J.P. Morgan Chase Bank N.A vs Ashapura Minechem Ltd

Present: For Appellant : Mr. Sandeep Sreekumar and Mr. Saswat Pattnaik, Advocates

For Respondents : Dr. U.K. Choudhary, Senior Advocate Mr. Rajesh Bohra and Mr. Dhruv Gupta, Advocates For Promoters Mr. Abhijit Sinha, Mr. Anuj Shah and Mr. Pawan Sharma, Advocates for RP

Company Appeal (AT) (Insolvency) No. 365 of 2019

IN THE MATTER OF:

J.P. Morgan Chase Bank N.A. ...Appellant

Versus

Ashapura Minechem Ltd. & Anr. ...Respondents

For Appellant : Mr. Arun Kathpalia, Senior Advocate with Mr. Shubhbrata Chakraborti, Mr. Ashish Mukhi and Mr. Kamlendra Singh, Advocates

For Respondents : Dr. U.K. Choudhary, Senior Advocate Mr. Rajesh Bohra and Mr. Dhruv Gupta, Advocates For Promoters

Mr. Abhijit Sinha, Mr. Anuj Shah and Mr. Pawan Sharma, Advocates for RP 2

Company Appeal (AT) (Insolvency) No. 439 of 2019

IN THE MATTER OF:

HDFC Bank Ltd. ...Appellant

Versus

Ashapura Minechem Ltd. ...Respondent

For Appellant : Ms. Niti Jain and Ms. Richa, Advocates

For Respondents : Dr. U.K. Choudhary, Senior Advocate Mr. Rajesh Bohra and Mr. Dhruv Gupta, Advocates For Promoters

Mr. Abhijit Sinha, Mr. Anuj Shah and Mr. Pawan Sharma, Advocates for RP

ORDER

30.09.2019 'Ashapura Minechem Limited' (Corporate Debtor / Corporate

Applicant) filed an application under Section 10 of the 'Insolvency and

Bankruptcy Code, 2016 (for short, 'the I&B Code') along with petition under

Section 31 of the 'I&B Code' for admitting the application and to approve the

plan as filed by 'Miscellaneous Application No. 303 of 2019' on 23rd January,

2019 under Section 31 of the I&B Code. The Adjudicating Authority (National

Company Law Tribunal), Mumbai Bench by impugned order dated 15th March,

2019 admitted the application filed under Section 10 and in view of the plan

submitted by the Miscellaneous Application observed as follows and

simultaneously issued order of moratorium :

"28. However, this Bench is of the view that there is

no requirement of publication to invite EoI. It can be said to

I.A. No. 3052 of 2019 IN Company Appeal (AT) (Insolvency) No. 350 of 2019 & Company Appeal (AT) (Insolvency) Nos. 365 & 439 of 2019 3

be a path-breaking view, but according to my

understanding, it is the only recourse available because in

this case that exercise had already been completed under

SIC Act. There is no requirement for inviting Resolution Plans

in this case. As far as the applicability of S. 30 is concerned,

a resolution plan is to be submitted by a Resolution

Applicant on the basis of the Information Memorandum. But

the situation in this case is that a Resolution Plan is already

in existence. Not only that the said resolution plan is in

existence, but it was duly acted upon. The said resolution

plan was already considered by the bankers during

SARFAESI Proceedings. Those very bankers are now going

to constitute CoC under Insolvency Code. This very

'Consortium' has already acknowledged and accepted the

resolution plan, hence, the right recourse available is to

consider that Resolution Plan as if a resolution plan U/s 30

of the Code. If we adopt this line of action obviously the

procedure of Corporate Insolvency Resolution Process shall

get simplified and certainly get finalised expeditiously. It is

worth to supplement at this juncture that the time is the

essence for implementation and finalisation of the process

of the Insolvency."

2. The Appellants challenged the impugned order admitting the application

filed under Section 10 of the 'I&B Code' in the manner in which it was passed,

I.A. No. 3052 of 2019 IN Company Appeal (AT) (Insolvency) No. 350 of 2019 & Company Appeal (AT) (Insolvency) Nos. 365 & 439 of 2019 4

taking into consideration the plan submitted by the applicant under Section 10

and on some other grounds.

3. This Appellate Tribunal issued notice on 8th April, 2019 when noticed no

decision has been taken by the shareholder in its 'Annual General Meeting and

'Extra-Ordinary General Meeting'. Subsequently, on 8th July, 2019 when the

matter was taken up, it was also ordered and the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench, was prohibited from passing

any order in the insolvency case. Learned counsel appearing on behalf of the

'Shareholders' of the 'Corporate Debtor' submits that the members now want to

withdraw the application filed under Section 10 of the 'I&B Code'. Dr. U.K.

Choudhary, learned Senior Counsel appearing on behalf of the 'Shareholders'

submits that the in view of the interim order passed on 8th July, 2019, the

Adjudicating Authority is not in a position to pass order of withdrawal.

4. We have heard Mr. Sandeep Sreekumar along with Mr. Saswat Pattnaik,

Advocates; Mr. Arun Kathpalia, learned Senior Counsel with S. Chakraborti,

Advocate and Ms. Richa, Advocates for the Appellants and Dr. U.K. Choudhary,

learned Senior Counsel appearing on behalf of the 'Shareholders' and Mr. Abhijit

Sinha and Mr. Anuj Shah, learned counsel appearing on behalf of the RP.

5. We are of the opinion that the impugned order dated 15th March, 2019 is

against the provision of law and cannot be sustained. It is not in dispute that

the application filed under Section 10 is without approval of the 'Annual General

Meeting' / 'Extra-Ordinary General Meeting'. Simultaneously a plan was

submitted which is against the provision of Section 65 of the I&B Code as it

appears that it is filed with malicious intent for any purpose other than for the

I.A. No. 3052 of 2019 IN Company Appeal (AT) (Insolvency) No. 350 of 2019 & Company Appeal (AT) (Insolvency) Nos. 365 & 439 of 2019 5

resolution of insolvency and liquidation. For this reason, we set aside the

impugned order dated 15th March, 2019.

6. The petition under Section 10 of the I&B Code filed in 'Form 6' is

dismissed. The Adjudicating Authority will close the proceedings.

7. In the result, 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 1st Respondent under Section 10 of the I&B Code is dismissed.

The Adjudicating Authority will now close the proceeding. The 2nd Respondent

Company is released from all the rigour of law and is allowed to function

independently through its Board of Directors from immediate effect.

8. Taking into consideration the facts that the ''Interim Resolution

Professional' has worked for about 6 months, we assess the fee of 'Interim

Resolution Professional' @ Rupees One Lakh per month i.e. total Rupees Six

Lakhs and cost of publication of Rs. 24,000/- + Rs. 26,000/- for other expenses

and Rs. 1.5 Lakhs for engaging a counsel for ''Interim Resolution Professional'

that means total 'Rupees Eight Lakhs'. It is also agreed by 'Mr. Arun Chadha,

'Interim Resolution Professional'.

9. Dr. U.K. Choudhary, learned Senior Counsel who appears on behalf of the

'Shareholders' (now 'Corporate Debtor) accepts that this fee and costs will be

borne by the 'Corporate Debtor'. Therefore the 'Corporate Debtor' will pay the

I.A. No. 3052 of 2019 IN Company Appeal (AT) (Insolvency) No. 350 of 2019 & Company Appeal (AT) (Insolvency) Nos. 365 & 439 of 2019 6

total cost of 'Rupees Eight Lakhs' to the ''Interim Resolution Professional' within

three weeks.

All these appeals are allowed with aforesaid observations.

[Justice S.J. Mukhopadhaya] Chairperson

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

[ Kanthi Narahari ] Member (Technical) /ns/gc

I.A. No. 3052 of 2019 IN Company Appeal (AT) (Insolvency) No. 350 of 2019 & Company Appeal (AT) (Insolvency) Nos. 365 & 439 of 2019