Mr. Piyush vs Reliance Commercial Finance Ltd. & ...

Reliance Commercial Finance Ltd. & another ...Respondents

Present: For Appellant : Shri Aok Dhar, Ms. Varsha Banerjee, Shri Milan Singh Negi and Shri Kunal Godhwani, Advocates

For Respondent Though present name not given

ORDER

13.12.2017 This appeal has been preferred by the appellant, the

authorised signatory of the suspended Board of Directors of Maharashtra Vidyut

Nigam Pvt. Ltd. (Corporate Debtor) against order dated 4th August, 2017 passed

by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench,

Mumbai in C.P. No. 1140/I&BP/NCLT/MB/MAH/2017 whereby and

whereunder the application preferred by the respondent - 'Reliance Commercial

Finance Limited' (Financial Creditor) under Section 7 of the Insolvency and

Bankruptcy Code, 2016 (hereinafter referred to as the 'I&B Code') has been

admitted, order of moratorium has been passed and the Interim Resolution

Professional has been appointed.

2. Learned counsel appearing on behalf of the appellant submits that the

impugned order dated 4th August, 2017 has been passed in violation of rules of

Company Appeal (AT) (Insolvency) No. 191 of 2017 1 natural justice and against the decision of this Appellate Tribunal in the matter

of "Innoventive Industries Limited vs. ICICI Bank & Anr. - Company Appeal (AT)

Nos. 1 & 2 of 2017". Before passing the impugned order dated 4th August, 2017

no notice was given by the Adjudicating Authority to the Corporate Debtor.

3. Learned counsel for the appellant further submits that the parties have

already settled the dispute by compromise agreement dated 13th December,

2017, a copy of which has been produced before this Appellate Tribunal.

4. Learned counsel appearing on behalf of the respondent - 'Reliance

Commercial Finance Limited' (Financial Creditor) accepts that the impugned

order was passed without notice and without hearing the Corporate Debtor -

'Maharashtra Vidyut Nigam Private Limited'.

5. In the Court, learned counsel for the appellant handed over a demand draft

dated 12th December, 2017 issued by 'Yes Bank Limited', 9th Floor, Nehru

Centre, Discovery of India Building, Dr. A.B. Road, Worli, Mumbai issued in the

name of Financial Creditor - 'Reliance Commercial Finance Limited' for a sum of

Rupees Two Crores as a part payment in terms of agreement dated 13th

December, 2017.

6. Having heard the learned counsel for the parties and taking into

consideration the fact that the impugned order dated 4th August, 2017 was

passed by the Adjudicating Authority in violation of rules of natural justice, the

impugned order is set aside. Further, in view of the compromise agreement

reached between the parties on 13th December, 2017, we are not inclined to remit

the matter to the Adjudicating Authority, who is directed to close the proceedings

Company Appeal (AT) (Insolvency) No. 191 of 2017 2 and the parties will be bound by the compromise agreement, which should be

treated as a direction of the Appellate Tribunal.

7. In effect, order(s) passed by the Adjudicating Authority appointing

'Resolution Professional' declaring moratorium, freezing of account and all

other order(s) passed by the 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 Respondent under Section 433 and 434 stands abated. The

Adjudicating Authority will now close the proceeding. The Corporate Debtor

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

through its Board of Directors from immediate effect.

8. The Adjudicating Authority will fix the fee of the 'Resolution Professional'

and the Corporate Debtor will pay the fees for the period the Resolution

Professional has functioned. The appeal is allowed with aforesaid observation

and direction. 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

Company Appeal (AT) (Insolvency) No. 191 of 2017 3