

Submissions on behalf of the Learned Counsel appearing for the Applicant in

IA No. 941 of 2021:

 The Learned Counsel submitted that the Applicant does not have locus

standi to file the withdrawal Application and placed reliance on the ratio

of 'Swiss Ribbons Pvt. Ltd. and Ors.' (Supra) to buttress his argument

that CIRP are Proceedings in Rem and hence withdrawal Application

under Rule 11 cannot be entertained.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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9. M/s. Lovely Hotels Pvt. Ltd. preferred IA No. 1084 of 2021, seeking

to intervene in the present Proceedings on the ground that the Applicant

entered into a Lease and License Agreement (LLA) dated 11.07.2017, with the

'Corporate Debtor' who undertook to run the Hotel as part of OYO Platform

and generate revenue therefrom and undertook to pay a fee of ₹ 16,00,000/-

per month to the Applicant but the 'Corporate Debtor' has committed multiple

defaults to the tune of ₹ 1,57,58,429/-.

Submissions on behalf of the Learned Counsel in IA No. 1084 of 2021:

10. The Learned Counsel opposed the withdrawal Application on the

following grounds:-

 Once CIRP Proceedings is initiated, it cannot be withdrawn without a

settlement of claims of creditors as it is a proceeding in 'Rem' and placed

reliance on the following Judgements in support of his contention:-

 'Mother Pride Dairy India Pvt. Ltd.' Vs. 'Portrait Advertising

and Marketing Pvt. Ltd.', 2017 SCC OnLine SC 1789.

a. 'Swiss Ribbons Pvt. Ltd. and Ors.' Vs. 'Union of India and

Ors.' (2019) 4 SCC 17.

b. 'Indus Biotech Pvt. Ltd.' Vs. 'Kotak India Venture' (2021) SCC

OnLine SC 268.

c. 'Pioneer Urban Land and Infrastructure Ltd.' Vs. 'Union of

India', (2019) 8 SCC 416.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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 Learned Counsel strenuously argued that NLCAT has always rejected

Applications of Withdrawal at the stage of Appeal and relied on the

following Judgements in support of his contentions:-

a. 'Sintex Plastics Technology Ltd.' Vs. 'Zielen Industries Pvt.

Ltd.' (2021) OnLine NCLAT 7.

b. 'Sandeep Kukkar' Vs. 'Vijay Kumar Todi & Anr.', 2020 SCC

OnLine NCLAT 897.

c. 'Francis John Kattukaran' Vs. 'The Federal Bank Ltd.'

Company Appeal (AT) (Insolvency) No. 242 of 2018.

 Learned Counsel sought for dismissal of the Application otherwise it

would cause great prejudice to the Intervenor and it would be an

exercise in futility.

11. M/s. Hotel Samrat preferred IA No. 1085 of 2021, seeking

Intervention on the ground that the Applicant executed an MSA with the

'Corporate Debtor' on 15.07.2018, whereby the 'Corporate Debtor' was to

operate, manage and provide accommodation services under the name of 'OYO

Town House' for a payment of fee, but has defaulted making the said payments

since March 2020 to the tune of ₹ 5,56,53,927/- and hence submitted its

claim for the said amount before the IRP.

Submissions of the Learned Counsel in IA No. 1085 of 2021:

 The Learned Counsel opposed the Withdrawal of Application at the

Appellate stage based on the ratio laid down by the Hon'ble Supreme

Court in 'Mother Pride Dairy India Pvt. Ltd.' Vs. 'Portrait I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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Advertising and Marketing Pvt. Ltd.' and 'Swiss Ribbons Pvt. Ltd.

and Ors.' Vs. 'Union of India and Ors.'.

12. Federation of Hotel and Restaurant Association of India preferred

IA No. 1094/2021 seeking intervention, on behalf of its hotelier

Members: Learned Senior Counsel for the Applicants in IA No. 1094 of 2021,

vehemently opposed this withdrawal Application as not maintainable on the

following grounds:-

 Despite the insertion of Section 12-A of the Code, there was no provision

which dealt with the situation where withdrawal, Application was

sought for 'after Admission but before Constitution of CoC'. Such a

situation was dealt with by the Hon'ble Supreme Court in 'Swiss

Ribbons Pvt. Ltd. and Ors.' (Supra). Subsequent to the above

Judgment, Regulation 30-A of the Insolvency and Bankruptcy Board of

India (Insolvency Resolution Process for Corporate Persons)

Regulations, 2016 was substituted with effect from 25.07.2019, which

provides for Application for withdrawal of Proceedings under Section 9

after its Admission but before the Constitution of the CoC provided

i. has to be filed before the NCLT;

ii. by the Applicant to the IRP; iii. in Form FA accompanied with Bank guarantee;

 After Regulation 30-A was substituted on 25.07.2019, an Application

for withdrawal, cannot be filed before NCLAT by invoking inherent

powers under Rule 11 and such Application could be filed only before

NCLT as per the ratio of 'Swiss Ribbons Pvt. Ltd. and Ors.' (Supra). I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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 Prayer for withdrawal on the basis of settlement with one Creditor ought

to be rejected as it is ultra-virus to the scope and intent of the Code.

 The Intervenor FHRAI represents Hotels and Restaurant across the

country and pursuant to the Admission of the Insolvency Proceedings,

IRP invited the claims and 46 numbers of Members of FHRAI have

already filed their respective claims against the 'Corporate Debtor'

amounting to ₹ 96.44 Crs.

 Though the CoC has not been yet constituted, it is only NCLT which is

required to hear all the concerned parties and it may in its discretion

either allow or disallow the Application. In support of his submission,

Learned Counsel placed reliance on the following Judgements:-

a. 'Sh. Sushil Ansal' Vs. 'Ashok Tripathi and Ors.', 2020 SCC

OnLine NCLAT 680.

b. 'Jai Kishan Gupta' Vs. 'Green Edge Build Tech LLP and Ors.'

2019 SCC OnLine NCLAT 916

c. 'Bhaskar Biswas' Vs. 'Devi Trading and Holding Pvt. Ltd.

and Anr.' in 2019 SCC OnLine NCLAT 1072.

 Learned Senior Counsel further contended that the 'Corporate Debtor'

did not file any financial statements in the last two years and owes large

amounts of money to the Members of FHRAI.

 Learned Sr. Counsel concluded that Application of Withdrawal is not as

per Regulation 30-A; that the Applicant is a Non-Profit Registered

Company representing the interests of its Members, who are hoteliers

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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and that the 'Corporate Debtor' cannot strictly be construed as a 'start

up' as the turnover of the entity has exceeded 100 Crs. and as per the

definition of 'start up' issued in the notification by the Ministry of

Commerce and Industry, the turnover of the entity should not exceed

100 Crs.

13. IA No. 956 of 2021 is preferred by Intervenor Applicant M/s. Max

Heights Infrastructure Ltd. on the following grounds:-

 It is stated that the Intervenor/Applicant is representing the following

Applicant/'Operational Creditors' as their authorized representative

S. Operational Creditor Agreement Total Claim (In ₹)

1. M/s. HOTEL GOLDEN Management and 2,37,45,705 SWAN, Mumbai Service Agreement

2. M/s. SONA HOTELS, Management and 1,26,30,388 Goa Service Agreement

3. M/s. Vikas Mineral Food Management and 6,50,00,000 Pvt. Ltd., Chandigarh Service Agreement

4. M/s. PB Ventures LLP, Marketing and 14,58,87,870 Mumbai Operational Consulting Agreement

5. M/s. SAAG VENTURES, Marketing and 48,62,081 Bangalore Operational Consulting Agreement

6. M/s. ARMA Management and 4,87,24,193 HOSPITALITY, Mumbai Service Agreement

7. M/s. AIRPORT Marketing and 25,60,195 RESIDENCY, Bangalore Operational Consulting Agreement

8. M/s. Samaroh Marketing and 41,08,997 Hospitality, LLP, Indore Operational Consulting Agreement

9. M/s. OCEANS 7 Hotels Management and 3,23,51,780 and Resorts, Goa Service Agreement

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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10. M/s. Aildasani Hotels & Marketing and 27,37,708 Resorts, Indore Operational Consulting Agreement

11. Max Heights Lease Agreement 74,41,533 Infrastructure Ltd., New Delhi TOTAL CLAIM AMOUNT ₹ 35,00,50,450

 It is stated that the Applicants and the 'Corporate Debtor' entered into

Lease Agreements and MSAs wherein the 'Corporate Debtor' interalia

agreed to use and run the properties on various terms and conditions

on payment of rental and license fee, but has defaulted to the tune of

₹ 35,00,50,450/- for which various notices were sent, but there was no

response.

 The Applicant filed an Application before the National Company Law

Tribunal, New Delhi Bench which stood transferred to National

Company Law Tribunal Ahmedabad Bench on account of change in the

address of the 'Corporate Debtor'.

 Applicant/'Operational Creditors' in order to secure the rights and

without prejudice to their own independent Applications before different

fora, including the NCLT, submitted their claims before the IRP.

Submissions of the Learned Counsel appearing on behalf of the proposed

Intervenor/Applicant in IA No. 956 of 2021:

 The present Proceedings are hit by Section 65 as the said transaction is

being carried out only to defraud the Creditors.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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 Once CIRP is initiated, it cannot be withdrawn without settlement of

claims of all the Creditors as it is a Proceeding in Rem.

 NCLAT in 'Mother Pride Dairy India Pvt. Ltd.' Vs. 'Portrait

Advertising and Marketing Pvt. Ltd.' held that once an Application

is admitted, it cannot be withdrawal.

 The Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. and Ors.'

(Supra) has laid down that only NCLT has jurisdiction to entertain

'Applications of withdrawal'.

14. IA No. 1116 of 2021 is preferred by M/s. Hotel Horizon seeking

directions on the following grounds:-

 Hotel Horizon Goa is a unit of M/s. De Sousa Leisures Pvt. Ltd. and has

entered into an MSA with the 'Corporate Debtor' on 28.07.2018 as per

the terms of which, revenue generated ought to be shared by the

'Corporate Debtor' with the Applicant, but has defaulted to the tune of

₹ 2,47,95,929/-.

 The 'Corporate Debtor' on 28.03.2020 and 25.04.2020 expressed their

inability to perform the obligations under MSA due to the pandemic and

altered the terms of the Agreement.

 As a counter blast, a notice was sent by Mypreferred Transformation

and Hospitality Private Limited (sister concern of the 'Corporate Debtor')

to the Applicant on 24.08.2020 for recovery of outstanding dues

asserting that certain licenses of the Applicant have not been renewed.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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 A default notice was sent to the 'Corporate Debtor' on 11.11.2020 to pay

the outstanding amount due, but there was no response.

 The Applicant submitted their claim to the IRP in the prescribed Form

B.

Submissions of the Learned Counsel appearing on behalf of the proposed

Intervenor/Applicant in IA No. 1116 of 2021:

 Learned Counsel submitted that this Tribunal in 'Mother Pride Dairy

India Pvt. Ltd.' (Supra) has laid down that once an Application is

admitted cannot be withdrawn since, other Creditors are entitled to

raise their claims.

 Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. and Ors.' (Supra)

has observed that the Proceedings before the Adjudicating Authority is

a collective Proceeding and that a party can approach NCLT directly for

exercise of inherent powers under Rule 11 of NCLT Rules, 2016.

 NCLAT cannot permit withdrawal of an admitted Insolvency

Application.

 The Application must necessarily be filed through IRP only before the

NCLT. Allowing the IA and vacating the stay on the Constitution of

Committee of Creditors would prejudice their rights.

 In support of his contention, the Learned Counsel placed reliance on

the following Judgements:-

Sr. No. Case Name i. 'Jai Kishan Gupta' (Supra).

I.A. No. 815 of 2021 in

Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -18-

ii. 'Samarth Lifters Pvt. Ltd.' Vs. 'DBM Geotechnics and Constructions Pvt. Ltd' CP(IB) 1798 of 2018.

iii. 'Abhishek Singh' Vs. 'Huhtamaki PPL Ltd.' Company Appeal (AT) (Insolvency) No. 235 of 2021.

iv. 'Hadi Mohd. Taher Badri' Vs. 'Neeraj Gupta' Company Appeal (AT) (Insolvency) No. 107 of 2019.

v. 'Javitri Estates Pvt. Ltd.' Vs. Chryso India Pvt. Ltd.

and Anr.' Company Appeal (AT) (Insolvency) No. 888 of 2019.

vi. 'Chitra Sharma' Vs. 'Union of India' WP (Civil) No. 744 of 2017.

vii. 'Ghanshyam Mishra and Sons Private Limited' Vs. 'Edelweiss Asset Reconstruction Company Limited' Civil Appeal No. 8129 of 2019.

15. The Intervenor Applicant M/s. Monish Investment Pvt. Ltd.

preferred IA No. 1082 of 2021 seeking intervention on the following

grounds:-

 The Applicant and the 'Corporate Debtor' entered into an MSA on

30.03.2019, whereby the 'Corporate Debtor' was to operate and provide

accommodation services under the brand name OYO Rooms for which

the Applicant was entitled to 10% of the net room revenue with the

benchmark revenue of ₹ 17,00,000/-.

 The 'Corporate Debtor' defaulted in making payments from August 2019

onwards.

 The Applicant invoked Arbitration by way of a Petition under Section 11

of the Arbitration and Conciliation Act 1996, which is pending

Adjudication before Hon'ble High Court of Bombay.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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 After CIRP was initiated against the 'Corporate Debtor', 6 'Operational

Creditors' submitted their claims before the IRP to the tune of ₹

2,60,51,180/-.

Submissions of the Learned Counsel appearing on behalf of the

Intervenor/Applicant in IA No.1082 of 2021:

 NCLAT cannot permit the withdrawal of an admitted Insolvency

Application.

 Once CIRP is initiated it cannot be withdrawn without settling of claims

of all Creditor as it is a Proceeding in Rem.

16. Ghai Hotels and Investment Company Pvt. Ltd. is the

Intervenor/Applicant in IA No. 1083 of 2021. The Applicant is seeking

intervention on the following grounds:-

 The Applicant is an 'Operational Creditor' as they have entered into an

MSA with the 'Corporate Debtor' on 15.07.2018, whereby Hotels would

be run by the 'Corporate Debtor' with sharing of 37% of the revenue to

a minimum benchmark revenue of ₹ 10,00,000/- from the 'Corporate

Debtor'.

 The 'Corporate Debtor' deposited the benchmark revenue from October

2018 till March 2020 and thereafter defaulted.

 On 15.04.2021, the Applicant issued a Legal Notice, but there was no

response.

 The Applicant approached the Hon'ble High Court of Bombay by way of

Arbitration Application (L) No. 3107 of 2020. By Order dated

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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21.09.2020, the Hon'ble High Court of Bombay preferred all disputes

under MSA to a sole Arbitrator and the matter was listed on 26.09.2020.

On 30.10.2020, the sole Arbitrator recorded the consent of the

Applicant and the 'Corporate Debtor' to continue operating under

revenue sharing model till February, 2021.

 On 12.04.2021, in light of the public announcement made on

03.03.2021, this 'Operational Creditor' preferred their claim before the

IRP to the tune of ₹ 5,74,09,620/-.

Submissions of Learned Counsel appearing on behalf of the proposed

Intervenor/Applicant in IA No. 1083 of 2021:

 It is submitted that a withdrawal of CIRP Process can be carried out any

stage but only before the NCLT and after submission of claims of all the

Creditors.

 Section 12-A read with Regulation 30-A is a complete Code governing

settlement and the Appellant herein is trying to bypass the provisions

of the Code.

17. Diary No. 27487 is preferred by the proposed Intervenor Applicant/

Dost Hospitality Services Pvt. Ltd.; a sister concern of Karmyogi

Properties Pvt. Ltd. (Diary No. 27488) both seeking similar directions on

the following grounds:-

 It is the case of the Proposed Intervenor Applicants that only a direction

to conduct a forensic Audit would bring to light the fraud being

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -21-

committed by the 'Corporate Debtor' with respect to suppression of

material/invoices in the Monthly Booking Dump Data.

 That both the Applicant and its sister concern invoked Arbitration

Proceedings against the 'Corporate Debtor' and a sole Arbitrator was

appointed by the Hon'ble High Court of Delhi in OMP(I) 212/2021 and

the matter has already reached the stage of final hearing.

 That only the IRP can file the Withdrawal Application as per the

procedures in terms of Regulation 30-A(1)(a).

 Seek for investigation to be conduced by the Central Government in the

interest of Justice to bring to light the malpractices indulged in by the

'Corporate Debtor'.

18. The IRP filed the list of Creditors and their claims by way of reply before

this Tribunal.

Submissions of the Learned Sr. Counsel appearing for the Appellant:-

19. Learned Counsel appearing for the Appellant vehemently contended

that since settlement was arrived at prior to the Constitution of Committee of

Creditors, the question of applicability of Section 12-A does not arise in this

case; that NCLAT has exercised its inherent power in Rule 11 in several cases

keeping in view the scope and objective of the ILC Report and therefore it

cannot be said that only NCLT has the inherent powers of exercise of Rule 11

and not NCLAT; that this is not an Application under Section 12-A and

therefore Regulation 30-A and the procedure thereunder is not applicable to

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -22-

the facts of this case; that para 82 of 'Swiss Ribbons Pvt. Ltd. and Ors.'

(Supra) cannot be read in isolation and has to be read together with paras 79

to 81, to correctly interpret the scope and intent of the Code; that the

Intervention Applications are not maintainable at this stage of Appeal having

regard to the settlement arrived at between the parties and the fact that CoC

has not yet been constituted; that Law of Land under Article 141 of the

Constitution can only be replaced by a validating law and hence Rule 11

remains and Regulation 30-A cannot run counter to Rule 11 when the CoC

has not yet been constituted and that whenever there is a conflict, substantive

parent law is to be followed. Learned Sr. Counsel submitted that the scope of

the Code Code is meant for 'revival' and not for 'recovery of dues', if any.

20. As regarding the Intervention Application No. 1094 of 2021

preferred by Federation of Hotel and Restaurant Association of India,

Learned Senior Counsel contended that FHRAI is filing the present Application

on behalf of its Members, the details of which has not been given; that the

Application is devoid of material and has been filed on behalf of unknown

number of Members with unknown amount of claims and no details of

Members who are yet to prove their case and hence the Intervention

Application is devoid of merit and ought to be dismissed at the threshold.

21. He further contended that the proposed Intervention Applications are

contrary to the settled principles of law laid down in 'Swiss Ribbons Pvt. Ltd.

and Ors.' (Supra); that the proposed Intervenors are not allowed to contest

the merit of the Appeal or contest the settlement of the subject dispute as

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -23-

Proceedings under the Code are not debt recovery Proceedings; that the

proposed Intervenors can come into existence only on the confirmation of CoC

under the Code and have no locus standi to object a settlement between the

'Operational Creditor' and a third party; that Section 14 of the Code bars the

filing of any Application against the 'Corporate Debtor' under Sections 7 and

9 during the moratorium period and that the proposed Intervenors have not

placed any documents on record to substantiate any 'debt' or 'default'. He

placed reliance on the following Judgements to buttress his argument that in

view of the settlement between the 'Operational Creditor' and MTH, no other

purported claimant can object to the setting aside of the CIRP against the

'Corporate Debtor'.

Sr. Case Name Relevant No. Paragraph 1. Swiss Ribbons Private Limited and Anr. vs. Para 79-82 Union of India and Ors. 2019 4 SCC 217 2. Narayan Singh Pathania vs. Valuelabs LLP Para 31-34

and Anr. Company Appeal (AT) (Insolvency) No. 1415 of 2019 [Order dated 09.02.2021]

3. Gajendra Sharma vs. Dinesh Sanitary Store, Para 5-6 Company Appeal (AT) (Insolvency) No. 119 of 2020 [Order dated 03.02.2020]

4. Phool Chand Goyal vs. Avneet Goyal and Ors. Para 7 Company Appeal (AT) (Insolvency) No. 1393 of 2019 [Order dated 07.02.2020]

5. Sunil Tandon vs. Manoj Kumar Anand, I.R.P. & Para 6-9 Ors. Company Appeal (AT) (Insolvency) No. 289 of 2019 [Order dated 15.04.2019]

6. Janak Dhawan vs. Famous Innovations Digital Para 8-11 Creative Pvt. Ltd. & Ors. Company Appeal (AT) (Insolvency) No. 769 of 2019 [Order dated 20.12.2019]

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -24-

7. Gouri Prasad Goenka vs. Surendra Kumar Para 6-10, Agarwal & Anr. Company Appeal (AT) 13,14 (Insolvency) No. 105 of 2020 [Order dated 30.01.2020]

22. Learned Counsel concluded that great prejudice would be caused to the

'Corporate Debtor' in view of the subsistence of the CIRP Proceedings despite

having settled the matter between 'Operational Creditor' leading to loss of

goodwill and reputation, loss of perspective investments and irreparable

losses apart from serious administrative difficulties in collection of revenue

from the existing Hotel partners, disbursement of payments of nearly 5,000

dependent Hotel owners together with disbursal of payments to vendors and

employees. He further submitted that approximately 65 properties run by the

'Corporate Debtor' have been accommodating patients for quarantining and

isolating in this pandemic.

23. The brief points which fall for consideration are:-

a. Whether NCLAT can exercise powers under Rule 11 & entertain

Applications seeking withdrawal, prior to Constitution of CoC.

b. Whether procedure under Regulation 30-A(1)(a) is applicable to this

Application.

c. Whether the Intervention Applications filed by the proposed

Intervenors, during the pendency of the Appeal, be allowed having

regard to the settlement arrived at between the Appellant and the

'Operational Creditor'/Respondent herein, prior to the Constitution of

CoC.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -25-

Assessment:

24. For better understanding of the case, paras 79 to 82 of 'Swiss Ribbons

Pvt. Ltd. and Ors.' (Supra) are being reproduced as hereunder:-

'Section 12-A is not violative of Article 14

79. Section 12-A was inserted by the Insolvency and Bankruptcy (Second Amendment) Act, 2018 with retrospective effect from 6-6-2018. It reads as follows:

"12-A. Withdrawal of application admitted under Sections 7, 9 or 10 -

The adjudicating authority may allow the withdrawal of application admitted under Section 7 or Section 9 or Section 10, on an application made by the applicant with the approval of ninety per cent voting share of the Committee of Creditors, in such manner as may be specified."

80. The ILC Report of March 2018, which led to the insertion of Section 12-A, stated as follows:

"29.1. Under Rule 8 of the CIRP Rules, NCLT may permit withdrawal of the application on a request by the applicant before its admission.

However, there is no provision in the Code or the CIRP Rules in relation to permissibility of withdrawal post admission of a CIRP application. It was observed by the Committee that there have been instances where on account of settlement between the applicant creditor and the corporate debtor, judicial permission for withdrawal of CIRP was granted [Lokhandwala Kataria Construction (P) Ltd. v. Nisus Finance and Investment Managers LLP57; Mothers Pride Dairy India (P) Ltd. v. Portrait Advertising and Marketing (P) Ltd.58; Uttara Foods and Feeds (P) Ltd. v. Mona Pharmachem4]. This practice was deliberated in light of the objective of the Code as encapsulated in the BLC Report, that the design of the Code is based on ensuring that "all key stakeholders will participate to collectively assess viability. The law must ensure that all creditors who have the capability and the willingness to restructure their

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -26-

liabilities must be part of the negotiation process. The liabilities of all creditors who are not part of the negotiation process must also be met in any negotiated solution." Thus, it was agreed that once CIRP is initiated, it is no longer a proceeding only between the applicant creditor and the corporate debtor but is envisaged to be a proceeding involving all creditors of the debtor. The intent of the Code is to discourage individual actions for enforcement and settlement to the exclusion of the general benefit of all creditors.

29.2. On a review of the multiple NCLT and NCLAT judgements in this regard, the consistent pattern that emerged was that a settlement may be reached amongst all creditors and the debtor, for the purpose of a withdrawal to be granted, and not only the applicant creditor and the debtor. On the basis read with the intent of the Code, the Committee unanimously agreed that the relevant rules may be amended to provide for withdrawal post admission if the CoC approves of such action by a voting share of ninety per cent. It was specifically discussed that Rule 11 of the National Company Law Tribunal Rules, 2016 may not be adopted for this aspect of CIRP at this stage [as observed by the Hon'ble Supreme Court in Uttara Foods and Feeds (P) Ltd. v. Mona Pharmachem4] and even otherwise, as the issue can be specifically addressed by amending Rule 8of the CIRP Rules."

(emphasis in original)

Before this section was inserted, this Court, under Article 142, was passing orders allowing withdrawal of applications after creditors' applications had been admitted by NCLT or NCLAT.

81. Regulation 30-A of the CIRP Regulations states as under:

"30-A. Withdrawal of application.- (1) An application for withdrawal under Section 12-A shall be submitted to the interim resolution professional or the resolution professional, as the case may be, in Form FA of the Schedule before issue of invitation for expression of interest under Regulation 36-A.

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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(2) The application in sub-regulation (1) shall be accompanied by a bank guarantee towards estimated cost incurred for purposes of clauses (c) and (d) of Regulation n31 till the date of application.

(3) The committee shall consider the application made under sub-regulation (1) within seven days of its Constitution or seven days of receipt of the application, whichever is later.

(4) Where the application is approved by the committee with ninety per cent voting share, the resolution professional shall submit the application under sub-regulation (1) to the adjudicating authority on behalf of the applicant, within three days of such approval.

(5) The adjudicating authority may, by order, approve the application submitted under sub-

regulation (4).

This Court, by its order dated 14-12-2018 in Brilliant Alloys (P) Ltd. v. S. Rajagopal59, has stated that Regulation 30-A(1) is not mandatory but is directory for the simple reason that on the facts of a given case, an application for withdrawal may be allowed in exceptional cases even after issue of invitation for expression of interest under Regulation 36-A.

82. It is clear that once the Code gets triggered by admission of a creditor's petition under Sections 7 to 9, the proceeding that is before the adjudicating authority, being a collective proceeding, is a proceeding in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a Committee of Creditors is constituted (as per the timelines that are specified, Committee of Creditors can be appointed at any time within 30 days from the date of appointment of the interim resolution professional). We make it clear that at any stage where the Committee of Creditors is not yet constituted, a party can approach NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the parties concerned and

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -28-

considering all relevant factors on the facts of each case.

83. The main thrust against the provision of Section 12-A is the fact that ninety per cent of the Committee of Creditors has to allow withdrawal. This high threshold has been explained in the ILC Report as all financial creditors have to put their heads together to allow such withdrawal as, ordinarily, an omnibus settlement involving all creditors ought, ideally, to be entered into. This explains why ninety per cent, which is substantially all the financial creditors, have to grant their approval to an individual withdrawal or settlement. In any case, the figure of ninety per cent, in absence of anything further to show that it is arbitrary, must pertain to the domain of legislative policy, which has been explained by the Report (supra). Also, it is clear, that under Section 60 of the Code, the Committee of Creditors do not have the last word on the subject. If the Committee of Creditors arbitrarily rejects a just settlement and/or withdrawal claim, NCLT, and thereafter NCLAT can always set aside such decision under Section 60 of the Code. For all these reasons, we are of the view that Section 12-A also passes Constitutional muster.'

(Emphasis Supplied)

25. The Learned Counsels for the Intervention Applicants strenuously

contended that as per para 82 of the aforenoted Judgement, a party seeking

withdrawal should necessarily approach NCLT directly, which Tribunal may,

in exercise of its inherent power under Rule 11 allow or disallow an

Application for withdrawal or settlement and therefore this Tribunal cannot

entertain such Applications of Withdrawal.

26. At this juncture, it is material to study the observations made by the

Hon'ble Apex Court in 'Committee of Creditors of Essar Steel India

Limited' Vs. 'Satish Kumar Gupta & Ors.' reported in (2020) 8 SCC 531

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -29-

in para 82 wherein the Hon'ble Apex Court has referred to the Judgement of

the Federal Court in 'Lachmeshwar Prasad Shukul' Vs. 'Keshwar Lal

Chaudhuri' AIR 1941 FC 5 and in 'Shiv Shakti Coop. Housing Society

Nagpur' Vs. 'Swaraj Developers and Ors.' MANU/SC/0335/2003

(2003)6SCC 659 and noted that 'an Appeal is essentially a continuation of the

original Proceeding. This being so, a change in law can always be applied in an

original or Appellate Proceeding'. It is also apposite to note the observations

in paras 42 and 43 of the aforenoted judgment, Committee of Creditors of

Essar Steel India Limited (Supra), wherein the Hon'ble Apex, Court while

examining the jurisdiction of the Adjudicating Authority and the Appellate

Tribunal, primarily, with respect to Section 30 (2) and 61 (3) placed reliance

on the ratio of K. Sashidhar Vs. Indian Overseas Bank & Anr. (2019) 12

SCC 150 and observed, 'For the same reason, even the jurisdiction of the

NCLAT being in continuation of the proceedings would be circumscribed in that

regard and more particularly on account of Section 32 of the I & B Code, which

envisages that any appeal from an order approving the resolution plan shall be

in the manner and on the grounds specified in Section 61 (3) of the I&B Code

which reads thus: .........'

Exercise of inherent powers under Rule 11 by NCLAT:

27. Rule 11 of NCLAT Rules, 2016 reads as follows:-

'11. Inherent Powers.- Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders as may be necessary for meeting the ends of justice or

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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to prevent abuse of the process of the Appellate Tribunal.'

28. This Tribunal in 'Jogender Kumar Arora' Vs. 'Dharmendar Sharma

and Ors.' Company Appeal (AT) (Insolvency) No. 94, 95 of 2019 decided

on 12.02.2019 has held as follows:-

'3. Mr. Dharmender Sharma, Proprietor of 'ADP Interiors and Contractors' (Operational Creditor) appears in person and submits that the parties have settled and he has received the settled amount. Mr. Sandeep Chandna, Resolution Professional submits that he has performed duties for about 20 days and pursuant to publication of notice he has collating the claims. He had quoted the fees of Rupees Ten Lakhs for 30 days and incurred Rs. 4.5 lakhs for publication of notice etc.

4. Mr. A.M. Ranjan Kumar, Advocate wanted to intervene on behalf of the Eight Financial Creditors to oppose the prayer. He submitted that the Eight Financial Creditors have already submitted their claim before the 'Resolution Professional'. However, parties having settled the matter prior to Constitution of 'Committee of Creditors', we are not inclined to entertain any application for creditors.

5. Further in view of the decision of the 'Swiss Ribbons Pvt. Ltd. & Anr', and in exercise our inherent powers under Rule 11 of the NCLAT Rules, 2016, allow the prayer made by Mr. Dharmender Sharma for withdrawal of the application in view of the settlement already reached. We accordingly set aside the impugned order dated 10th January, 2019 and dismiss the C.P. (IB) No. 158/Chd/Hry/2018 as withdrawn'.

29. In the aforenoted Judgement though eight Financial Creditors wanted

to intervene opposing the settlement and have contended that they have

already submitted their claims before the Resolution Professional, this

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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Tribunal, taking into consideration that the parties have settled the matter

prior to the Constitution of Committee of Creditors did not entertain the

Intervention Applications and has allowed the Application of Withdrawal in

exercise of inherent power under Rule 11 of the NCLAT Rules, 2016 and closed

the Proceedings.

30. This Tribunal in 'Avishek Roy' Vs. 'Diamond Steel Enterprise and

Ors.' in Company Appeal (AT) (Insolvency) No. 794 of 2018 dated

12.03.2019 placed reliance on the principle laid down by the Hon'ble Supreme

Court in 'Swiss Ribbons Pvt. Ltd. and Ors.' (Supra) and has set aside the

Admission Order under Section 9 passed by the Adjudicating Authority,

holding that the parties agreed to a settlement prior to the Constitution of the

CoC. Though this Judgement was rendered prior to the amendment, the scope

& intent of the Code is clear. It is pertinent to mention that the Hon'ble

Supreme Court in Civil Appeal No. 1778 of 2020 has dismissed the Appeal

confirming the Order passed by this Tribunal in 'Ashok Kumar Tibrewala'

Vs. 'Diamond Steel Enterprise & Ors.'.

31. This Tribunal in 'Vishal Gupta' Vs. 'M/s. Anav Construction & Anr.'

in Company Appeal (AT) (Insolvency) No. 1016 of 2019 dated 23.01.2020,

in pursuant to the settlement between the parties, exercised power conferred

by Rule 11 of NCLAT Rules, 2016 and set aside the Admission Order under

Section 9 of the Code.

32. In 'Mr. Vivek Verma' Vs. 'M/s. IRPO Sugar Engineering Pvt. Ltd.', in

Company Appeal (AT) (Insolvency) 967 of 2019 dated 16.10.2019, a three

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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Member Bench of this Tribunal allowed the Appeal preferred by the

Suspended Director of the 'Corporate Debtor', exercising powers under Rule

11 and observed as follows:-

'4. As per the Terms of Settlement, both the parties agreed to share the cost and fee of the 'Interim Resolution Professional'. Learned Counsel for the parties state that cost and fee of 'Interim Resolution Professional' has already been paid, which is also accepted by the Learned Counsel appearing on behalf of the 'Interim Resolution Professional'.

5. In the facts and circumstances and in exercise of inherent powers conferred upon this Appellate Tribunal under Rule 11 of the NCLAT Rules 2016, we accept the Terms of Settlement and set aside the impugned order dated 3rd September, 2019 and release the 'Corporate Debtor' from rigour of 'Corporate Insolvency Resolution Process'. The 'Interim Resolution Professional' will handover the assets and records to the 'Corporate Debtor'/'Promoter'.

33. In another occasion, a three Member Bench of this Tribunal in

'Gajendra Sharma' Vs. 'M/s. Dinesh Sanitary Store and Anr.' Company

Appeal (AT) (Insolvency) No. 119 of 2020 decided on 03.02.2020 has held

as follows:-

'5. Although the CoC got constituted on 21.01.2020, when the matter had come up before this Tribunal on 23.01.2010, the fact of prior settlement was brought to the notice of this Tribunal. It appears that Financial Creditor Prema Gupta has filed Intervention Application and filed claim with the IRP. We are disposing the present Appeal on the basis of the compromise referred. It will be open to the Financial Creditor Prema Gupta to initiate proceedings of her own.

6. In view of the settlement reached before formation of CoC between the parties, in exercise of powers

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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conferred under Rule-11 of NCLAT Rules, 2016, we set aside the Impugned Order dated 04.1.2020 whereby 'Corporate Insolvency Resolution Process' was initiated against Krishna Estate Developers Private Limited (Corporate Debtor) and the Application under Section 9 IBC filed by M/s Dinesh Sanitary Store stands disposed of as withdrawn.'

(Emphasis Supplied)

34. This Tribunal has consistently exercised powers conferred under Rule

11 on a case-to-case basis in view of the settlement reached prior to formation

of CoC. Subsequent to the Amendment i.e. 25.07.2019 this Tribunal had the

occasion of exercising Rule 11 in the following matters:-

 'Janak Dhawan' Vs. 'Famous Innovations Digital Creative Pvt. Ltd.

& Ors.' in Company Appeal (AT) (Insolvency) in 769 of 2019 dated

20.12.2019.

 'Gouri Prasad Goenka' Vs. 'Surender Kumar Agarwal & Anr.' in

Company Appeal (AT) (Insolvency) No. 105 of 2020 dated

30.01.2020.

 A three Member Bench of this Tribunal in 'Sunil Tandon' Vs.

'Manoj Kumar Anand, I.R.P & Ors.' Company Appeal (AT)

(Insolvency) No. 283 of 2019 based on the ratio in 'Swiss

Ribbons Pvt. Ltd. and Ors.' (Supra) and keeping in view that the

settlement has been reached between the parties prior to the

Constitution of CoC did not entertain the Intervention

Applications filed on behalf of the Financial Creditor. I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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35. The Judgements relied upon by the Learned Counsel appearing for

the Intervention Applicant FHRAI 1094 of 2021 and other Applicants are

not applicable to the facts of this case for the following reasons:-

 In 'Sh. Sushil Ansal' (Supra) and 'Bhaskar Biswas' (Supra) the

settlement was between an Allottee i.e. a Home Buyer and the

'Corporate Debtor' i.e. a Developer. This Tribunal has used its discretion

in not exercising its inherent powers under Rule 11 as the facts of those

cases related to Financial Creditors (Home Buyers) and a private

settlement with any one Home Buyer is necessarily intertwined with the

interests of other Home Buyers and also with the entire Tower/Project. Likewise, 'Hadi Mohd. Taher Badri' (Supra) and 'Chitra Sharma'

(Supra) too are matters where Home Buyers are the Financial Creditors

and this Tribunal has dealt with these matters as a case-to-case basis,

keeping in view the ratio of 'Swiss Ribbons Pvt. Ltd. and Ors.' (Supra)

wherein the Hon'ble Supreme Court has observed that the discretion to

allow or disallow lies with the Tribunal.

 The ratio of 'Jai Kishan Gupta' (Supra) is also not applicable to the

facts of the attendant case as CoC was already constituted prior to the

second Order of Adjudicating Authority having been passed, and this

Tribunal took note of the developments, the conduct of the 'Corporate

Debtor', recorded by the IRP in the Minutes of the first CoC Meeting and

dismissed the Appeal preferred by the Director of this 'Corporate

Debtor'.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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 The Intervenor Applicants in IA Nos. 1084, 1085, 1116 of 2021 have

relied on the decision of this Tribunal in 'Mother Pride Dairy India

Pvt. Ltd.' (Supra) which is not relevant today as the said decision is

dated 28.07.2017 and precedes the inclusion of Section 12-A under the

Code and the decision of the Hon'ble Supreme Court in 'Swiss Ribbons

Pvt. Ltd. and Ors.' (Supra) dated 25.01.2019 and also precedes the

insertion of Regulation 30-A in the Regulations dated 25.07.2019.  The Counsel for the Intervenor Applicants have also relied on the

Judgement of this Tribunal in 'Mr. K.C. Sanjeev' Vs. 'Mr. Easwara

Pillai Kesavan Nair & Ors.' in Company Appeal (AT) (Insolvency)

No. 1427 of 2019 dated 28.02.2020, which is also not applicable to

the facts of this case for the fundamental reason that CoC was already

constituted and Section 12-A comes into play.

36. Applicability of Regulation 30-A(1)(a) of the Insolvency and Bankruptcy

Board of India (Insolvency Resolution Process for Corporate Process)

Regulation, 2016 to the facts of this case:-

37. We note that in exercise of the Appellate jurisdiction, we are bound to

consider any change in law affecting the question involved in the Appeal and

which was effected subsequent to the decision of 'Swiss Ribbons Pvt. Ltd.

and Ors.' (Supra). For better understanding of the case, Section 12-A is

reproduced as hereunder:-

'1[12-A. Withdrawal of Application admitted under section 7, 9 or 10. -

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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The Adjudicating Authority may allow the withdrawal or application admitted under section 7 or section 9 or section 10, on an application made by the applicant with the approval of ninety per cent. voting share of the committee of creditors, in such manner as may be specified.]'

38. Regulation 30-A was amended by inserting clause(a) in sub-Regulation

1 of Regulation 30-A effective from 25.07.2019. Form FA has also been

amended in conformity with Regulation 30-A. The amended Regulation 30-A

is reproduced as hereunder:-

"30A. Withdrawal of Application (1) An application for withdrawal under section 12A may be made to the Adjudicating Authority-

(a) before the constitution of the committee, by the applicant through the interim resolution professional;

(b) after the constitution of the committee, by the applicant through the interim resolution professional or the resolution professional, as the case may be: Provided that where the application is made under clause (b) after the issue of invitation for expression of interest under regulation 36A, the applicant shall state the reasons justifying withdrawal after issue of such invitation.

(2) The application under sub-regulation (1) shall be made in Form FA of the Schedule accompanied by a bank guarantee- (a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the application under clause (a) of sub-

regulation (1); or (b) towards estimated expenses incurred for purposes of clauses (aa), (ab), (c) and (d) of regulation 31, till the date of filing of the application under clause (b) of sub- regulation (1).

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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(3) Where an application for withdrawal is under clause (a) of sub-regulation (1), the interim resolution professional shall submit the application to the Adjudicating Authority on behalf of the applicant, within three days of its receipt.

(4) Where an application for withdrawal is under clause (b) of sub-regulation (1), the committee shall consider the application, within seven days of its receipt.

(5) Where the application referred to in sub- regulation (4) is approved by the committee with ninety percent voting share, the resolution professional shall submit such application along with the approval of the committee, to the Adjudicating Authority on behalf of the applicant, within three days of such approval.

(6) The Adjudicating Authority may, by order, approve the application submitted under sub- regulation (3) or (5).

(7) Where the application is approved under sub- regulation (6), the applicant shall deposit an amount, towards the actual expenses incurred for the purposes referred to in clause (a) or clause (b) of sub-regulation (2) till the date of approval by the Adjudicating Authority, as determined by the interim resolution professional or resolution professional, as the case may be, within three days of such approval, in the bank account of the corporate debtor, failing which the bank guarantee received under sub-regulation (2) shall be invoked, without prejudice to any other action permissible against the applicant under the Code."

(Emphasis Supplied)

39. Form FA dated 25.07.2019 reads thus:-

FORM FA

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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APPLICATION FOR WITHDRAWAL OF CORPORATE INSOLVENCY RESOLUTION PROCESS [Under Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016]

[Date]

To The Adjudicating Authority

[Through the Interim Resolution Professional/Resolution Professional] [name of corporate debtor]

Subject: Withdrawal of Application admitted for corporate insolvency resolution process of [name of corporate debtor]

I, [Name of applicant], had filed an application bearing [particulars of application, i.e., diary number/case number] on [Date of filing] before the Adjudicating Authority under [Section7/Section 9/Section 10] of the Insolvency and Bankruptcy Code, 2016. The said application was admitted by the Adjudicating Authority on [date] bearing [case number].

2. I hereby withdraw the application bearing [particulars of application, i.e., diary number/case number] filed by me before the Adjudicating Authority under [Section 7/Section 9/Section 10] of the Insolvency and Bankruptcy Code, 2016.

3. I attach the required bank guarantee as per sub-

regulation (2) of regulation 30A.

(Signature of the applicant) Date:

Place:

[Note: In the case of company or limited liability partnership, the declaration and verification shall be made by the director/manager/secretary/designated partner and in the case of other entities, an officer authorized for the purpose by the entity]

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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40. Section 12-A read together with amended Regulation 30-A effective from

25.07.2019 provides that stage of pre-Constitution of CoC which is now

covered in Regulation 30-A(1)(a). It is evident that Section 12-A deals with the

situation of Withdrawal of Application admitted under Sections 7, 9 or 10, on

an Application made by the Applicant with the approval of 90% voting share of

the Committee of Creditors, in such manner as may be specified', meaning

thereby that Section 12-A refers to a situation Post Constitution of CoC,

whereas Regulation 30-A(1)(a) deals with procedure to be followed Pre-

Constitution of CoC. It is stated by the Learned Sr. Counsel that the language

of the Section, whereunder IBBI has been empowered to frame Regulations is

clear that the said Regulation should be consistent with the I&B Code. We

refrain from making any such observations. The Apex Court clarified in

'Brilliant Alloys Pvt. Ltd.' Vs. 'Mr. S. Rajagopal & Ors.', SLP (Civil) No.

31557/2018 dated 14.12.2018 that Regulation 30-A is not mandatory but is

directory for the simple reason that on the facts of a given case, an Application

for withdrawal may be allowed in exceptional cases even after issuing the

invitation for expression of interest under Regulation 36-A.

41. Rule 11 of NCLAT Rules, 2016 provides that 'Nothing in these rules shall

be deemed to limit or otherwise affect the inherent powers of the Appellate

Tribunal to make such orders as may be necessary for meeting the ends of

justice or to prevent abuse of the process of the Appellate Tribunal.' The Hon'ble

Apex Court in 'Swiss Ribbons Pvt. Ltd. and Ors.' (Supra) has clearly

discussed the stage and has observed that 'we make it clear that at any stage

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -40-

where the Committee of Creditors is not yet constituted, a party can approach

NCLT directly, which Tribunal may, in exercise of its inherent powers under

Rule 11 of NCLT Rules, 2016, allow or disallow an application for withdrawal

or settlement. This will be decided after hearing all the parties concerned and

considering all relevant factors on the facts of each case'. It is a well settled

proposition of law that substantive law takes precedence over a Regulation

and Section 12-A clearly refers to withdrawal of an Application under Section

7, 9 or 10 after the Constitution of the Committee of Creditors, seeking

approval of 90% of the voting share of the CoC. Keeping in view the ratio of

the Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. and Ors.' (Supra)

and the aforenoted reason, we hold that in the facts and circumstances of the

attendant case before us, we do not find force in the contention of the

proposed Intervenor Applicants that the Application for Withdrawal, filed,

prior to Constitution of CoC ought to be mandatorily dealt with the provisions

under the Regulation 30-A(1)(a). We find it just and proper to exercise our

inherent powers under Rule 11 in this case.

42. It is relevant to note that in the list of claims, totaling to 113, filed

by the IRP, 110 are 'Operational Creditors'. The claims of two Financial

Creditors' have been rejected.

43. It is also pertinent to mention that all the Intervenors/Applicants before

us have filed the aforenoted IA Nos. 941, 956, 957, 1082, 1083, 1084, 1085,

1086, 1094, 1116 of 2021 and Diary Nos. 27487 & 27488, in their capacity

as 'Operational Creditors'. It is also not out of place to mention that the

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

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Intervenors/Applicants in IA No. 1083 of 2021, Ghai Hotel Investments

Company Pvt. Ltd. have invoked the Arbitration clause and approached the

Hon'ble High Court of Bombay. Further, Monish Investment Pvt. Ltd. who is

the Intervenor/Applicant in IA No. 1082 of 2021 has also invoked Arbitration

clause and approached the Hon'ble High Court of Bombay by way of a Petition

which is pending Adjudication before the Hon'ble High Court.

44. The Applicants in and Diary Nos. 27487 & 27488 have also invoked

Arbitration Proceedings and a sole Arbitrator has been appointed by the

Hon'ble High Court of Delhi in OMP(I)212/2021.

45. It is not the case of the Intervenors that Demand Notice under Section

8 is pending. It is only their case that money is due. We are of the considered

view that before Constitution of Committee of Creditors mere filing of a 'Claim'

does not constitute default per se. It is only on the basis of the 'Claims' that

the CoC is constituted. In a catena of Judgements the Hon'ble Supreme Court

has reiterated that the prime objective of the Court is not recovery, but revival.

This Tribunal in numerous Judgements cited in the aforenoted paras, has

observed that after 'Admission', this Tribunal, on a case to case basis can

exercise its inherent power under Rule 11 if parties are interested to settle the

matter prior to Constitution of CoC. To reiterate, we are of the view that in

the interest of Justice, the inherent powers under Rule 11 can be exercised

by both NCLT and NCLAT which may allow or disallow the Application of

Withdrawal keeping in view the interest of the concerned parties and the facts

of each case.

I.A. No. 815 of 2021

in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -42-

46. The communication filed by the operational Creditors evidences that all

amounts due and payable by the Corporate Debtor to the Operational

Creditor, who filed the Section 9 Application, have been paid in full and final

satisfaction, to the parties concerned in that Application, together with the

IRP Costs. Keeping in view the ongoing discussions, the aforenoted

Judgements, the ratio of 'Swiss Ribbons Pvt. Ltd. and Ors.' (Supra), the

facts of the attendant case, we allow the Application of Withdrawal in exercise

of inherent powers under Rule 11. We note that Regulation 30-A(1)(a) is not

applicable to the present Application. The Intervenor Applications filed during

the pendency of the Appeal, prior to the Constitution of CoC, are disallowed.

47. For all the aforenoted reasons, the Proposed Intervention Application

Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094, 1116 of 2021 and

Diary Nos. 27487 & 27488 are dismissed. IA 815 of 2021 is allowed,

consequently Company Appeal (AT) (Insolvency) 298 of 2021 is allowed and we

set aside the Impugned Order dated 30.03.2021. In effect, Order(s) passed by

Ld. Adjudicating Authority appointing 'Interim Resolution Professional',

declaring moratorium, freezing of account and all other Order(s) passed by

Adjudicating Authority pursuant to the Impugned Order, are set aside. The

Adjudicating Authority will now close the proceedings. The 2nd Respondent

Company is released from all the rigours of law and is allowed to function

independently through its Board of Directors with immediate effect.

48. This Order will not come in the way of any Financial/Operational

Creditors to move an Application for CIRP before the Learned Adjudicating

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021 -43-

Authority, Which shall hear the matter, uninfluenced by observations, if any,

made in this Judgement and proceed in accordance with law.

49. Needless to add, having regard to the fact that the Hospitality and the

Tourism Industry has been bruised in this Pandemic, with travel being

significantly curtailed, it is also open to the Creditors to approach the

'Corporate Debtor' for settlement and the 'Corporate Debtor' may choose to

settle the same, if so advised.

50. In the result, Proposed Intervention Application Nos. 941, 956, 957,

1082, 1083, 1084, 1085, 1086, 1094, 1116 of 2021 and Diary Nos. 27487 &

27488 are dismissed. IA 815 of 2021 is allowed. Consequently, the Appeal is

allowed with the aforenoted directions.

[Justice Anant Bijay Singh] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical)

NEW DELHI 07th July, 2021

ha

I.A. No. 815 of 2021 in Company Appeal (AT) (Insolvency) No. 298 of 2021 With I.A. Nos. 941, 956, 957, 1082, 1083, 1084, 1085, 1086, 1094 & 1116 of 2021 and Diary Nos. 27487 & 27488 dtd.

23.06.2021