Bkfc & Co vs M/S Transparent Energy System Pvt. Ltd. ...

Company Appeal (AT)(Insolvency) No. 572 of 2021 [Arising out of Order dated 16th April, 2021 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench-I, Mumbai) in Company Petition (IB) No. 3448/MB/2018] IN THE MATTER OF: BKFC & Co. A proprietorship Firm Through its Proprietor Mr. JVS Rathi Having its office at: House No. 10, Block H-1 Street No.5, New Palam Vihar Gurgaon, Haryana ...Appellant Versus 1. M/s Transparent Energy System Pvt. Ltd. Through its Authorised Representative Having its office at: Plot No. T-145/146/147, M.I.D.C. Bohosari, Pune - 411026 ...Respondent No.1 2. Mr. Vijendra Kumar Jain Resolution Professional Having its office at: 1507, B Wing, One BKC, G-Block, BKC, Bandra East Mumbai - 400051 ...Respondent No.2 Present: For Appellant : Mr. L.B. Rai and Mr. Kartik Rai, Advocates For Respondents : Mr. Aatreya Singh, Advocate for R-1 Ms. Udita Singh, Advocate for R-2

KANTHI NARAHARI, MEMBER (TECHNICAL)

Preamble:

The Present Appeal is filed against the Order dated 16th April, 2021

passed by the Adjudicating Authority (National Company Law Tribunal,

Company Appeal (AT) (Ins.) No. 572 of 2021 1 of 12 Mumbai Bench-I, Mumbai) in I.A. No. 07/MB/2021 in Company Petition (IB)

No.3448/MB/2018, whereby the Adjudicating Authority approved the

Resolution Plan submitted by the Successful Resolution Applicant (in short

'SRA').

Brief Facts:

Appellant's Submissions:

2. The Learned Counsel for the Appellant submitted that the impugned

order dated 16.04.2021 was passed by the Adjudicating Authority in an

application filed by the Resolution Professional under Section 30(6) of the I&B

Code, 2016 seeking approval of Resolution Plan. The Adjudicating Authority

after considering the application allowed by approving the resolution plan

submitted by Mr. Ashok Atre, the SRA.

3. The Learned Counsel for the Appellant submitted that the Appellant is

aggrieved by the impugned order on the ground that the claim of the Appellant

has not been considered by the RP and the RP included the Appellant in

Category 'L' and has agreed to pay only 2% i.e. Rs.46,595/- of the admitted

claim of Rs.23,29,773/-.

4. It is submitted that the Appellant has initiated arbitration proceeding

against the Corporate Debtor for recovery of Rs. 1,33,62,369/- and the said

arbitration proceeding is at the stage of cross examination of Respondent's

witnesses.

5. While so, the Corporate Debtor was admitted and CIRP Proceedings was

initiated and IRP was appointed on 08.03.2019. The IRP issued a public

Company Appeal (AT) (Ins.) No. 572 of 2021 2 of 12 announcement in Form 'A' and invited all the creditors to submit their claims.

The Appellant submitted its claim along with its documents to the IRP vide e-

mail dated 21.04.2019 as per the information provided in the public

announcement. The Appellant did not receive any response from the IRP,

therefore, the Appellant has addressed a letter dated 29.08.2019 to the IRP

about the status of its claim. The IRP vide his mail dated 10.09.2019 stated

that he is no more continuing as IRP and one Mr. Nimit Kalsi has been

appointed as the RP.

6. The Appellant again addressed a letter to the RP regarding its claim.

The RP sent a mail dated 22.05.2020 to the Appellant stating that the claim

has been duly received and still pending for admission. The Appellant also

sent a mail dated 11.02.2021 to the RP for inclusion the name of the Appellant

in the list of Operational Creditors. The RP vide his letter dated 30.04.2021

informed the Appellant that the Resolution Plan has been approved by the

Adjudicating Authority vide impugned order dated 16.04.2021. Further, the

RP informed that the Appellant has not filed any claim, however, the

Resolution Applicant in good faith dealt with the dues of the Appellant on the

basis of books of accounts and observed that a credit balance of Rs.23.29 lacs

is reflected and an amount of Rs.46,595/- was provided towards settlement

of dues.

7. It is submitted that the RP failed to appreciate to examine the books of

accounts and other documents of the Corporate Debtor for the purpose of

determining the liability, however, included the Appellant in Category 'L' and

has agreed to pay only 2% of the admitted claim of Rs.23,29,773/- which

Company Appeal (AT) (Ins.) No. 572 of 2021 3 of 12 comes to Rs. 46,595/- whereas the other creditors included in Category 'K'

are being fully paid. Sub-para XV of para 7 at page 16 of the Appeal paper

book, it is stated that "it is pertinent to mention that both the creditors

mentioned in Category 'K" and "L" have not filed their claim before the IRP or

RP.

8. Further, the Learned Counsel submitted that Learned Adjudicating

Authority has not considered that the books of accounts and other documents

of the Corporate Debtor have not properly examined, to say that the architect

of the Corporate Debtor had approved the bills of the Appellants for Rs.85 lacs

and the claim of the Appellant is for Rs.1.72 crores.

9. In view of the reasons as stated above the Learned Counsel prayed this

Bench to allow the Appeal.

1st Respondent's Submissions:

10. The Learned Counsel appearing for the 1st Respondent in rebuttal

submitted that the Appellant had filed an application being M.A. No.

3228/2019 before the Adjudicating Authority seeking its impleadment as an

Operational Creditor in the Insolvency proceedings. The Adjudicating

Authority vide its order dated 25.11.2019 dismissed the said application and

directed the Appellant to approach the RP. However, the Appellant did not

comply the said directions. The RP i.e. 2nd Respondent herein, while finalizing

the Information Memorandum for the Corporate Debtor observed that the

claim of the Appellant was not on the record and therefore, he sent an e-mail

to the Appellant on 22.05.2020 to file its claim and also sent a reminder to

the Appellant vide an e-mail dated 25.05.2020. However, the Appellant did

Company Appeal (AT) (Ins.) No. 572 of 2021 4 of 12 not file any claim with the 2nd Respondent in accordance with the procedure

laid down in the Code. Therefore, the name of the Appellant included in the

list of creditors who did not file their claims and the said list was part of the

Information Memorandum. It is also mentioned regarding the pending

arbitration proceedings between the Appellant and the Corporate Debtor.

11. Despite, the pending claims and counter claims between the parties,

the claim of the Appellant was dealt with in the Resolution Plan on the basis

of books of accounts of the Corporate Debtor in a good faith to put a quietus

to the disputes between the parties and proposed to pay an amount of

Rs.46,596/-.

12. In view of the reasons as stated above, it is submitted that the Appellant

has not made out any case, either on facts or on law, accordingly, requested

the Bench to dismiss the Appeal being devoid of any merits.

2nd Respondent's Submissions

13. The Learned Counsel appearing for the 2nd Respondent submitted that

the RP filed an application being I.A. No. 7/2021 in CP (IB) No. 3448/2018

before the Adjudicating Authority, NCLT, Mumbai Bench seeking approval of

Resolution Plan and the Adjudicating Authority allowed the application by

approving the Resolution Plan vide order dated 16.04.2021.

14. It is submitted that the CIRP commenced against the Corporate Debtor

by an order dated 08.03.2019 by the Adjudicating Authority, NCLT, Mumbai

Bench. Thereafter, the IRP received the claims from the Financial Creditors,

Operational Creditors and claims from employees and workmen of the

Company Appeal (AT) (Ins.) No. 572 of 2021 5 of 12 Corporate Debtor. The IRP conducted the meetings of Committee of Creditors

from time to time. It is not in dispute that the Appellant initiated the

arbitration proceedings against the Corporate Debtor for recovery of claim of

Rs.1,33,62,369/- and the Corporate Debtor contested the said arbitration

proceedings. In view of moratorium imposed by order dated 08.03.2019 by

the Adjudicating Authority, a bar was imposed on the arbitration proceedings

and the Appellant was asked to file its claim before the IRP. The IRP vide its

e-mail dated 10.09.2019 addressed to the Appellant suggested to get in touch

with the IRP to enquire about the status of its claim with new IRP, since the

earlier IRP set to replace the new IRP as per the decision of CoC.

15. The Appellant did not follow the suggestions made by the IRP, however,

filed MA. No. 3228/2019 seeking impleadment as an Operational Creditor.

However, the said MA was dismissed on 25.11.2019. The IRP vide e-mail dated

22.05.2020 informed the Appellant that as per the list of claims submitted to

him by the previous RP, the claim of the Appellant was not shown in the list

of admitted claims and its claim was still pending consideration. In the same

e-mail the IRP specifically, asked the Appellant to re-submit its claim in Form

'B' along with their relevant documents and requested to do so urgently.

However, the Appellant failed to provide requisite claim form along with

documents, the IRP could not process and include the claim of the appellant

in the Information Memorandum.

16. Further, the IRP again sent an e-mail dated 25.05.2020 stating that he

had not received the claim form from the Appellant and requested to submit

Company Appeal (AT) (Ins.) No. 572 of 2021 6 of 12 again. In spite of reminders the Appellants failed to submit its claim form with

the IRP.

17. It is submitted that it is the duty of the IRP to check and ensure that

the Resolution Plan falls within the ambit of and satisfies the provisions of

Section 30(2) of the Code, 2016. Once, the said criteria is satisfied, it is for

the CoC to take a decision and the IRP does not have any role. While so, in

the present case, the CoC passed the Resolution Plan with 100% voting share.

18. In view of the reasons as stated above the Learned Counsel prayed this

Bench to dismiss the Appeal.

Analysis / Appraisal:

19. Heard the Learned Counsel appeared for the respective parties, perused

the pleadings and documents filed in their support. After hearing the parties,

this Tribunal intend to examine, whether the Appellant has made out any

prima-facie case to grant/allow the Appeal as prayed for.

20. The grievance of the Appellant is that its claim has not been considered

and only a sum of Rs.46,595/- has been provided in the plan. The Appellant

though aggrieved by the order dated 16.04.2021 whereby the Adjudicating

Authority approved the Resolution Plan of the Successful Resolution

Applicant upon an application filed by the IRP under Section 30(6) of the I&B

Code, 2016. However, the Appellant sought an order / direction in this Appeal

to consider its claim.

21. The Corporate Debtor admitted in to CIRP by order dated 08.03.2019

and the IRP made a public announcement on 09.03.2019 inviting claims from

Company Appeal (AT) (Ins.) No. 572 of 2021 7 of 12 the creditors of the Corporate Debtor. After receipt of claims the IRP

constituted Committee of Creditors on 01.04.2019 and conducted its first

meeting of the CoC on 08.04.2019. The Appellant contended that it has

submitted its claim on 16.04.2019 to the then IRP claiming an amount of

Rs.1,81,72,824/-. Further, it is contended that the Appellant addressed a

letter dated 29.08.2019 to the then IRP viz. Mr. Ashish Vyas regarding the

status of the claim filed by it. On the other hand, the IRP vis. Mr. Ashish Vyas

vide its e-mail dated 11.09.2019 addressed to the Appellant stating that the

details of claims were uploaded at the website of the Corporate Debtor,

http://www.tespl.com/creditors-List.pdf. Further, it is stated that the NCLT

has appointed Mr. Nimit Kalsi as Resolution Professional and he had handed

over entire record to Mr. Nimit Kalsi and advised the Appellant to get in touch

with him directly about its claim. Further, it appears that the Adjudicating

Authority replaced the IRP and appointed Mr. Vijendra Kumar Jain as

Resolution Professional replacing Mr. Nimit Kalsi by order dated 21.02.2020

in respect of Corporate Debtor. The Appellant vide its letter dated 11.02.2021

addressed a letter to the newly appointed IRP i.e. Mr. Vijendra Kumar Jain

requesting the IRP to include the claim of the Appellant in list of Operational

Creditors its claim of Rs.1,50,00,000/-. In reply the newly appointed IRP i.e.

Mr. Vijendra Kumar Jain vide its e-mail dated 12.02.2021 addressed to the

Appellant stating that on verification from the records of the Corporate

Debtor, the claim of the Appellant is pending for consideration and requested

the Appellant to submit the claim in Form-B along with relevant documents

for the purpose of acceptance of the claim of the Appellant and requested the

Appellant to submit the claim immediately.

Company Appeal (AT) (Ins.) No. 572 of 2021 8 of 12

22. From the records it appears that the Appellant has not submitted its

claim as requested by the IRP vide its e-mail dated 12.02.2021. However, the

IRP vide its letter dated 30.04.2021 addressed to the Appellant stated that the

Hon'ble Adjudicating Authority has approved the Resolution Plan in respect

of the Corporate Debtor by an order dated 16.04.2021 and stated that the

claim of the Appellant has been settled by providing a sum of Rs.46,595/- in

the plan at column-6 of the plan. The copy of the approved Resolution Plan

dated 14.08.2020 has been filed along with the appeal paper book. At page

90, the claim of the Appellant has been discussed whereas it is stated that

the Appellant is the civil contractor for construction of the Corporate Debtor

factory, and has invoked arbitration proceedings for recovery of Rs.172.59

lakhs and the dispute is non payment of dues for the execution of work.

Further, it is stated that the corporate Debtor filed counter claims of Rs.30

lakhs on account of incomplete work by the Appellant. It is also stated that

the books of account of the Corporate Debtor have a credit balance of Rs.23.29

lakhs against the Appellant.

23. It is an admitted fact that the Appellant filed an application bearing No.

3228 of 2019 seeking inclusion its claim as an Operational Creditor, before

the Adjudicating Authority in September, 2019. However, the Adjudicating

Authority dismissed the said application on 25.11.2019 with a direction to

approach the RP. While so, despite the request by the IRP for submission of

claim in Form-B with proof, the Appellant has not submitted its claim as

evident from the documents. Thus, in the Resolution Plan the Operational

Creditor who have not filed their claims categorised as 'L' i.e. other creditors.

Company Appeal (AT) (Ins.) No. 572 of 2021 9 of 12 Under the said category total admitted claims are Rs. 172.68 and the

proposed amount to be paid is Rs.3.45 lakhs.

Finding:

24. Admittedly, the application filed by the Resolution Professional under

Section 30(6) of the I&B Code, 2016 seeking approval of the Adjudicating

Authority. The Adjudicating Authority after satisfying that the plan is

incompliance of sub-section (2) of Section 30 and meets the requirement and

as approved by the Committee of Creditors under sub-section (4) of Section

30. If the above, compliance is met, the Adjudicating Authority shall by order

approve the Resolution Plan which shall be binding on the Corporate Debtor

and its employees, members, creditors, (including the Central Government,

any State Government or any local authority to whom a debt in respect of the

payment of dues arising under any law for the time being in force, such as

authorities to whom statutory dues are owed,) guarantors and other

stakeholders involved in the Resolution Plan.

25. The Adjudicating Authority in the impugned order has specifically

stated that the plan is in compliance of Regulation 38 of the IBBI (Insolvency

Resolution Process for Corporate Persons) Regulations, 2016 and in terms of

Section 30(2)(f) of the Code. It is also specifically stated that the Resolution

Plan has been approved by 100% voting share of the CoC and the same is

incompliance of Regulation 38(1)(b) of the IBBI (Insolvency Resolution Process

for Corporate Persons) Regulations, 2016.

Company Appeal (AT) (Ins.) No. 572 of 2021 10 of 12

26. Once the plan has been approved by the CoC and by the Adjudicating

Authority it binds upon the creditors and other stakeholders as per Section

30(1) of the Code.

27. From the documents, it is evident that the RP vide its letter dated

22.05.2020 requested the Appellant to submit the claim in Form-B and also

sent a reminder dated 25.05.2020 to the Appellant whereby it is stated that

the RP has not received the claim with documents for verification and

acceptance of claim. Despite the above request the Appellant has not filed its

claim in Form-B with proof as required under Regulation 12(1) & (2) of the

IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016,

which read as under:

"12. Submission of proof of claims. -

(1) Subject to sub-regulation (2), a creditor shall submit [claim with proof] on or before the last date mentioned in the public announcement.

[(2) A creditor, who fails to submit claim with proof within the time stipulated in the public announcement, may submit the claim with proof to the interim resolution professional or the resolution professional, as the case may be, on or before the ninetieth day of the insolvency commencement date.]"

28. The said amendment has substituted by notification dated 03.07.2018

and as per the above rules the creditor shall submit its claim with proof. The

claim of the Appellant has been settled in the plan under the category 'L' and

the plan has been approved with 100% voting share of the CoC members and

also approved by the Adjudicating Authority in compliance of Section 31 of

Company Appeal (AT) (Ins.) No. 572 of 2021 11 of 12 the I&B Code. Once the plan is approved it shall bind on the creditors and

other stakeholders.

Conclusion:

29. In view of the forgoing reasons, this Tribunal comes to an irresistible

and inescapable conclusion that the order passed by the Adjudicating

Authority in approving the Resolution Plan vide order dated 16.04.2021 is in

accordance with law and no interference is called for.

30. In fine, the Company Appeal sans merit, and the same is liable to be

dismissed. Accordingly, Company Appeal (AT) (Insolvency) No. 572 of 2021 is

dismissed. No order as to costs. Applications, if any, pending stand closed.

[Justice Anant Bijay Singh] Member (Judicial)

[Kanthi Narahari] Member (Technical) 20th October, 2022

pks

Company Appeal (AT) (Ins.) No. 572 of 2021 12 of 12