Daiyan Ahmed Azmi vs Rekha Kantilal Shah, Liquidator & Ors

Daiyan Ahmed Azmi ...Appellant

Vs.

Rekha Kantilal Shah, Liquidator & Ors. ...Respondents

Present: For Appellant: - Mr. Davesh Bhatia, Advocate.

For Respondents: - Ms. Rekha Shah, Liquidator and Mr. Premtosh Mishra, Advocate.

O R D E R

21.05.2019─ This appeal has been preferred by Daiyan Ahmed

Azmi, promoter of 'Leo Duct Engineers & Consultants Ltd.'- ('Corporate

Debtor') against the order dated 8th March, 2019 passed by the

Adjudicating Authority (National Company Law Tribunal), Mumbai

Bench, Mumbai, whereby an application under Section 60(5)(c) of the

Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short) filed by the

'Resolution Professional' for exclusion of certain periods has not been

allowed and in effect passed the order of liquidation against the

'Corporate Debtor'.

2. Learned counsel appearing on behalf of the Appellant submitted

that the period from 14th November, 2018 to 11th January, 2019 should

have been excluded for the purpose of counting 270 days. If the said

period would have been excluded, the 'Committee of Creditors' could have 2

considered the application under Section 12A of the 'I&B Code' filed by

the Appellant.

3. It is informed that 90% of the shareholders of the 'Financial

Creditor' have already intimated the Adjudicating Authority that they are

considering the matter and in spite of the same, the Adjudicating

Authority has rejected the prayer for extension, which resulted in order

for liquidation.

4. Learned counsel appearing on behalf of 'Liquidator'/ subsequent

'Resolution Professional' accepted that the application for exclusion was

filed by the 'Resolution Professional' and prayer of such exclusion was

made as licence of the erstwhile 'Resolution Professional' was cancelled.

However, in spite of the same, the Adjudicating Authority asked the

erstwhile 'Resolution Professional' to continue for a period of three weeks

and to ensure that the 'Corporate Debtor' remains a going concern.

5. However, other steps were not taken by the erstwhile 'Resolution

Professional' and the present 'Liquidator' joined as the 'Resolution

Professional' on 3rd January, 2019 but having received the order on 11th

January, 2019 and started functioning.

6. According to her, even if 21 days is excluded, there should have

been an exclusion of about 82 days and in such case, the application

under Section 12A of the 'I&B Code' could have been produced before the

'Committee of Creditors'.

Company Appeal (AT) (Insolvency) No. 271 of 2019 3

7. Taking into consideration the stand taken by the parties including

the 'Resolution Professional', we are of the view that the Adjudicating

Authority should have allowed the intervening period i.e. the period when

erstwhile 'Resolution Professional' Mr. Martin S.K. Golla stopped

functioning i.e. from 8th December, 2019 to 11th January, 2019 till the

subsequent 'Resolution Professional' (present Liquidator) took charge to

place the application under Section 12A before the 'Committee of

Creditors'.

8. For the reasons aforesaid, we set aside the impugned order dated

8th March, 2019 including the order of liquidation and exclude 35 days

from the date of receipt of this order by the 'Resolution Professional' for

the purpose of counting the period of 270 days so as to ensure 'Successful

Resolution Process' in terms of Section 12A.

9. Ms. Rekha Sha, the 'Resolution Professional' who is present in the

Court is directed to conduct immediately the meeting of the 'Committee

of Creditors' and place the application under Section 12A before it and if

it is accepted with 90% of the voting share of the 'Financial Creditor', the

Adjudicating Authority will allow the applicant to withdraw the

application under Section 10. All processes should be completed within

30 days and matter should be placed before the Adjudicating Authority.

If the 'Committee of Creditors' do not accept the application in terms of

Section 12A with 90% voting shares, then only the Adjudicating Authority

will pass order for liquidation and direct the Liquidator to act in terms of

Company Appeal (AT) (Insolvency) No. 271 of 2019 4

decision of this Appellate Tribunal in "Y. Shivram Prasad Vs. S.

Dhanapal & Ors.─ Company Appeal (AT) (Insolvency) No. 224 of

2018".

10. The appeal is accordingly allowed with aforesaid observations and

directions.

Registry to serve free copy of this order on the 'Resolution

Professional' immediately.

(Justice S.J. Mukhopadhaya) Chairperson

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

(Kanthi Narahari) Member(Technical) Ar/g

Company Appeal (AT) (Insolvency) No. 271 of 2019