Hemanth Meka Rao vs Asset Reconstruction Company (India) ...
- CitationCompany Appeal (AT) (Insolvency) No. 696 of 2018
Ratio decidendi
The rule this decision rests on
The appellate tribunal's disposal rests on the following reasoning, which is stated in the order itself and not in the case law it cites: Once the liquidation process under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 has commenced in the absence of an approved resolution plan, the Appellate Tribunal will not sanction a settlement between the promoter or shareholder of the corporate debtor and the creditors, even where the promoter offers to pay all outstanding dues, and the liquidation must proceed in accordance with the directions laid down in the earlier decision referred to in the order.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Mr. Hemanth Meka Rao ...Appellant
Vs.
Asset Reconstruction Company (India) Ltd. (ARCIL) & Anr. ...Respondents
Present: For Appellant: - Mr. Rajeev K. Panday, Mr. Vivek Singh and Mr. Swastik Dalai, Advocates.
For Respondents: - Mr. Dhiren Shah, Liquidator.
O R D E R
07.03.2019─ This appeal has been preferred by 'Mr. Hemanth
Meka Rao', Shareholder of 'M/s. Meka Dredging Company Private
Limited'- ('Corporate Debtor') against the impugned order dated 20th
September, 2018. By the said order, the Adjudicating Authority
(National Company Law Tribunal), Single Bench, Chennai, passed order
under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 ("I&B
Code" for short) and ordered for liquidation in absence of any approved
plan.
2. Learned counsel appearing on behalf of the Appellant submits
that a sum of Rs. 14 Crores was due and out of which a settlement for
Rs. 10.38 Crores has been made. Earlier also two 'Financial Creditors'
paid total amount of Rs. 37 Crores to 'Asset Reconstruction Company
Contd/-...................
-2-
(India) Ltd.' and Rs. 2.5 Crores to 'L&T Finance', who have given no
dues certificate. However, on completion of the 'Resolution Process', we
cannot allow any settlement with the promoters and the creditors.
3. Earlier, when the matter was taken up on 28th February, 2019,
learned counsel for the Appellant pointed out that the 'Corporate
Debtor' (Company) can be saved by passing appropriate order under
Section 230 of the Companies Act, 2013.
4. It was in this background, an interim order was passed on 30th
January, 2019 prohibiting the liquidator or the Adjudicating Authority
to take step to sell or transfer or alienate or make third party
encumbrance on the movable or immovable property of the 'Corporate
Debtor' (Company).
5. Similar issue fell for consideration before this Appellate Tribunal
in "S.C. Sekaran v. Amit Gupta & Ors.─ Company Appeal (AT)
(Insolvency) Nos. 495 & 496 of 2018".
6. The aforesaid judgment was also reiterated in the case of "Y.
Shivram Prasad Vs S. Dhanapal & Ors. ─ Company Appeal (AT)
(Insolvency) No. 224 of 2018 etc." wherein a detailed order has been
passed as to how the liquidator should proceed.
7. In the aforesaid background, no order of settlement can be
passed by this Appellate Tribunal, even though the Appellant, promoter
Company Appeal (AT) (Insolvency) No. 696 of 2018 -3-
agrees to pay all the dues. However, we direct the liquidator to proceed
in terms of the decision in "Y. Shivram Prasad Vs S. Dhanapal &
Ors." (Supra).
8. The appeal stands disposed of with the aforesaid observations
and directions. No cost.
(Justice S.J. Mukhopadhaya) Chairperson
(Justice A.I.S. Cheema) Member(Judicial) Ar/g
Company Appeal (AT) (Insolvency) No. 696 of 2018
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