M/S Umesh Suppliers Private Limited vs Mr. Vijay P. Lulla And Ors

Company Appeal (AT) (Ins.) No. 542 of 2022 IN THE MATTER OF: Umesh Suppliers Pvt. Ltd. ....Appellant Vs.

Vijay P. Lulla ....Respondents Resolution Professional of Ahinsa Buildtech Pvt. Ltd. & Ors.

Present: For Appellant: Mr. Arun Kathpalia, Sr. Advocate with Mr. Tishampati Sen, Mr. G. Karthikeyan, Ms. Riddhi Sancheti, Mr. Anurag Anand and Mr. Kshitij Wadhwa, Advocates. For Respondents: Mr. Anuj Tiwari, Mr. Saurabh Mishra, Ms. Tuhina Misra and Mr. Nikhil Anand for R-1/RP. Ms. Pratiksha Sharma, Mr. Ankit Acharya and Mueed Shah, Advocates for R-2. Ms. Anjali Sharma, Mr. Devarajan Raman and Mr. Gopalan, Advocates for R-4.

ORDER

07.09.2022: Heard Counsel for the parties. This appeal has been filed

against the order dated 24.03.2022 passed by the Adjudicating Authority

(National Company Law Tribunal, Mumbai, Court No. V) in I.A. No. 1729 of

2021 read with I.A. No. 13 of 2022.

2. I.A. No. 1729 of 2021 was filed by Resolution Professional, seeking

adjudication of claim of 'Umesh Suppliers Pvt. Ltd.' (Appellant herein).

Following prayers were made in the application:

"a. The Hon'ble Adjudicating Authority be pleased to examine the contents of the present Application, the claims submitted by the

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Respondent No. 1 USPL, the reports submitted by Mr. Vivek Thar, Thar and Company, the explanations and documents submitted by Respondent Nos. 1 and 4 and/ or call for any other relevant information as may be necessary to determine the status of the claim of Respondent No. 1 USPL in relation to the Corporate Insolvency Resolution Process of the Corporate Debtor Ahinsa Buildtech Pvt. Ltd. and after examining the same be pleased to issue appropriate directions to the Applicant with regards to the treatment of the said claim;"

3. I.A. No. 13 of 2022 was filed by the Appellant where following prayers

have been made:

"a. That this Hon'ble Tribunal be pleased to direct Respondent to admit the Applicant's Claim amounting Rs. 24,50,00,000/- as a Financial Debt in the CIRP of the Corporate Debtor and the Applicant be granted recognition as a Home Buyer/ Financial Creditor of the Corporate Debtor;

b. that pending the hearing and final disposal of this Application, this Hon'ble Tribunal be pleased to order and restrain the Respondent and COC from accepting any Resolution Plan and/or approve liquidation and/or stay the CIRP process of the Corporate Debtor;

c. that pending the hearing and final disposal of this Application, this Hon'ble Tribunal be pleased to order and direct Respondent to update the Information Memorandum/ List of Creditors/ Data Room etc. so as to reflect the Applicant's Claim amounting Rs. 24,50,00,000/- as a Financial Debt in the CIRP of the Corporate Debtor and the Applicant as a Home Buyer/ Financial Creditor of the Corporate Debtor

d. that pending the hearing and final disposal of this Application, this Hon'ble Tribunal be pleased to order and direct the Respondent to provide the Applicant with copies of all minutes of the COC Meetings of the Corporate Debtor; and

e. That this Hon'ble Tribunal be pleased to pass such and other further orders as this Hon'ble Tribunal may deem fit and proper."

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4. Both the applications by the impugned order have been disposed of.

By disposing of I.A. No. 1729 of 2021 Adjudicating Authority has issued

direction that 'Umesh Suppliers Pvt. Ltd.' is a related party.

5. Mr. Arun Kathpalia, Learned Senior Counsel for the Appellant

challenging the order contends that although the order runs in 22 paragraphs,

no reasons have been recorded to hold the Appellants as a related party and

I.A. No. 13 of 2022 has been dismissed. Mr. Arun Kathpalia, Learned Senior

Counsel for the Appellant submits that firstly the Resolution Professional ought

not to have filed the application invoking any advisory jurisdiction of the

Adjudicating Authority.

6. Resolution Professional having admitted the claim of the Appellant there

was no occasion to ask for any adjudication by the Adjudicating Authority.

7. He further submits that in any view of the matter the Adjudicating

Authority has not given any reason or any consideration of any of the materials

which were on the record while deciding both the applications. He submits that

only conclusions has been given in para 21 of the order which conclusions

have been arrived at without adverting to any materials on the record including

the transaction audit report which contained so many caveats in the report

itself.

8. The submission of the Appellant is that the financial debt was owed to

the Corporate Debtor on account of amount of Rs. 24.5 crores which was

issued for purposes of issuing convertible debentures which was never issued Company Appeal (AT) (Ins.) No. 542 of 2022 4

to the Appellant and in view of which subsequently the allotment letters were

issued for flats.

9. He submits that the nature of the claim of the Appellant has not been

considered by the Adjudicating Authority nor any reasons have been given as

to why the Appellant has been held to be related party.

10. Counsel for the Respondent submits that although there are no detailed

reasons in the order but there was relevant materials on the record to indicate

that Appellant cannot be accepted as a Home Buyer and further he was a

related party.

11. Para 21 of the order records following:

"Given the conspectus of the facts and law placed for consideration

before us namely the transaction audit report, which indicate that Umesh

Suppliers Pvt. Ltd. is a related party to the Corporate Debtor and the

letter dated 15.06.2010 issued by Umesh Suppliers Pvt. Ltd. which

clearly indicates that an amount of Rs. 20 crores was paid towards

Optionally Compulsory Debentures and an amount of further would be

paid is Rs. 30 crores towards the said Orbit Residency Park, this Bench

has no hesitation to conclude that Umesh Suppliers Pvt. Ltd. is a related

party and that the amounts lent by Umesh Suppliers Pvt. Ltd. is to be

considered as "other debt"."

12. After having considered the respective submission of the counsel for the

parties and after going into the orders passed by Adjudicating Authority, we are

Company Appeal (AT) (Ins.) No. 542 of 2022 5

of the view that there are no reasons for the conclusion arrived in Para 21 & 22

by the Adjudicating Authority.

13. There has been no consideration of the nature of the claim of the

Appellant nor any reasons have been given as to why the Appellant has been

treated as a related party.

14. Although Ld. Counsels for the parties have also tried to advance their

submissions on merits but in view of the fact that Adjudicating Authority has

not given any reasons and has passed an order without consideration of

relevant materials, we are of the view that ends of justice be served in remitting

the matter to the Adjudicating Authority for passing a fresh order on both the

applications I.A. No. 1729 of 2021 and I.A. No. 13 of 2022.

15. We make it clear that we are not expressing any opinion on merits of the

either of the party and it is for the Adjudicating Authority to consider and pass

a fresh order on both these applications in accordance with law.

16. While entertaining this Appeal we had passed interim order on

17.05.2022 which order is to the following:

"Issue notice. Shri Arun Kathpalia, learned counsel appearing for the Appellant submits that the amount paid by the Appellant is not an issue and on the finding by the Adjudicating Authority that Appellant is a related party, his claim has been put as "other debt". He submits that the consequence of the order is that he will lose his right on 27 flats for which advance amount was taken.

Learned counsel for the Home Buyers oppose the submission of counsel for the Appellant and submits that Appellant being a related party was not eligible to be allotted any flats, hence, the order passed

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by the Adjudicating Authority is correct and based on forensic reports which were relied by the Adjudicating Authority.

Learned counsel appearing for the Successful Resolution Applicant submits that the plan is under implementation. He submits that as per the plan if any allottee makes payments which are liable to be made then only claim for allotment can be considered.

The issue in this Appeal is as to whether the Appellant is allotee of 27 flats as against which advance payments were made, needs further consideration. However we permit the Appellant to make payment of balance amount as per the plan after due intimation by the Resolution Applicant, which shall be kept in a separate account by the Respondent and allotment to any other person shall not be made in respect to those 27 flats, for which appropriate decision shall be taken at the time of final disposal of the Appeal.

Respondents may file their Reply within two weeks. Rejoinder be filed within two weeks thereafter.

List this Appeal on 11.07.2022."

17. The protection which was granted to the Appellant shall continue till

both the aforesaid I.A.s are disposed of. Looking to the nature of issue in these

applications, we are of the view that plan being under implementation, the

Adjudicating Authority shall endeavour to dispose of the applications as early

as possible. In result, the impugned order dated 24.03.2022 is set aside and

the appeal is disposed of with the directions as above.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) sa/nn

Company Appeal (AT) (Ins.) No. 542 of 2022