Gajender Sharma vs M/S Dinesh Sanitary Store

IN THE MATTER OF: Mr. Rakesh Kumar Jain Insolvency Professional E-205, Basement, Greater Kailash-II, New delhi-110048 Email: sirshree.rakesh@gmail.com Ex-Interim Resolution Professional for Krishna Estate Developers Private Limited ....... Applicant. Versus 1. Krishna Estate Developers Private Limited (Corporate Debtor) Regd. Office:- A-85, Radhey Shyam Park, Krishna Nagar, Delhi-110051 Email- aprameyagzb@gmail.com ....... Respondent No. 1. 2. Mr. Gajender Sharma (Director of Corporate Debtor) S/o Sh. Sher Singh Sharma A-85, Radhey Shyam Park, Krishna Nagar, Delhi-110051 Email- gajendersharma81@yahoo.in ....... Respondent No. 2. 3. Mr. Himanshu Sharma (Director of Corporate Debtor) S/o Sh. Sher Singh Sharma A-85, Radhey Shyam Park, Krishna Nagar, Delhi-110051 Email: aprameyagzb@gmail.com ...... Respondent No. 3. 2

Present: For Applicant: Mr. Pulkit Atal, Advocates for Ex-IRP in IA No. 313/2021. Mr. Rakesh Kumar Jain, Ex- IRP.

For Respondent:- Mr. Ritesh Khare, Mr. Siddharth Sangal and Mr. Akhilesh, Advocates for CD, Respondent in IA No. 313/2021.

ORDER

(06th December, 2022)

Justice Anant Bijay Singh;

This instant Application has been filed by the Applicant against the non-

compliance of the impugned order dated 06.01.2021 passed by the National

Company Law Tribunal, New Delhi, Principal Bench under Section 9 of the

Insolvency and Bankruptcy Code, 2016 (for short IBC) read with Order dated

03.02.2020 passed by the National Company Law Appellate Tribunal in I.A. No.

1344 of 2020 filed by the Interim Resolution Professional whereby the

Adjudicating Authority directed the Corporate Debtor -Krishna Estate

Developers Private Limited to pay the balance amount of fees and expenses of

Interim Resolution Professional. The instant Application i.e. I.A. No. 313 of 2021

is being preferred by the Applicant to revive the Corporate Insolvency Resolution

Process in terms of the Order dated 03.02.2020 passed by this Appellate

Tribunal which is hereunder:

"6. In view of the settlement reached before formation of CoC between the parties, in exercise of powers conferred under Rule-11 of NCLAT Rules, 2016, we set aside the Impugned Order dated 04.1.2020 whereby 'Corporate Insolvency

I.A. No. 313 of 2021 In Company Appeal (AT) (Ins.) No. 119 of 2020 3

Resolution Process' was initiated against Krishna Estate Developers Private Limited (Corporate Debtor) and the Application under Section 9 IBC filed by M/s Dinesh Sanitary Store stands disposed of as withdrawn.

7. In effect, order (s) passed by Ld. Adjudicating Authority appointing 'Interim Resolution Professional', declaring moratorium, freezing of account and all other order (s) passed by Adjudicating Authority pursuant to impugned order and action taken by the 'Resolution Professional', including the advertisement published in the newspaper calling for applications all such orders and actions are declared illegal and are set aside. The application preferred by the Respondent under Section 9 of the ''I&B Code' is disposed of as withdrawn. The Adjudicating Authority will now close the proceeding. The 'Corporate Debtor' is released from all the rigour of law and is allowed to function independently through its Board of Directors. IRP/RP may place particulars of CIRP costs and fees before Adjudicating Authority who will consider the same and direct Corporate Debtor to pay the same, in time as may be specified. In default IRP/RP may move this Tribunal to consider recalling present Orders.

The Appeal is disposed accordingly."

2. In this case the Applicant was appointed as Interim Resolution

Professional ("the IRP") in case of Krishna Estate Developers Private Limited by

the Adjudicating Authority on 04.01.2020. Thereafter, this Tribunal vide order

dated 23.01.2020 has directed Mr. Gajender Sharma, the suspended Director to

handover the assets and records of the Corporate Debtor to Interim Resolution

Professional immediately. The IRP has constituted Committee of Creditors on

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22.01.2020 consisting of two Operational Creditors i) Orient Bell Limited,

12.14% voting and ii) Somany Ceramics Limited, 87.86% voting. The first

meeting of committee of Creditors was held on 31.01.2020 wherein remuneration

of Rs. 2,50,000/- per month and applicable taxes & expenses of Rs. 84,750/-

incurred by IRP were approved. The IRP was asked to continue awaiting order of

the NCLT in the matte of Appeal filed by Mr. Gajender Sharma, suspended

Director of Corporate Debtor. The matter relating to appointment of Resolution

Professional was deferred for consideration at the next committee of creditors

meeting. The Applicant done his activities till 20.02.2020 as an IRP.

3. The Applicant as IRP has filed application under Section 19(2) of the IBC

before the Tribunal for issuance of the necessary directions to the suspended

Directors of Corporate Director. The IRP has received the Order dated

03.02.2020 passed by this Tribunal wherein CIRP was withdrawn due to

settlement between the Corporate Debtor and Applicant, further IRP was directed

to place particulars of CIRP costs and fees before the Adjudicating Authority for

consideration. In case of default to pay the CIRP costs, the IRP was given the

option to move this Tribunal to consider recalling its order dated 03.02.2020

(Annexure-VI at page 97 to 101 of the application). Thereafter, the IRP made an

application bearing no. IA No. 1344(PB) of 2020 in CP (IB) No. 2131 (PB)/2019

before the Tribunal for consideration of his fees and expenses as IRP on

17.02.2020. After hearing the parties, the Adjudicating Authority vide order

dated 06.01.2021 allowed IA No. 1344 (PB) of 2020 by the Applicant (Ex- IRP)

I.A. No. 313 of 2021 In Company Appeal (AT) (Ins.) No. 119 of 2020 5

and directed Corporate Debtor to pay the balance amount of Rs. 3,67,810/- to

the IRP.

4. Further, on 16.01.2021, the Applicant sent a Legal Notice issued by

Advocate Manoj Kumar Garg to the Directors and Corporate Debtor by email and

by Registered Post. Thereafter, the Applicant received reply Mr. Siddarth Sangal,

Advocate of Corporate Debtor & Directors of Corporate Debtor on 25.01.2021.

He questioned about the fee and said that no payment is due. The Operational

Creditor had given a sum of Rs. 2,00,000/-, there is no clause in settlement deed

which enumerates that settlement deed covers the amount paid by Operational

Creditor. Thereafter, the Applicant approached this Tribunal through instant I.A.

No. 313 of 2021 with following prayers:

"i) Kindly recall Order dated 03.02.2021 and initiate revival of Corporate Insolvency Resolution Process of the Corporate Debtor for failure to pay the balance amount of Rs. 3,67,810/- towards Interim Resolution Professional fees & expenses.

ii) Direct the Corporate Debtor to pay Rs. 3,67,810/- towards Interim Resolution Professional Fees & expenses.

iii) Direct the Corporate Debtor to pay Rs. 50,000/- towards costs and expenses incurred by Es-Interim Resolution Professional for drafting, preparation and filing of this appeal.

iv) Pass such other order/directions as this Hon'ble Bench may deem fit and proper in the facts and circumstances of the case."

I.A. No. 313 of 2021 In Company Appeal (AT) (Ins.) No. 119 of 2020 6

5. The Ld. Counsel for the Respondent No. 2 during the course of argument

and in his reply submitted that the CIRP was set-aside and all actions were of

the IRP were set aside by this Tribunal on 03.02.2020, therefore, the IRP is not

entitled to any expenses or fees for the period post 03.02.2020. The IRP is

claiming an amount of Rs. 5,87,560/- without adjusting Rs. 2 lakhs in the

claimed amount which already stood paid to him, despite the fact that no one

has claimed the said amount from him, which substantiates the claim of the

Respondents that these Rs. 2 lakhs have already been taken by the Operational

Creditor from the Respondents as part of the settlement amount.

6. It is further submitted that the balance amount of Rs. 1,35,000/- stood

paid to the IRP on 15.02.2020, where was the occasion for the IRP to file any

application before the Tribunal and if it did file the application, the Respondents

cannot be burdened for the same because no amount whatsoever was demanded

by the IRP from the Respondents post 03.02.2020 and before filing the

application before the Tribunal. The matter has been settled with the creditors

in total for around Rs. 26 lakh and also getting the CIRP set aside within 30

days, the Respondents have to further pay Rs. 5,87,650/- towards the IRP fees

and costs, then the same is arbitrary and not a happy situation at all. After the

order dated 06.01.2021 passed by the Tribunal, the IRP, arbitrarily, issued a

Legal Notice dated 16.01.2021 to the Respondents demanding a further Rs.

3,67,810/- without informing the genesis of the amounts and even without

adjusting Rs. 3,35,000/- already paid to him, resultant, the Respondents not

only dealt with the said Legal Notice but also filed M.A. No. 01/2020 in I.A. 1344

I.A. No. 313 of 2021 In Company Appeal (AT) (Ins.) No. 119 of 2020 7

(PB)/2020 which application of the Respondents is pending adjudication before

the Tribunal. In the above submissions, the instant I.A. filed by the IRP is devoid

of merit and is unreasonable, thus, shall be dismissed with exemplary costs.

7. After hearing the parties and in view of the order passed by this Tribunal

on 03.02.2020 where liberty was granted that in default IRP/RP may move this

Tribunal for recalling the order. Keeping in view of the fact that pursuant to the

order passed by this Tribunal, the NCLT considered the case of the IRP and

directed the Corporate Debtor to pay the CIRP costs. In view of the above, there

is no occasion to move the application before this Tribunal for non-compliance

of the order passed by the NCLT. Therefore, the instant application i.e. I.A. No.

313 of 2021 is hereby dismissed. No order as to costs.

8. Registry to upload the Order on the website of this Appellate Tribunal and

send the copy of this Order to the National Company Law Tribunal (New Delhi,

Principal Bench), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical)

New Delhi 06th December, 2022 R. Nath.

I.A. No. 313 of 2021 In Company Appeal (AT) (Ins.) No. 119 of 2020