Jogendra Kumar Arora vs Dharmender Sharma & Anr

For Appellant : Mr. Rakesh Kumar and Mr. Aashish Khattar, Advocates

For 1st Respondent: Mr. Dharmender Sharma

For 2nd Respondent : Mr. Sandeep Chandna, RP

ORDER

12.02.2019 This appeal has been preferred by Mr. Jogendra Kumar Arora,

Shareholder of 'SRS Real Infrastructure Limited' against order dated 10th

January, 2019 passed by the Adjudicating Authority (National Company Law

Tribunal), Chandigarh Bench, Chandigarh whereby application under Section 9

of the Insolvency and Bankruptcy Code, 2016 filed by the respondent - Mr.

Dharmender Sharma, Proprietor of 'ADP Interiors and Contractors' (Operational

Creditor) has been admitted.

2. On 29th January, 2019 when the matter was taken up and the following

order was passed by this Appellate Tribunal :

2

"Learned counsel appearing on behalf of the

Appellant submits that no Committee of Creditors have

been appointed and relied on Para 52 of decision of Hon'ble

Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union

of India & Ors.', Writ Petition (Civil) No. 99/2018 dated 25th

January, 2019, which reads as follows:

"52. It is clear that once the Code gets triggered

by admission of a creditor's petition under

Sections 7 to 9, the proceeding that is before

the Adjudicating Authority, being a collective

proceeding, is a proceeding in rem. Being a

proceeding in rem, it is necessary that the

body which is to oversee the resolution process

must be consulted before any individual

corporate debtor is allowed to settle its claim.

A question arises as to what is to happen

before a committee of creditors is constituted

(as per the timelines that are specified, a

committee of creditors can be appointed at any

time within 30 days from the date of

appointment of the interim resolution

professional). We make it clear that at any

stage where the committee of creditors is not

yet constituted, a party can approach the

NCLT directly, which Tribunal may, in exercise

I.A. 312 & 336 of 2019 IN Company Appeal (AT) (Insolvency) No. 94 & 95 of 2019 3

of its inherent powers under Rule11 of the

NCLT Rules, 2016, allow or disallow an

application for withdrawal or settlement. This

will be decided after hearing all the concerned

parties and considering all relevant factors on

the facts of each case."

It is submitted that the Appellant is ready to pay all the

debt to the Operational Creditor. It is informed that the

Interim Resolution Professional has been appointed but no

advertisement has been published till date.

In this circumstance, let notice be issued on Respondents

by speed post. Requisites alongwith process fee, if not

filed, be filed by tomorrow. If the Appellant provides email

address of the Respondents, let notice be also issued

through email.

Post the case 'for admission' on 22nd February, 2019.

In the meantime, the Interim Resolution Professional will

not issue any advertisement calling for claims, if not yet

issued and will not constitute the Committee of Creditors

without prior permission of this Appellate Tribunal. It will

be open to the Appellant to make settlement with the

Respondents (Operational Creditors) and move before the

Adjudicating Authority in light of the decision of Hon'ble

Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. Vs.

Union of India & Ors.' as quoted above."

I.A. 312 & 336 of 2019 IN Company Appeal (AT) (Insolvency) No. 94 & 95 of 2019 4

3. Mr. Dharmender Sharma, Proprietor of 'ADP Interiors and Contractors'

(Operational Creditor) appears in person and submits that the parties have

settled and he has received the settled amount. Mr. Sandeep Chandna,

Resolution Professional submits that he has performed duties for about 20 days

and pursuant to publication of notice he has collating the claims. He had quoted

the fees of Rupees Ten Lakhs for 30 days and incurred Rs. 4.5 lakhs for

publication of notice etc.

4. Mr. A.M. Ranjan Kumar, Advocate wanted to intervene on behalf of the

Eight Financial Creditors to oppose the prayer. He submitted that the Eight

Financial Creditors have already submitted their claim before the 'Resolution

Professional'. However, parties having settled the matter prior to constitution of

'Committee of Creditors', we are not inclined to entertain any application for

creditors.

5. Further in view of the decision of the 'Swiss Ribbons Pvt. Ltd. & Anr', and

in exercise our inherent powers under Rule 11 of the NCLAT Rules, 2016, allow

the prayer made by Mr. Dharmender Sharma for withdrawal of the application

in view of the settlement already reached. We accordingly set aside the impugned

order dated 10th January, 2019 and dismiss the C.P. (IB) No.

158/Chd/Hry/2018 as withdrawn.

6. 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

I.A. 312 & 336 of 2019 IN Company Appeal (AT) (Insolvency) No. 94 & 95 of 2019 5

Respondent under Section 9 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.

7. Taking into consideration the fact that we have closed the proceedings, we

direct the 'Corporate Debtor' to pay the total sum of Rs. 14.5 Lakhs towards fee

and cost incurred by Mr. Sandeep Chandna, (Resolution Professional) within two

weeks. So far as the 'Financial Creditors' who wanted to intervene and other

'Operational Creditors' who applied pursuant to the advertisement, this order will

not come in their way to take recourse in accordance with law.

8. The appeal is allowed with aforesaid observations and directions. However,

in the facts and circumstances of the case, there shall be no order as to cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/uk/

I.A. 312 & 336 of 2019 IN Company Appeal (AT) (Insolvency) No. 94 & 95 of 2019