Ilam Chand Kamboj vs Ang Industries Ltd

IN THE MATTER OF: Ilam Chand Kamboj .....Appellant Vs. M/s ANG Industries Ltd. ......Respondents

Present : For Appellant: RP in person Mr. Prashant Mehta, Mr. Gaurav Malik, Mr. Joy Bajaj, Mr. Kanav Gaba, Advocates

02.08.2019 - This appeal has been preferred by Appellant - 'Ilam Chand

Kamboj' ('Resolution Professional') of 'ANG Industries Ltd.' ('Corporate Debtor')

against part of the impugned order dated 4th February, 2019 passed by the

Adjudicating Authority ('National Company Law Tribunal'), New Delhi Bench,

New Delhi in Company Petition no. (IB)-292(ND)/2017 wherein certain

observations have been made giving rise to initiation of proceeding by 'Insolvency

and Bankruptcy Board of India' (IBBI).

Company Appeal (AT) (Insolvency)No. 253 of 2019 1

2. The grievance of the Appellant is against the following observations made

by the Adjudicating Authority: -

"5.5. It is seen that the RP has not complied with

the directions of this Tribunal as per para 10 of

our order dated 15.10.2018.

"it is also noted that the valuation report of two

valuers as submitted by the Resolution

Professional during the course of proceedings to

consider the resolution plan did not inspire

confidence and therefore during the course of the

proceedings it was considered expedient to get

yet another valuation conducted by a valuer as

approved and on the panel of the IBBI. In these

circumstances, and also considering the fact that

the Corporate Debtor is a public listed company

where approximately 74% of the shareholding is

held by the public at large it is directed that a

fresh valuation may be done by a valuer approved

by IBBI".

The RP has not complied with these directions and

no valuation as directed by the court has been

done, ostensibly for the reason that the COC is not

COMPANY APPEAL (AT) (INSOLVENCY)NO. 253 OF 2019 2 able to foot the expense for yet another valuation.

We are unable to see any merit in this argument

and consequently do not agree with the RP.

7.4 It was stated by the RP that the resolution

plan was submitted by a consortium of resolution

applicants. It was noted that the resolution plan was

not submitted by either a resolution applicant

individually or jointly with any other person. The

resolution plan was submitted by five different

entities, each styled as Resolution Applicant. These

resolution applicants had individually signed the

proposals for the resolution plan. No agreement was

filed along with the resolution plan in respect of the

formation of such consortium. Thus, the resolution

plan was not as per the definition u/s 5(26) of the

Code, quoted above.

8.4 it is seen that while submitting the

resolution plan, the Resolution Professional

while praying for all kinds of relief and blanket

exemptions from payment of dues, penalties

etc., as well as withdrawal of all pending

cases against the CD, did not even exclude

COMPANY APPEAL (AT) (INSOLVENCY)NO. 253 OF 2019 3 from the prayer, the relief regarding which he

himself had a doubt. One such prayer is

quoted below:-

" Direct the financial

creditors and operational creditors

(who have filed cases recovery of

their dues) to withdraw all

suits/applications filed against the

Corporate Debtor on approval of the

Resolution Plan: (can we pray that

on approval of this plan by the

tribunal, all the existing litigations

shall stand disposed off)".

8.7 In CA 858/C-II/ND/2018, the RP

while seeking approval of this Tribunal for liquidation

of the CD has also sought approval for private sale of

the assets of two units, namely, Sitarganj Unit for Rs.

18.50 crores to M/s Mayur Industries Private Limited

and Greater Noida unit for Rs. 15.50 crores to MM

Forgings. While the offer of MM Forgings Limited for

purchase of Greater Noida unit has been considered

many times by this Tribunal (as mentioned in Para 5.2

COMPANY APPEAL (AT) (INSOLVENCY)NO. 253 OF 2019 4 above), the offer of Mayur Industries Private Limited

to buy the Sitarganj Unit has been mentioned for the

first time in this application for liquidation. The

proposal for private sale of Sitarganj Unit was also not

raised before us in oral hearing of his application.

8.8 In CA No. 858/C-II/ND/2018, the

details of complete voting have not been filed as it

was stated the representatives of SBI, Bank of

Baroda expressed that though they agree with the

proposal/Resolution but the formal approval shall be

communicated by way of their vote through email

shortly. Ballot papers regarding the COC meeting

dated 19.11.2018 have been placed on record after

the Court hearing and the same have not been

accompanied by any affidavit.

9. we are of the opinion that the assets of

the CD are not valued properly and hence they are

required to be referred to an independent valuer for

valuation. We are also persuaded that the RP had not

submitted a resolution plan in compliance with the

provisions of the Code. The Resolution Professional

has also been avoiding carrying out orders of this

COMPANY APPEAL (AT) (INSOLVENCY)NO. 253 OF 2019 5 Tribunal, specifically, with reference to independent

valuation of the assets of the CD. Hence, the

recommendation of the COC to appoint the

present RP as liquidator is not approved. We are

persuaded that, it would be appropriate to refer

the matter to the IBBI, the body for regulating

the functioning of the Resolution Professionals,

to examine the actions of the Resolution

Professional and taking suitable action. The

IBBI is also requested to suggest the name of

another approved Resolution Professional to

act as Liquidator. The Liquidator appointed

after recommendation of IBBI shall also get a

fresh valuation done of the assets of the

Corporate Debtor. The liquidator so appointed

will also appoint a qualified CA to determine

the claim of the Operational Creditor, SBIPL

and consider the same as mentioned in Para

3.4.5 above."

3. Normally, the Adjudicating Authority is not supposed to pass any adverse

observations, even prima facie, against the 'Resolution Professional', without

giving an opportunity to the 'Resolution Professional' as to why in view of certain

Act, the matter be not referred to 'IBBI'.

COMPANY APPEAL (AT) (INSOLVENCY)NO. 253 OF 2019 6

4. However, as in the meantime, we find that the matter has been taken

cognizance by the IBBI which has initiated the proceedings against the Appellant

- 'Resolution Professional', we are not expressing any opinion on the merit of the

observations.

5. However, the 'IBBI' cannot treat observations as made by the Adjudicating

Authority, as referred to above, as final decision against the Appellant, as the

observation made, without granting any opportunity to the Appellant. Therefore,

the 'IBBI' will hear the proceedings and decide on merit after hearing the

'Resolution Professional' and taking into consideration reply as may be

submitted by the Appellant, uninfluenced by the observations made by the

Adjudicating Authority as referred to above. It is expected that IBBI will complete

the enquiry on an early date preferably within three months.

The appeal stands disposed of with aforesaid observations. No costs.

[Justice S. J. Mukhopadhaya] Chairperson

[Justice A. I. S. Cheema] Member (Judicial)

[Kanthi Narahari] Member (Technical)

ss/gc

COMPANY APPEAL (AT) (INSOLVENCY)NO. 253 OF 2019 7