Kunwer Sachdev vs Su-Kam Power Systems Limited & Ors

Kunwer Sachdev, S/o Late Shri Krishan Lal, Aged about 60 years R/o 1625B, The Magnolias, DLF Phase-V, Haryana - 122002 Email : Kunwersachdev@gmail.com ...Appellant

Versus

1. Su-Kam Power Systems Ltd Registered office at: 100, Vasundhara Enclave, Pitampura, West Delhi - Delhi - 110034 Email Id: yajanbansal@su-kampower.com

2. Mr. Navraj Mittal, R/o House No. 1331 Sector - 4 Panchkula, Haryana Email ID: adv.banibrar@gmail.com

3. Mr. Vishnu Prakash, R/o House No. 63, Sector - 6 Panchkula, Haryana Email id; adv.banibrar@gmail.com

4. Mr. Ashok Kumar Gupta, R/o House No. 1331 Sector-4, Panchkula, Haryana Email Id: adv.banibrar@gmail.com

5. Mr. Yajan Bansal, R/o House No. 78 Sector-21, Panchkula, Haryana Email Id: adv.banibrar@gmail.com

6. Mr. Raj Kumar Ralhan, -2-

Liquidator, Flat No. 801, Tower01, Kalypso Court, Sector 128, Jaypee Greens Wish Town, Noida, Gautam Buddh Nagar, Uttar Pradesh Email Id: rajkumarralhan@gmail.com

7. Mr. Rajiv Chakraborty, Resolution Professional, 1st Floor, 12, Sukhdev Vihar, New Delhi 110025 Email ID: chakrabortyrajiv72@gmail.com ...Respondents

Present: For Appellant: Mr. Siddharth Yadav, Sr. Advocate with Mr. Apoorv Agarwal, Mr. Abhay Singla and Mr. Maitreya Sahu, Advocates. For Respondents: Mr. Krishnendu Datta, Sr. Advocate with Ms. Bani Brar Rustomkhan and Mr. Rajat Sinha, Advocates for R-1 to 5. Mr. Siddhant Kant and Mr. Nikhil Mathur, Advocates for R-6.

JUDGMENT

ASHOK BHUSHAN, J:

1. This Appeal by a Suspended Director of the Corporate Debtor has

been filed challenging the Order dated 01st May, 2023 by which order I.A.

No. 4660 of 2022 filed by Respondent No. 1 for substituting the name of

Respondent No. 1 in place of Applicant (Resolution Professional) in I.A. No.

1090 of 2018 has been allowed. The Appellant aggrieved by the said order,

has come up in this Appeal.

2. Before we proceed to notice the respective contentions of the parties,

it is necessary to notice background facts and sequence of the events

leading to passing of the Order dated 01st May, 2023.

3. The Corporate Debtor-Su-Kam Power Systems Ltd. was admitted to

Insolvency Resolution Process by Order dated 05th April, 2018 passed on

Company Appeal (AT) (Insolvency) No. 1177/2023 -3-

Section 7 Application filed by the State Bank of India. Resolution

Professional invited Expression of Interest. The Appellant as suspended

director of the Corporate Debtor also submitted a Resolution Plan.

Resolution Professional informed the Appellant that Appellant is ineligible

under Section 29A (h) of the Code to submit a Resolution Plan. The

Appellant filed an Application being C.A. No. 58(PB)2019 challenging the

decision of the Resolution Professional to declare him ineligible which

application came to be rejected by the Adjudicating Authority vide Order

dated 02nd April 2019. Order of the Adjudicating Authority was challenged

by the Appellant before this Tribunal in C.A.(AT) Ins. No. 1498 of 2019

which appeal was also dismissed by this Tribunal vide its order/judgment

dated 19.12.2019.

4. On the basis of audit report, the Resolution Professional filed an I.A.

No. 1090 of 2018 under Section 43, 45 and 66 of the Code against 28

Respondents in which the Appellant was also Respondent No. 25. No plan

having been approved in the CIRP, the Adjudicating Authority passed an

order dated 03rd April, 2019 directing for liquidation of the corporate

debtor. In the Liquidation, the Liquidator issued public announcement

inviting expression of interest for acquisition of the corporate debtor as a

going concern. In pursuance of e-auction, a bid of Rs. 49.95 Crores was

submitted by Respondent No. 2 to 5 which being the highest bid was

accepted by the Corporate Debtor. Respondent No. 2 to 5 the Successful

Auction Purchaser submitted an acquisition plan providing for method of

acquisition of the corporate debtor which acquisition plan came to be

Company Appeal (AT) (Insolvency) No. 1177/2023 -4-

approved by the Adjudicating Authority vide order dated 11th May, 2022. In

the said proceeding I.A. No. 672/2021 was filed by the Appellant Ex-

Promoter to reject the application praying for approval of the acquisition,

the Adjudicating Authority by its order allowed the application approving

the acquisition plan and rejected the application filed by the Appellant.

Appellant aggrieved by the order dated 11th May, 2022 filed C.A.(AT) Ins.

No. 673 of 2022 challenging the order dated 11th May, 2022 which Appeal

was dismissed by this Tribunal vide order dated 03.02.2023. Order of this

Tribunal dated 03.02.2023 was also questioned by a Civil Appeal

13873/2023 before the Hon'ble Supreme Court which was also dismissed

by the Hon'ble Supreme Court by its order and judgment dated 07th

August, 2023.

5. The Application which was filed by Respondent No. 1 for substituting

its name in place of the Resolution Professional came to be allowed by the

Impugned Order substituting name of the Respondent No. 1 the Successful

Auction Purchaser which order is under challenge in this Appeal.

6. We have heard Mr. Siddharth Yadav, Sr. Advocate appearing for the

Appellant and Mr. Krishnendu Datta, Sr. Advocate appearing for the

Respondents. Appellant as well as Respondents have filed Compilation of

Judgments and Orders which were taken on record.

7. Learned Sr. Counsel for the Appellant challenging the Order

impugned contends that Successful Auction Purchaser cannot be allowed

to pursue the avoidance application which is not in accordance with the

scheme of IBC and the Regulation framed thereunder. It is further

Company Appeal (AT) (Insolvency) No. 1177/2023 -5-

submitted that IBC as well as Regulations provide only the Resolution

Professional and Liquidator to prosecute the avoidance application,

avoidance application cannot be allowed to be prosecuted by Successful

Auction Purchaser, permitting to pursue the application by a Successful

Auction Purchaser is unjust enrichment which is not permissible, the

benefit arising out of avoidance application cannot be available to

Successful Auction Purchaser. It is submitted that the order passed by the

Adjudicating Authority is unreasoned order and deserves to be set aside on

this ground alone. It is further submitted that issue which is involved in the

present case is pending before the Hon'ble Supreme Court in C.A. No.

1632-1634 of 2022, "Piramal Capital and Housing Finance Limited Vs.

63 Moons Technologies Limited".

8. Learned Sr. Counsel for the Respondents refuting the submissions of

Learned Sr. Counsel for the Appellant submits that Appellant as

Suspended Director has no locus to challenge the Impugned Order by

which order only permitted the substitution of Respondent No. 1 in place of

Resolution Professional who had earlier filed the avoidance application. It is

submitted that the Appellant by several proceedings have been challenging

every stage of liquidation which challenge were repelled upto the Hon'ble

Supreme Court and the Appellant cannot be said to be aggrieved by the

Order by which Respondent No. 1 has been substituted in place of

Resolution Professional to prosecute the avoidance application. It is

submitted that acquisition plan itself contemplated that Successful Auction

Purchaser shall pursue the avoidance application after approval of the

Company Appeal (AT) (Insolvency) No. 1177/2023 -6-

acquisition plan, the order approving the acquisition plan dated 11th May,

2022 was challenged by the Appellant before this Tribunal as well as before

the Hon'ble Supreme Court which all were dismissed hence the provision of

acquisition plan permitting Respondent No. 1 to prosecute the avoidance

application has become final and cannot be questioned. It is submitted that

the Appellant is Respondent in avoidance application. It is submitted that

the Judgment of this Tribunal in '63 Moons Technologies Ltd.' which is

pending consideration before the Hon'ble Supreme Court arose out of

approval of the resolution plan and the issue which is sought to be raised

in this Appeal is not involved in the said Judgment hence the pendency of

Civil Appeal 1632-1634 of 2022 before the Hon'ble Supreme Court has no

relevance in the present case.

9. We have considered the submissions of Learned Sr. Counsel for the

parties and have perused the record. We have also perused the Judgments

and Orders which were brought on record by both the parties by their

respective compilation of judgments.

10. The Appellant who is ex-promoter of the Corporate Debtor has

submitted a Resolution Plan in Corporate Insolvency Resolution Process

and was declared ineligible by the Resolution Professional which order was

upheld by the Adjudicating Authority by its order dated 02nd April, 2019

which order was affirmed by the Appellate Tribunal on 31st October, 2019.

In the Liquidation Proceedings also, the Appellant has challenged the order

approving the acquisition plan order dated 11th May, 2022. Before the

Adjudicating Authority, the Appellant has also filed an application to

Company Appeal (AT) (Insolvency) No. 1177/2023 -7-

oppose the acquisition plan. In the Liquidation Proceedings also, the EoI

submitted at the instance of the promoter was not accepted and further the

highest bid submitted by Respondent No. 2 to 5 was accepted. In the

Application filed by the Liquidator to approve the e-auction in favour of

Respondent No 2 to 5, Appellant also filed an application praying for

rejection of the Application. In the said proceedings, the Adjudicating

Authority had made following observations:

"In any event, we find that the ex-promoter has no locus standi to participate or agitate in this proceeding or submit a settlement proposal at this stage, in view of the finding of this Adjudicating Authority, Hon'ble NCLAT and Hon'ble Supreme Court, wherein it was held that, the ex-promoter has become ineligible in terms of Section 29A(h) of the Code as well as proviso to sub section (f) of Section 35 of the Code."

11. In the Appeal itself, the Appellant has come up with the case that in

the acquisition plan, it was successful auction purchaser who was to get

the benefit of avoidance application. In the Appeal in paragraph 9.8,

following grounds have been urged by the Appellant:

"9.8 BECAUSE in the Acquisition Plan, which was approved by the Hon'ble NCLT, specific provision was made by the Auction Purchasers to grab the proceeds from pending applications relating to preferential transactions which is in the teeth of the intent and objects of the Code as the benefit ought to go to the CoC."

12. The Appellant's case itself in the Appeal is that Successful Auction

Purchaser under the acquisition plan has been provided to take benefit of

Company Appeal (AT) (Insolvency) No. 1177/2023 -8-

avoidance application. When the acquisition plan submitted by the

Respondent No. 2 to 5 has been approved by the Adjudicating Authority

and the Appeal filed by the Appellant before this Tribunal as well as before

the Hon'ble Supreme Court has been dismissed as noticed above, we fail to

see how the Appellant can now challenge the application filed by the

Successful Auction Purchases by which Respondent No. 1 had prayed for

substituting the name of Respondent No. 1 in place of Resolution

Professional who has earlier filed the avoidance application.

13. Learned Counsel for the Appellant submitted that under the scheme

of Code it is the liquidator and resolution professional who are entitled to

prosecute the application. When we look into the provisions of the Code,

Section 43, 45, 46, it is clear that it is the Resolution Professional or

Liquidator who are empowered to come to opinion and file an application

for avoidance of the transaction. In the present case, it is admitted fact that

avoidance application was filed by the Resolution Professional. Learned

Counsel for the Appellant has referred to Section 36(3)(f) of the Code which

provides for liquidation assets. Section 36(1)(2)(3)(f) is as follows:

"36. (1) For the purposes of liquidation, the liquidator shall form an estate of the assets mentioned in sub-section (3), which will be called the liquidation estate in relation to the corporate debtor.

(2) The liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors. (3) Subject to sub-section (4), the liquidation estate shall comprise all liquidation estate assets which shall include the following:-

Company Appeal (AT) (Insolvency) No. 1177/2023 -9-

.....

(f) any assets or their value recovered through proceedings for avoidance of transactions in accordance with this Chapter;"

14. The above provision makes it clear that any assets or their value

recovered through proceedings for avoidance of transactions shall form the

liquidation estate. There can be no dispute to this legal position that

proceeds of the avoidance application are part of the liquidation estate.

15. The question which has been raised by the Appellant in the present

case is as to whether the Successful Auction Purchaser can prosecute the

avoidance application after approval of the acquisition plan. There is no

issue that proceeds out of avoidance application are not part of Liquidation

Estate.

16. Learned Counsel for the Appellant has also relied on regulation 44A

of IBBI (Liquidation Process) Regulation, 2016. Regulation 44A has been

inserted by notification dated 16th September, 2022. Regulation 44A is as

follows:

"44A Treatment of avoidance of transaction. The liquidator shall, on the advice of the consultation committee, provide in the application along with the final report filed under regulation 45 for the manner in which proceedings in respect of avoidance transactions, if any, under Chapter III or fraudulent or wrongful trading under Chapter VI of Part II of the Code, will be pursued after the dissolution or closure of liquidation process and the manner in which the proceeds, if any, from such proceedings shall be distributed."

Company Appeal (AT) (Insolvency) No. 1177/2023 -10-

17. The Regulation 44A deals with treatment of transaction avoidance

which itself contemplates that there can be a position regarding

prosecution of avoidance application even after resolution or closure of

liquidation process and the manner in which the proceeds, if any, from

such proceedings shall be distributed. Regulation 44A relied on by Learned

Counsel for the Appellant does not support his submission that avoidance

application cannot be pursued by Successful Auction Purchaser.

18. Learned counsel for the Appellant has also relied on Insolvency Law

Committee Report submitted on 20th February, 2020. Appellant has relied

on Chapter III of the Report containing the Heading "Chapter 3:

Recommendations regarding actions against avoidance transactions and

improper trading in the Corporate Insolvency Resolution and Liquidation

Process."

19. Paragraph 2 of the Report deals with filing of application to avoid

transaction application etc. Paragraph 2.1, 2.2, 2.3 and 2.4 is as follows:

"2. FILING OF APPLICATIONS TO AVOID TRANSACTIONS, ETC.

2.1. The Code currently allows only the insolvency professional to file applications against improper trading or to avoid transactions, other than in the case of undervalued transactions, in which case applications may also be filed by a creditor, member or partner of the corporate debtor if the resolution professional or liquidator fails to do so. There may be scenarios where the insolvency professional fails to file these applications actions due to reasons like lack of time, lack of funding, etc.

Company Appeal (AT) (Insolvency) No. 1177/2023 -11-

2.2. Various jurisdictions adopt distinct approaches regarding the right to file such applications. For instance, some jurisdictions solely allow the insolvency practitioner to file such actions whereas other jurisdictions also allow creditors to file. This is evident from the discussion in the UNCITRAL Guide captured below:

"Where the insolvency representative has the sole power to commence avoidance proceedings and, based on the balance of the considerations discussed above (i.e. for reasons other than negligence, bad faith or omission), decides not to commence proceedings in respect of certain transactions, insolvency laws adopt different approaches to the conduct and funding of those proceedings... As to the conduct of those proceedings, some laws permit a creditor or the creditor committee to require the insolvency representative to initiate an avoidance proceeding where it appears to be beneficial to the estate to do so or also permit a creditor itself or the creditor committee to commence proceedings to avoid these transactions, where other creditors agree."

(Emphasis Supplied) 2.3. In light of the above, the Committee discussed that it may be beneficial to allow creditors (individual or in groups) and the CoC to file applications in case the insolvency professional fails to do so. In this regard, creditors should first approach the resolution professional or the liquidator to file an application. After this, if the resolution professional or liquidator then fails to file an application, then the creditor or the CoC may file the application itself.

Company Appeal (AT) (Insolvency) No. 1177/2023 -12-

2.4. The Committee also considered if the successful resolution applicant should be permitted to file such applications. However, it was agreed that this would possibly result in the resolution applicant being entitled to a return that was not factored in at the time of submitting their bid. Therefore, the Committee decided that the resolution applicant should not be permitted to file applications against improper trading or applications to avoid transactions."

20. The above report only provides that in event the Resolution

Professional or Liquidator fail to file the avoidance application, the

application can be filed by the creditors or the CoC. The report further

stated that Successful Resolution Applicant cannot be allowed to file

avoidance application. There cannot be any quarrel to the

recommendations made in the Report. In the present case it is not a case

that avoidance application has been filed by the Successful Auction

Purchaser. The Applications were filed by the Resolution Professional well

within time hence the above report does not in any manner help the

Appellant.

21. In the present case, we are concerned with the only issue as to

whether Successful Auction Purchaser can pursue the avoidance

application. The question as to whether the Successful Resolution

Applicant can be allowed to prosecute the application came for

consideration before this Tribunal in C.A.(AT) Ins. No. 437 of 2023, Kapil

Wadhawan Vs. Piramal Capital & Housing Finance Ltd. & Ors. 2023

SCC OnLine Nclat 228. In the above case also, Successful Resolution

Company Appeal (AT) (Insolvency) No. 1177/2023 -13-

Applicant filed an application for substituting its name in place of

Administrator/Resolution Professional which was allowed by the

Adjudicating Authority. The Suspended Director of the Corporate Debtor

had challenged the Order in this Tribunal. This Tribunal after considering

the respective submissions, provisions of the Code as well as Regulations

and the Judgment of Delhi High Court in TATA Steel BSL Limited Vs.

Venus Recruiter Pvt. Ltd., 2023 1 HCC DEL 301 laid down following in

paragraph 21 and 26:

"21. Another submission which has been pressed by the learned Counsel for the Appellant is that Successful Resolution Applicant cannot pursue the avoidance applications and if at all, the avoidance applications can be pursued, it could have been only by the RP and that in the present case the Administrator. It is submitted that RP is persona designate, whose jurisdiction cannot be delegated to any other person. The present is not a case where Successful Resolution Applicant is exercising any delegated powers of RP/ Administrator. In the present case, Resolution Plan envisages and specifically provides for pursuing of the applications by the Successful Resolution Applicant. The Successful Resolution Applicant is not exercising any delegated powers of RP, hence, the argument that RP being persona designate, has no relevance in the present case. The Adjudicating Authority in the present case has substituted the Piramal - Successful Resolution Applicant relying on provisions of the Resolution Plan. The Adjudicating Authority while approving the Resolution Plan vide its order dated 07.06.2021 has noted the provisions of the Plan, which

Company Appeal (AT) (Insolvency) No. 1177/2023 -14-

empowers the Resolution Applicant to pursue the avoidance application. In order passed by the Adjudicating Authority dated 07.06.2021, following has been stated:

"i. Under Section 2.13.2 of Part A of the Resolution Plan, the Successful Resolution Applicant has provided that it intends to pursue, on a best efforts basis, the application(s) filed by the Administrator before this Hon'ble Tribunal in respect of these Avoidance Transactions (as defined in the Resolution Plan). Any positive monetary recovery received by the Corporate Debtor as a result of orders passed in relation to the Avoidance Transactions hall be distributed, net of costs and expenses (including taxes), to the Financial Creditor pro rata to the extent the Financial Debt for Financial Creditors, provided that, the CoC may in its discretion adopt a different manner of distribution (which may take into account the order of priority amongst Financial Creditors as laid down in Section 53(1) of the Code) and such decision of the CoC shall be accepted by the Successful Resolution Applicant, subject to there being no change in the Total Resolution Amount.

ii. Under Section 2.13.3 of Part A of the Resolution Plan, the Successful Resolution Applicant ascribes value of INR 1 in respect of any transactions that may be avoided/ set aside by this Hon'ble Tribunal in terms of Section 66 of the Code. Accordingly, any positive recovery as a result of reversal of transactions avoided or set aside by this Hon'ble Tribunal in terms of Section 66 of the Code would accrue to the sol benefit of the Successful Resolution Applicant. All the costs and expenses incurred or to

Company Appeal (AT) (Insolvency) No. 1177/2023 -15-

be incurred towards litigation pertaining to Section 66 of the Code shall be to the account of the Successful Resolution Applicant."

"26. As noted above, the present Appeals have been filed by the Ex- Promoter of the Dewan Housing Finance Corporation Finance Limited and allegation regarding fraudulent transactions were against the Ex- Promoters including the Appellant. The object of continuing the avoidance applications, even after the CIRP is the discovery of dubious transactions and permitting such preferential undervalued and fraudulent transactions to continue, will be depriving the benefit of such transactions to the creditors, which is not the intent of the statutory scheme. The submission advanced on behalf of Union of India questioning the interpretation of learned single Judge in Venus Recruiter Pvt. Ltd. was accepted by the Division Bench and in paragraph 89 of the judgment, following has been observed:

"89. The concern of Union of India is that if the interpretation of the learned Single Judge is accepted then persons who were responsible for the corporate debtor to go into liquidation because of unscrupulous transactions will get away with their deeds. The submission that the scheme of IBC is not purely commercial in nature and the purpose of the Act which is also to ensure that public money is brought back into the system is not unfounded.""

22. It is to be noted that against the order of this tribunal dated 15th

May, 2023, Civil Appeal has been filed being Civil Appeal vide diary no.

25822 of 2023 where Hon'ble Supreme Court on 06.09.2023 passed

following order:

Company Appeal (AT) (Insolvency) No. 1177/2023 -16-

"Delay in re-filing is condoned.

Our attention is drawn to the orders dated 07.07.2023 and 14.08.2023 passed in SLP (C) Nos.

10331-10332/2023 titled "Tata Steel Ltd. v. Venus Recruiter Private Limited & Ors." and in SLP (C) D. No. 15256/2023 titled "Venus Recruiter Private Limited v. Tata Steel BSL Limited & Ors.", respectively.

Issue notice and tag with SLP (C) Nos. 10331- 10332/2023 and SLP (C) D. No. 15256/2023.

Ms. Chitra Rentala, learned counsel, who is present in Court on advance notice/caveat, waives service and accepts notice on behalf of the respondent No.1 - Piramal Capital and Housing Finance Limited.

Notice will be served by all modes, including dasti, to all unrepresented respondents on steps being taken within a period of ten days from today.

Notwithstanding pendency of the present appeal, proceedings under Sections 43 to 66 of the Insolvency and Bankruptcy Code, 2016 can continue."

23. The Judgment of this Tribunal dated 15th May, 2023 thus has not

been stayed rather the Hon'ble Supreme Court has permitted the

Application under Section 43 and 46 to go on.

24. The Judgment of this Tribunal in "Kapil Wadhawan" has categorically

held that Successful Resolution Applicant can be allowed to prosecute the

avoidance application, the same analogy shall be applicable with regard to

prosecution by the Successful Auction Purchaser in liquidation estate when

the asset of the corporate debtor has been sold as a going concern and

acquisition plan submitted by Successful Auction Purchaser has been

approved by the Adjudicating Authority. We have already noticed that in

Company Appeal (AT) (Insolvency) No. 1177/2023 -17-

the acquisition plan it is Successful Auction Purchaser who has been

provided to take benefit of avoidance application which approval has

become final.

25. Learned Counsel for the Appellant has further contended that order

impugned does not contain any reason hence the said order deserves to be

set aside on this ground alone. Learned Counsel for the Appellant has

placed reliance on Judgment 2010 4 SCC 785, Assistant Commissioner,

Commercial Tax Department, Works Contract and Leasing Kota Vs.

Shukla and Brothers. Hon'ble Supreme Court in the said judgment has

held that order passed by the administrative body and tribunals must

contain a reason. In paragraph 10 to 12 of the judgment, following has

been laid down:

"10. The increasing institution of cases in all Courts in India and its resultant burden upon the Courts has invited attention of all concerned in the justice administration system. Despite heavy quantum of cases in Courts, in our view, it would neither be permissible nor possible to state as a principle of law, that while exercising power of judicial review on administrative action and more particularly judgment of courts in appeal before the higher Court, providing of reasons can never be dispensed with. The doctrine of audi alteram partem has three basic essentials. Firstly, a person against whom an order is required to be passed or whose rights are likely to be affected adversely must be granted an opportunity of being heard. Secondly, the concerned authority should provide a fair and transparent procedure and lastly, the authority concerned must apply its mind and dispose of

Company Appeal (AT) (Insolvency) No. 1177/2023 -18-

the matter by a reasoned or speaking order. This has been uniformly applied by courts in India and abroad.

11. The Supreme Court in the case of S.N. Mukherjee v. Union of India [JT 1990 (3) SC 630: 1990 (4) SCC 594], while referring to the practice adopted and insistence placed by the Courts in United States, emphasized the importance of recording of reasons for decisions by the administrative authorities and tribunals. It said 'administrative process will best be vindicated by clarity in its exercise'. To enable the Courts to exercise the power of review in consonance with settled principles, the authorities are advised of the considerations underlining the action under review. This Court with approval stated:

"11......the orderly functioning of the process of review requires that the grounds upon which the administrative agency acted be clearly disclosed and adequately sustained."

12. In exercise of the power of judicial review, the concept of reasoned orders/actions has been enforced equally by the foreign courts as by the courts in India. The administrative authority and tribunals are obliged to give reasons, absence whereof could render the order liable to judicial chastise. Thus, it will not be far from absolute principle of law that the Courts should record reasons for its conclusions to enable the appellate or higher Courts to exercise their jurisdiction appropriately and in accordance with law. It is the reasoning alone, that can enable a higher or an appellate court to appreciate the controversy in issue in its correct perspective and to hold whether the reasoning recorded by the Court whose order is impugned, is sustainable in law and whether it has adopted the correct legal approach. To sub-serve the purpose of justice

Company Appeal (AT) (Insolvency) No. 1177/2023 -19-

delivery system, therefore, it is essential that the Courts should record reasons for its conclusions, whether disposing of the case at admission stage or after regular hearing."

26. There can be no dispute to the preposition laid down by the Hon'ble

Supreme Court in the above case. In the present case, the Adjudicating

Authority while allowing the application has observed "in view of the

averments made, the prayer is allowed and I.A. No. 4660 of 2022 stands

disposed of". The application which was filed by the Respondent No. 1 being

I.A. No. 4660 of 2022 contained the facts and earlier orders, the application

being 4660 of 2022 was a consequential application to substitute the name

of Respondent No. 1 in place of Resolution Professional to prosecute the

avoidance application. The acquisition plan which contained the provision

that Successful Auction Purchaser shall pursue the Application has already

been approved. We have to look into the earlier proceedings as noted above

along with the order dated 01st May, 2023 to find out the reasons for

allowing the Application to substitute the name of Respondent No. 1. It is

true that when we look into the order dated 01st May, 2023, no detailed

reasons are contained but since the Adjudicating Authority has referred to

the averments made in the Application and as observed above the

Application was only for substitution, we are of the view that order dated

01st May, 2023 cannot be interfered with in this Appeal on the above

ground.

27. Lastly, learned counsel for the Appellant has submitted that issue

raised in this Appeal is pending before the Hon'ble Supreme Court in Civil

Company Appeal (AT) (Insolvency) No. 1177/2023 -20-

Appeal No. 1632-1634 of 2022, Piramal Capital and Housing Finance

Limited Vs. 63 Moons Technologies Limited. The Judgment of this

Tribunal in 63 Moons Technologies Ltd. has been brought on record by the

Appellant in its Compilation which is a judgment of this tribunal in C.A.(AT)

Ins. No. 454 of 2021, "63 Moons Technologies Ltd. Vs. The Administrator of

Dewan Housing Finance Corporation Limited and Ors.". The said appeal

was filed against order dated 07th June, 2021 where the Adjudicating

Authority had passed an order with regard to Resolution Plan. This

Tribunal ultimately in the said order allowed the Appeal and Resolution

Plan was sent back to the CoC for reconsideration in the Appeal. Order

permitting SRA to appropriate recoveries was set aside. Against the said

order, the Civil Appeal No. 1632-1634 of 2022 was filed before the Hon'ble

Supreme Court where Hon'ble Supreme Court has passed an order on 11th

April, 2022 staying the operation of the Impugned Order of NCLAT. Hon'ble

Supreme Court has passed following order:

"C.A. Nos. 1632-1634/2022, C.A. Nos. 1707-1712/2022, D.NO. 6667/2022 & C.A. No. 2567 of 2022

1. Heard learned senior counsel for the parties.

2. The application for permission to file the appeal is allowed.

3. Admit.

4. List these matters on 10.05.2022 for final disposal.

5. In the meantime, operation of the impugned order passed by the National Company Law Appellate Tribunal shall remain stayed.

6. The parties are directed to complete the pleadings and file compilation of relevant documents, in the meanwhile."

Company Appeal (AT) (Insolvency) No. 1177/2023 -21-

28. The issue as to whether the Successful Auction Purchaser can

prosecute the avoidance application in place of Resolution Professional by

substituting its name was not subject matter of the issue in the aforesaid

case of 63 Moons Technologies Ltd. hence we are of the view that on the

ground that civil appeal is pending before the Hon'ble Supreme Court,

hearing of the matter need not be deferred.

29. In view of the fore-going discussions, we are of the view that no

grounds have been made out at the instance of the Appellant to interfere

with the order impugned. The Appeal is devoid of any merit and the same is

dismissed, accordingly.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

New Delhi 10th November, 2023

Basant B.

Company Appeal (AT) (Insolvency) No. 1177/2023