Deepak Gupta vs Mr. Rakesh Kumar Jain Liquidator Of Rg ...
- CitationCompany Appeal (AT) (Insolvency) No. 595
Ratio decidendi
The rule this decision rests on
The CIRP period under the Insolvency and Bankruptcy Code, once it has expired, cannot be extended by the Adjudicating Authority where an application seeking exclusion of the period has been rejected; with no extension available and no resolution plan received, the Resolution Professional is entitled to apply for liquidation of the Corporate Debtor, and such an application is not vitiated by any error. A resolution applicant who has not, within the time permitted and after the issuance of Form-G, expressed interest in or submitted a resolution plan, and who files a request to submit a plan only after the CIRP period has ended and more than two years after it lapsed without any demonstrated inclination to file, has no basis for seeking leave to submit a plan at that stage, and such a request is rightly rejected. Where no resolution plan has been received following two issuances of Form-G, the mere assertion by the suspended management that it wishes to revive the Corporate Debtor does not justify setting aside a liquidation order; once liquidation is ordered, the manner and mode of sale of the Corporate Debtor's assets is for the Liquidator to determine in accordance with law.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Atul Paper Pvt. Ltd. ...Appellant
Versus
Rakesh Kumar (Erstwhile RP) & Ors. ...Respondents
Present: For Appellant: Mr. Abhijeet Sinha, Mr. Kumar Anurag Singh, Mr. Zain A Khan, Advocates For Respondent: Mr. Mohit Nandwani, Advocate for R-1 Mr.Mohit Raj, Jay Kishor Singh, Advocates for R-3
With Company Appeal (AT) (Insolvency) No. 567 & 568 of 2023
IN THE MATTER OF:
Deepak Gupta ...Appellant
Versus
Rakesh Kumar Jain, ...Respondents Liquidator of RG Indra-Build Pvt. Ltd. & Anr.
Present: For Appellant: For Respondent: Mr. Mohit Nandwani, Advocate for R-1 Mr.Mohit Raj, Jay Kishor Singh, Advocates for R-3
ORDER
19.05.2023: These two Appeals have been filed against the same order
dated 16th March, 2023 passed by the Adjudicating Authority directing for
liquidation of the Corporate Debtor. Company Appeal (AT) Ins. No. 595 & 596 -2-
of 2023 has been filed by Atul Paper Pvt. Ltd. who has filed an Application
before the Adjudicating Authority being I.A. No. 44/2023 seeking a direction
that the Adjudicating Authority may permit the Appellant to submit a
Resolution Plan of the Corporate Debtor. Company Appeal (AT) Ins. No. 567 &
568 of 2023 has been filed by the Suspended Management of the Corporate
Debtor challenging the Liquidation Order passed in I.A. No. 378 of 2021.
2. Corporate Insolvency Resolution Process against the Corporate Debtor
was triggered by Order dated 25.09.2019 passed by the Adjudicating
Authority. The first Form-G was issued by the Resolution Professional inviting
Expression of Interest on 14th March, 2020 and again Form-G was issued on
19th August, 2020 inviting EoI. In pursuance of both the Form-G, no
Resolution Plan could be received hence the Application I.A. No. 378 of 2021
was filed by the Resolution Professional praying that Corporate Debtor be sent
into Liquidation. The Adjudicating Authority allowed the Application I.A. No.
378 of 2021 filed by the RP by impugned order and taken the decision to
liquidator the Corporate Debtor and appointed the Resolution Professional as
Liquidator. The Application I.A. No. 44 of 2023 filed by the Atul Paper Pvt. Ltd.
praying for liberty to submit a plan has also been rejected by the same order.
3. Mr. Abhijeet Sinha, Learned Counsel appearing for the Appellant-Atul
Paper Pvt. Ltd. submitted that Appellant ought to have been given an
opportunity to submit a Resolution Plan and the observation made in the
Order impugned regarding bona fide of the Appellant were all incorrect. It is
Company Appeal (AT) (Insolvency) No. 595-596 & 567-568/2023 -3-
submitted that Committee of Creditors is still ready to receive the plan which
information has been received by the Appellant hence the Adjudicating
Authority ought to have allowed the Appellant to submit a Resolution Plan.
4. Learned Counsel appearing for the Appellant-Deepak Gupta (Suspended
Management) submits that the management intends to revive the Corporate
Debtor and in event the Resolution Plan is offered to be submitted, the
Adjudicating Authority ought to have accepted.
5. Learned Counsel for the Liquidator has opposed both the Appeals and
submits that in the present case the CIRP came to an end on 11.09.2020 of
270 days and after 11.09.2020, the Adjudicating Authority has excluded 60
days period which took the CIRP till 10.11.2020, thereafter, an Application
was filed by the RP for exclusion of time being I.A. No. 5336 of 2020 which
was decided and rejected on 23.12.2020 and after rejection of the extension of
CIRP Period, there was no option left except to move an Application which was
filed by the Resolution Professional praying for liquidation. It is further
submitted that twice Form-G was issued but no Resolution Plan was
submitted by Atul Paper Pvt. Ltd. and the said Application was filed only in
2023 when an Application was also filed by the Resolution Professional being
I.A. No. 355 of 2021 alleging that Appellant is occupying the property of the
Corporate Debtor and direction was sought to vacate from the premises.
Thereafter, the Application has been filed in 2023 proposing plan.
Company Appeal (AT) (Insolvency) No. 595-596 & 567-568/2023 -4-
6. We have considered the submission of Learned Counsel for the parties
and have perused the record.
7. The CIRP period of 270 days came to end on 11.09.2020 and after
exclusion of 60 days came to end on 10.11.2020 and thereafter Application
I.A. No. 5336 of 2020 filed by the RP for exclusion of period during which I.A
was under consideration, has been rejected by Order dated 23.12.2020. CIRP
period came to end and no error was committed by the RP in filing Application
seeking Liquidation of the Corporate Debtor.
8. The Application filed by Atul Paper Pvt. Ltd. in 2023 that they are now
interested in submitting a plan has rightly been rejected by the Adjudicating
Authority. The case of Atul Paper Pvt. Ltd. is not that they were not aware of
the Form-G but they asked some information by the Resolution Professional,
which was not given hence they could not file the Resolution Plan. The said
submission does not merit acceptance, CIRP period came to end in September,
2020 and no steps was taken by the Atul Paper Pvt. Ltd. showing their
inclination or interest in filing the plan for more than two years. The
Application filed by Atul Paper Pvt. Ltd. was in 2023 which has rightly been
rejected by the Adjudicating Authority.
9. In so far as the submission of Suspended Management that they want
to revive the Corporate Debtor, when no Resolution Plan has been received
after issuance of Form-G twice, the submission made by Learned Counsel for
the Appellant-Suspended Management cannot be accepted. When Liquidation
Company Appeal (AT) (Insolvency) No. 595-596 & 567-568/2023 -5-
Order has been passed, it is for the Liquidator to consider the manner and
mode of sale of the assets of the Corporate Debtor in accordance with law.
9. In view of the foregoing discussions and observations, we do not find
any merit in both the Appeals, both the Appeals are dismissed.
[Justice Ashok Bhushan] Chairperson
[Naresh Salecha] Member (Technical)
Basant/nn
Company Appeal (AT) (Insolvency) No. 595-596 & 567-568/2023
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free