Deepak Singhania vs Lml Ltd. & Ors

Company Appeal (AT) (Insolvency) Nos. 121 & 122 of 2018

IN THE MATTER OF:

Deepak Singhania ...Appellant

Versus

LML Ltd. & Ors. ...Respondents

Present:

For Appellant : Mr. M.L. Lahoty, Mr. Arvind Kr. Gupta and Ms. Henna George, Advocates

For 1st Respondent: Mr. Saurabh Kalia, Advocate

For 2nd Respondent : Mr. Devendra Singh and Ms. Karishma Jaiswal, Company Secretary For 3rd, 4th & 7th Respondent : Mr. P.V. Dinesh and Mr. Rajendra Beniwal, Advocates

For 5th Respondent Mr. Ashish Rana, Advocate

For 6th Respondent Mr. Nikhil Mishra, Advocate

For 9th Respondent Mr. Navneet Gupta, Advocate

For 12th Respondent: Mr. R.P. Agarwal and Mr. Sunny Verma, Advocates

WITH

Company Appeal (AT) (Insolvency) No. 131 of 2018

IN THE MATTER OF:

Anil Goel (Resolution Professional) ...Appellant Versus LML Ltd. ...Respondent 2

Present:

For Appellant : Ms. Varsha Banerjee, Mr. Milan Singh Negi and Mr. Tarun Mehta, Advocates

WITH

Company Appeal (AT) (Insolvency) No. 154 of 2018

IN THE MATTER OF:

Sanjeev Shriya ...Appellant

Versus

LML Ltd. & Ors. ...Respondents

Present:

For Appellant : Mr. Anirudh Wadhwa, Mr. Akash Jauhari, Mr. Anandana H. Wadhwa and Mr. Vipul Kumar, Advocates

For 1st Respondent: Mr. Saurabh Kalia, Advocate

For 2nd Respondent : Mr. Syed Sarfaroz Karim, Advocate

For 3rd, 4th & 11th Respondent : Mr. P.V. Dinesh and Mr. Rajendra Beniwal, Advocates

For 4th Respondent Mr. Surekh Baxi, Advocate

For 5th Respondent : Mr. Devendra Singh, Advocate

For 6th Respondent : Mr. Nikhil Mishra, Advocate

For 9th Respondent: Mr. Navneet Gupta, Advocate

Company Appeal (AT) (Insolvency) Nos. 121 , 122, 131 & 154 of 2018 3

ORDER

12.07.2018 On 5th April, 2018 when the matter was taken up, the

following submission made on behalf of the learned Senior Counsel is as follows:

"Learned counsel for the appellant(s) submits that in terms

of settlement between the 'Financial Creditors' and the

'Corporate Debtors' (at pages 82 to 111) a sum of Rs. 99.61

Crores was payable. In the 'Information Memorandum' (at

pages 174 onwards), though higher amount has been

shown, has been admitted by the Resolution Professional in

Note 7 below the said 'Information Memorandum' (page

181). According to him, Section 5 of the 'Sick Industrial

Companies (Special Provisions) Repeal Act, 2003' protects

the settlement already reached between the 'Financial

Creditor and the 'Corporate Debtor' and therefore, the

'Financial Creditor' cannot claim any amount beyond the

settlement. The Resolution Applicant though offered higher

amount of Rs. 240 Crores against due amount of Rs. 99.61

Crores but the 'Committee of Creditors' (CoC) rejected the

same on presumption that they are entitle to claim Rs. 341

Crores. It is submitted that the CoC by majority vote of 75%

can approve or reject a Resolution Plan, but there should not

Company Appeal (AT) (Insolvency) Nos. 121 , 122, 131 & 154 of 2018 4

be any arbitrariness and it should be reasonable and as

also transparent."

2. On hearing the learned counsel for the parties, we find that the appellant

is 'Promoter', 'Director', 'Shareholder' and also presently 'Guarantor' of the

'Corporate Debtor'. It is also not in dispute the application filed by the 'Corporate

Debtor' was under Section 10 of the Insolvency and Bankruptcy Code, 2016

(hereinafter referred to as the 'I&B Code') and after 'corporate insolvency

resolution professional', the 'Committee of Creditors' having rejected the sole

'Resolution Plan' the Adjudicating Authority passed the impugned order dated

23rd March, 2018 for liquidation. The argument advanced by the learned Senior

Counsel appearing on behalf of the appellant is that the Adjudicating Authority

should have given opportunity to call for 'Resolution Plan' before passing order

of liquidation, may be attractive but the fact remains that the 'resolution

applicant' whose plan has been rejected has not challenged the rejection. The

'Promotor' cannot challenge such rejection as he is not proposed to know as to

whether the 'resolution plan' was in accordance with Section 30(2) or not. As

the 'resolution applicant' in this case was barred under Section 29A of the I&B

Code, in absence of any detail of the 'Resolution Applicant', we cannot deliberate

on the issue whether the 'resolution plan' was rightly rejected or not that too

when the order of rejection is not under challenged.

3. So far as the status of appellant is concerned, he cannot be a 'resolution

applicant' being 'Promotor' and being ineligible under Section 29A. The status

of the guarantor will also not be affected as the 'Corporate Debtor' is now

Company Appeal (AT) (Insolvency) Nos. 121 , 122, 131 & 154 of 2018 5

undergoing liquidation process. Therefore, we find that no case is made out by

the appellant to interfere with the order of liquidation and therefore, we are not

going into the facts which were highlighted to decide whether the quantum of

amount payable to the 'Financial Creditors' was 99.61 crores or Rs. 341 crores.

In absence of any merit, the appeal is dismissed. No cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/sk

Company Appeal (AT) (Insolvency) Nos. 121 , 122, 131 & 154 of 2018