Dr. Vichitra Narayan Pathak vs M/S Suraksha Realty Limited And Anr

IN THE MATTER OF: Sanjay Bulakichand Borad The Resolution Professional Having Address at: 2nd Floor, 210-212, Vrajbhumi Complex, 1 B/H. Shilp Bldg., Opp. Sardar Patel Seva Samaj, Off C.G. Road, Navrangpura, Behind Induben Khakhrawala, Near Girish Cold Drinks Cross Roads, Ahmadabad, Gujarat - 380 009 Email: Ipsanjayborad@gmail.com ...Applicant

Versus

2. Mr. Vichitra Narayank Pathak 120, Jharneshwar Colony, Madhuban Vihar, Near International Public School, Hoshangabad Road, Bopal, Madhya Pradesh - 462047. ...Appellant

3. M/s. Suraksha Reality Limited, A company incorporated under the Provisions of the Companies Act, 1956 And having its registered office at: 3, Narayan Building, 23 LN Road, Dadar East, Mumbai - 400 014. ...Respondent No. 1

Present: For Applicant : Mr. Narender L. Jain, Advocate for new RP.

For Appellant Ms. Shankari Mishra, Advocate.

For Respondents : Mr. Krishnendu Dutta, Sr. Advocate with Mr. Pranaya Goyal, Ms. Rati Patni, Mr. Chiranjivi Sharma, Ms. Nehal Gupta, Ms. Sanchi Jain, Ms. Kathleen Lobo, Mr. Chitranshul Sinha, Mr. Sagar Bansal, Mr. Dhruv Parwal and Ms. Alina Mathew, Advocates for R-2.

Mr. Abhijeet Sinha, Sr. Advocate with Ms. Sudeshna Guha Roy, Mr. Syamantak Sen, Mr. Treenok Guha, Mr. Anup Deshmukh and Mr. Pranav Parikh, Advocates for Sheth Developers.

ORDER

ASHOK BHUSHAN, J.

This Application by the new RP appointed by the Impugned Order dated

13.05.2024 has been filed praying for following reliefs:

"a. Allow the present application;

b. Permit the applicant to manage the operations of the corporate debtor as a going concern and also permit the applicant to perform all the duties under section 18 of IBC and exercise the powers required to fulfil the same except those that are specifically stayed by this Hon'ble Appellate Tribunal;

c. Permit the applicant to effect payments to professionals for rendering services for making the statutory compliances of the Corporate Debtor; to clear outstanding expenses including professional's fees and salaries and employees from May' 2024 including the fees of New Resolution Professional as per already approved fee of RP by the CoC and that are not specifically stayed by this Hon'ble Appellate Tribunal; d. Any other and further orders that may be deemed fit and proper in the facts and circumstances of the case may be passed;"

2. The Applicant's case in the Application is that the Applicant having

been appointed by a Resolution Professional (RP) by replacing the earlier RP

entitled to run the Corporate Debtor as a going concern and is incurring

various expenses. By the Impugned Order, the Committee of Creditors (CoC)

having been directed to be reconstituted, the reconstituted CoC being not in

place, this Tribunal may grant approval to incur expenses which are

necessary. It is submitted that salary to the employees need to be paid.

I.A. No. 8546 of 2024 in Comp. App. (AT) (Ins.) No. 1018 of 2024 2 of 6 Security agencies also required to be paid. The Professionals are required for

payment. It is submitted that this Tribunal by an Interim Order has already

directed that the new RP shall carry out duties regarding statutory

compliances by Order dated 14.08.2024.

3. The Application is opposed by the Central Bank of India and Arrow

Engineering Limited who has also filed Reply to the I.A. It is submitted by

them that no direction be issued to make any payment. It is submitted that

all payments are required to be approved by the CoC, hence the existing CoC

be directed to vet the claims and expenses. It is prayed that the Appeal itself

may be finally decided.

4. Learned Counsel appearing for Suraksha Reality Limited and Sheth

Developers Pvt. Ltd. submit that expenses as prayed be allowed subject to

ratification by reconstituted CoC.

5. We have considered the submissions of the Counsel for the Parties and

perused the Application and the Reply filed therein.

6. The present Appeal as well as other Appeals have been filed challenging

the Order dated 13.05.2024, by which Order the Adjudicating Authority on

an Application filed by Suraksha Reality Ltd. has directed for replacement of

the RP and directed for reconstituting the CoC after verifying the claims

admitted. A Transaction Audit was also directed. An Interim Order was

passed in this Appeal on 21.05.2024 "in the meantime, no further steps shall

be taken in pursuance of the impugned order", which was subsequently also

clarified on 27.05.2024. This Tribunal also passed subsequently another

Order directing the new RP to take steps towards statutory compliances.

I.A. No. 8546 of 2024 in Comp. App. (AT) (Ins.) No. 1018 of 2024 3 of 6

7. There being direction to take steps towards the statutory compliances,

steps have to be taken towards that end by the RP. On 14.08.2024, following

Order was passed:

"I.A. No. 5776 of 2024

This application is filed by Mr. Sanjay Bulakichand Borad, Respondent No.2 seeking a direction that respondent no.2 to undertake all steps towards the statutory compliances as well as the in continuation of CIRP. We have already passed an interim order on 21.05.2024 :-

"In the meantime, no further steps shall be taken in pursuance of the impugned order which was subsequently also clarified on 27.05.2024."

In view of the order passed in this appeal earlier RP cannot come back.

We are of the view that as for the statutory compliances are concerned the applicant may take steps towards the statutory compliances apart from which no further steps shall be taken.

Ex-management & Employees of the corporate debtors as well as earlier RP shall assist for completion of the compliances.

Application is disposed of accordingly."

8. It is disputed by Counsel for the Central Bank of India and Arrow

Engineering Ltd. that Corporate Debtor is not running as a going concern,

hence no payment be directed towards the salary as claimed by the RP.

Learned Counsel has also relied on the Judgment of the Hon'ble Supreme

Court in the matter of 'Sunil Kumar Jain & Ors.' Vs. 'Sunaresh Bhatt &

Ors.' reported in AIR 2022 SC 1985 to support his submission that unless

the employees have worked during CIRP period, no CIRP cost be paid.

9. We have already directed the Appeal to be listed 'For Hearing' on

31.01.2025, we are of the view that Appeal need to be decided as has been

agreed by the Parties. However, for the time being, we are of the view that the

I.A. No. 8546 of 2024 in Comp. App. (AT) (Ins.) No. 1018 of 2024 4 of 6 new RP may incur expenses which are absolutely necessary for maintaining

the Corporate Debtor i.e., security expenses, expenses which are incurred

towards payment to Statutory Auditors, Practicing Company Secretary and as

well as the RP which was permitted by the Adjudicating Authority itself, this

shall be in addition to necessary payments towards the statutory

compliances. We, however, direct that all payments which are to be made in

pursuance of this Order shall be upon undertaking that the payments are

subject to ratification by reconstituted CoC and in event of CoC not approving

the payment, payments are to be refunded. With regard to other claims of

payment as claimed by the RP, we are of the view that the said payment be

placed before the reconstituted CoC and only after approval of the

reconstituted CoC, other payments be undertaken.

10. In view of the aforesaid, we dispose of the I.A. 8546/2024 with a

following directions:

i. RP is permitted to incur expenses towards statutory compliances.

Payments towards Statutory Auditor, Practicing Company Secretary

and RP shall be paid in accordance with the Order as approved by the

Adjudicating Authority on 13.05.2024. The above payments shall be

subject to ratification by the reconstituted CoC and shall be

undertaken after undertaking from the Parties to whom the payments

are being made that in event of payments not being approved, the said

shall be refunded.

I.A. No. 8546 of 2024 in Comp. App. (AT) (Ins.) No. 1018 of 2024 5 of 6 ii. With regard to other claims of payment, including payment of salary

to the employees, the same shall be placed before the reconstituted

CoC for consideration and approval.

iii. Payment to security agencies who have been appointed to securing the

assets of the Corporate Debtor shall also be paid.

iv. We, further direct that new RP shall not engage any new Professional

in the CIRP process, for the time being.

Application disposed of accordingly.

[Justice Ashok Bhushan] Chairperson

[Arun Baroka] Member (Technical)

NEW DELHI

24th January, 2025

himanshu

I.A. No. 8546 of 2024 in Comp. App. (AT) (Ins.) No. 1018 of 2024 6 of 6