Laxmi Ventures (India) Ltd vs State Bank Of India & Ors

Laxmi Ventures (India) Ltd. ...Appellant

Versus

State Bank of India & Ors. ...Respondents

Present:

For Appellant : Mr. Moiz K. Rafique, Advocate

For Respondents : Mr. Navid Memon, Advocate for 1st Respondent Mr. Kunal Tandon, Mr. Manan Jaiswal, Mr. Mayank Kshirsagar, Mr. Parathasarathy Bose and Ms. Richa Sandilya, Advocates

ORDER

17.02.2020 The 'State Bank of India' moved an application under Section

7 of the 'Insolvency and Bankruptcy Code, 2016' ('I&B Code', for short) for

initiation of the 'Corporate Insolvency Resolution Process' against 'Laxmi

Ventures (India) Limited' (Appellant - Corporate Debtor). Before the admission

of the application under Section 7 of the 'I&B Code', the 'Corporate Debtor'

settled the matter with the 'State Bank of India' and when the matter was

brought to the notice of the Adjudicating Authority (National Company Law

Tribunal), Mumbai Bench, Mumbai, 'I.A. No. 149/2020' was filed by one Mr.

Sunil Agarwal and Ors.', who claimed to be 50% shareholders of the 'Corporate

Debtor'. The Adjudicating Authority (National Company Law Tribunal), Mumbai

Bench while rightly rejected the intervention application observed as follows: 2

1. IA 149/2020 I C.P. (IB)-3307 (MB)/2019 is taken up for

hearing. This is an Interlocutory Application filed by Mr.

Sunil Agarwal & Others who were stated to be 50%

shareholders of the Corporate Debtor.

2. The prayer made in the IA is for direction to the Financial

Creditor or to the Corporate Debtor to furnish a copy of the

OTS proposal made by the Corporate Debtor along with

various submissions made by the Corporate Debtor to the

Financial Creditor from time to time and further to allow

the Applicants to intervene and implead themselves in the

main CP 3307/2019. Ld. Counsel for the Applicants

places reliance on an order dated 26.04.2012 passed by

the Hon'ble Bombay High Court in "Sunil Agarwal and

Others vs. Laxmi Ventures (India) Limited & Others"

which reads as follows:

(i) The Appellants shall continue to work at the Bhilai

unit and the Respondents shall not interfere with the

same save and excerpt that the nominee of the

Respondents Mr. Rakesh Mourya (G.M. Technical)

shall be posted at the Bhilai Unit, as Observer, who

will only make a note of the day to day activities

carried out at the said Unit pertaining to production

and compliance of the statutory provisions by the

said Unit. However, the information noted by the

nominee shall not be used by the Company before

Company Appeal (AT) (Insolvency) No. 273 of 2020 3

any authorities and shall be produced before this

Court on the next date of hearing.

(ii) The Appellants shall maintain accounts and shall

produce the same before this Court on the next date

of hearing along with the books of accounts and

bank records from the year 2002 onwards.

(iii) The company Application is accordingly disposed of.

(iv) Place the Company Petition for hearing and final

disposal on 6th July, 2012."

3. This Bench is of the view that the order of the Hon'ble

Bombay High Court is to enable the Applicants to continue

to work at the Bhilai Unit and to injunct the Respondents

in that Appeal from interfering with them. In terms of the

submission made by the Ld. Counsel for the Applicants

herein, this Bench feels that no harm will be caused if the

Financial Creditor and the Corporate Debtor share copies

of the OTS proposal and its acceptance with the Applicants

in IA 149/2020, since the matter pertaining to his

shareholding is being considered by the Hon'ble Bombay

High Court. We direct accordingly. The same shall be

shared within seven days from today. Prayer (b) at page

of the Application is, therefore, partly allowed to that

extent.

Company Appeal (AT) (Insolvency) No. 273 of 2020 4

4. Further, we are not convinced at this stage that the

Applicants have made out a case to intervene in the main

CP and hence prayer (a) at page 9 of the IA is allowed.

5. I.A. No. 149/2020 in C.P. (IB)- 3307(MB)/2019 is

disposed of accordingly."

Mr. Navid Memon, learned counsel appearing on behalf of 'State Bank of

India' submits that 'one time settlement' has already been reached and 'no due

certificate' has also been issued on 1st February, 2020.

Mr. Kunal Tandon, learned counsel appears on behalf of the Intervenors

(Respondent Nos. 2, 3 and 4 - Mr. Sunil Agarwal and Others) and we intend to

know the reasons for their intervention as the application filed under Section 7

of the 'I&B Code has become infructuous because of the settlement reached

between the parties. He submits that the 'Intervenors' - Respondents, are 50%

shareholders of the 'Corporate Debtor' who want to know whether the amount

has been settled by selling the assets of the Bhilai Unit. Learned counsel

appearing on behalf of the Appellant opposes such prayer in view of the fact that

the Bhilai Unit has not been sold. However, we are not inclined to give any

finding on the question as to whether any assets have been sold or not. If any

shareholder has any dispute with the other shareholder, it will be open to him

to move before the appropriate forum but he cannot intervene in the application

filed under Section 7 which is now not maintainable.

For the reason aforesaid, we set aside the impugned order so far as it

relates to observations at paragraph 3 of the impugned order dated 29th January,

2020. The application under section 7 filed by the State Bank of India stands

withdrawn. The Adjudicating Authority (National Company Law Tribunal),

Company Appeal (AT) (Insolvency) No. 273 of 2020 5

Mumbai Bench will close the proceedings. We make it clear that the order

passed by the Adjudicating Authority (National Company Law Tribunal) or by

this Appellate Tribunal will not come in the way of the intervenor/Respondents

to move before the appropriate forum for appropriate relief, if they are aggrieved.

The appeal stands disposed of. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/rr/

Company Appeal (AT) (Insolvency) No. 273 of 2020