Gulabchand Jain vs Ramchandra D Choudhary Resolution ...
- CitationCompany Appeal (AT) (Insolvency) No. 142 of 2021
Ratio decidendi
The rule this decision rests on
The Committee of Creditors cannot be said to have breached the rules of natural justice where the appellant, as the suspended management and promoter of the corporate debtor, was represented at the COC meetings and raised no objection to such participation at the time; a later challenge to the fact of that participation, which is a matter of record, cannot be entertained. Under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, read with the explanation inserted by Act 26 of 2019 (effective 16 August 2019), the COC may resolve to liquidate the corporate debtor even after the Resolution Professional has filed an approved Resolution Plan before the Adjudicating Authority; the COC may change its decision in this respect at any time before the Adjudicating Authority has approved the Resolution Plan, but not after such approval.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Mr. Gulabchand Jain ....Appellant Vs. Mr. Ramchandra D. Choudhary, Resolution ....Respondent Professional of Vijay Timber Industries Pvt. Ltd. Present: Appellant: Mr. Sunil Bhavsar, Advocate. Respondent: Mr. Atul Sharma, Advocate.
ORDER
(Through Virtual Mode)
02.03.2021: The only issue raised in this appeal preferred against order
dated 31st December, 2020 passed by the Adjudicating Authority (National
Company Law Tribunal), Ahmedabad Bench, Court-2, sending the Corporate
Debtor into liquidation on the recommendation of the Committee of Creditors
(COC) comprising of the sole lender Punjab National Bank is that the Rules of
Natural Justice have not been followed by the COC.
2. After hearing Mr. Sunil Bhavsar, learned counsel for the Appellant, we
find that the Suspended Management being the Promoter was all along
represented in the COC meetings and never raised any objection as emanates
from para 1 of the impugned order. This being a matter of record, the
Appellant- Promoter's disputing the factum of his participation in the COC
Contd/-.............
-2-
meetings cannot be entertained. That apart, under Section 33(2) of the
Insolvency and Bankruptcy Code, 2016 read together with explanation inserted
by Act 26 of 2019 enforced w.e.f. 16th August, 2019, the COC is empowered to
take a decision in regard to liquidation of the Corporate Debtor even after an
application has been filed by the Resolution Professional placing the Resolution
Plan approved by the COC before the Adjudicating Authority for approval. Of
course, the withdrawal of the Resolution Plan can be done before its approval
by the Adjudicating Authority. This implies that even after approval of the
Resolution Plan by the COC and laying it before the Adjudicating Authority, the
COC can change its mind and pass a Resolution liquidating the Corporate
Debtor subject to only exception that such course cannot be adopted after its
confirmation i.e. after approval of the Resolution Plan by the Adjudicating
Authority.
We find no merit in this appeal. The same is dismissed.
[Justice Bansi Lal Bhat] Acting Chairperson
[Dr. Ashok Kumar Mishra] Member (Technical)
AR/g
Company Appeal (AT) (Insolvency) No. 142 of 2021
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