Mrs. Jayshreeben Nareshchandra ... vs Sanjay J Shah Liquidator

Comp. App. (AT) (Ins) No. 1321 & 1322 of 2024 & I.A. No. 4794, 4795, 4796, 4797, 4798, 4799, 4800, 4801 of 2024

IN THE MATTER OF: Jayshreeben Nareshchandra Intwala, Director (Power Suspended) & Ors. ...Appellants

Versus

Sanjay J Shah, Liquidator ...Respondent

Present: For Appellants : Mr. Navin Pahwa, Sr. Advocate along with Mr. Himanshu Satija, ms. Neha Mehta Satija, Mr. Harsh Saxena & Ms. Ridhi Ranjan.

For Respondent : Mr. Sourit Arora & Mr. Sanjay Shah, Liquidator.

ORDER

(Hybrid Mode)

[Per : Justice Rakesh Kumar Jain (Oral)]

18.12.2024 This appeal is filed by the Suspended Director of the

Corporate Debtor under Section 61 of the Insolvency & Bankruptcy Code,

2016 ('Code') to challenge the order dated 10.06.2024 passed by the

National Company Law Tribunal, Ahmedabad, Court-2 ('Tribunal') in Cont.

A/3 (AHM) 2023 & IA/ 785 (AHM) 2023.

2. In brief, AKZO Nobel India Ltd. filed an application under Section 7 of

the Code against the Corporate Debtor, namely, Jivanjoyt Motors Pvt. Ltd.

which was admitted on 20.10.2022. Ajay Kumar Jain was appointed as IRP

and ultimately appointed as RP on 18.11.2022.

3. The RP filed an application bearing IA No. 1070 of 2022 under Section

19(2) r/w Section 60(5) of the Code in which the following prayers were

made

"b. Pass an order giving direction to the Respondents to extend assistance and cooperation to the Interim Resolution Professional and provide all required documents as per letter dated 22.10.2022 and email dated 27.10.2022 of IRP.

c. Direct the respondent No. 1,2 & 3 to handover the possession of all assets and records of the corporate debtor to the IRP.

d. Pass such further and other reliefs as the Hon'ble Tribunal deems fit and proper in the facts and circumstances of the present case."

4. In this application, the Tribunal had passed the following order on

02.01.2023:-

"Learned PCS for Suspended Management states that if the RP gives list of the documents which are required, the Suspended Management will provide them. The statement is recorded.

We further direct Suspended Management to cooperate with the RP in successful completion of the CIRP in time bound manner.

Accordingly, the IA is allowed and stands disposed of."

5. The RP filed a contempt petition bearing Contempt Petition No. 03 of

2023 on 20.01.2023 in which he alleged that :-

"4. That during the 4th CoC meeting which was held on 13.01.2023, the suspended director assured the RP that she will provide all required documents etc. by Monday i.e., on 16.01.2023. RP had also reminded by email dated 13.01.2023 after the CoC meeting on 13.01.2023 to all suspended directors. However, the contemnors/ respondents have provided partly accounting datas to the forensic auditor and few documents only on 17.01.2023 i.e. statutory notices of GST, Income Tax and PF Departments, Banks' notices, Creditors/ employees' notices, Banks' details (without ph. No. email ids of officers) and Old bank statements, PAN card, Sale deed of one immovable property situated at Navsari, Gujarat."

The prayer made in the aforesaid contempt petition is as under :-

"1. Initiate contempt proceeding against the alleged contemnors/respondents for wilfully and deliberately disobeying the order dated 02.01.2023 of this Hon'ble Tribunal passed in the IA No. 1070/2023 - U/S 19(2)."

6. While this contempt petition was pending, the RP filed an application

bearing IA No. 785 of 2023 under Section 60(5) r/w Rule 11 of the NCLT

Rules, 2016 with the following prayers :-

"1. Issue direction to the sub-registrar being Respondent No. 7 to cancel all 7 sale deeds, which has been marked as Annexure-7 and Annexure-8 (Colly) in this application with respect to building situated at Jivanjyot Theater Compound, Udhna Main Road, Surat - 394210. Alternatively, pass the necessary order for cancellation of all 7 sale deeds through competent court of jurisdiction.

2. Initiate proceedings against the respondents u/s 74 of the IBC for violation of moratorium order dated 20.10.2022 of this Hon'ble NCLT and Section 14 of the IBC.

3. Issue the necessary direction to the respondent No. 4 and 5 to hand over the physical and peaceful possession of the building situated at Dream Honda", Jivanjyot Theater Compound, Udhna Main Road, Surat-394210 to the RP."

7. The Tribunal passed the Impugned Order while referring to both Cont.

A/3 (AHM) 2023 & IA/ 785 (AHM) 2023. The Impugned Order read as

under :-

"Heard Ld. Counsel for the applicant. He pointed out that the suspended management had diverted by cash various transactions which are of serious in nature and listed the entries. He is directed to serve notice upon both the CAs who had given the certification of cash entries, made to file a reply and appear before this Tribunal. He is further directed to serve a notice on the CA who had also certified the Statutory Audit reports of the corporate debtor. List for further consideration on 16.07.2024."

8. Against this order the present appeal has been filed.

9. Counsel for the Appellant has submitted that the Impugned Order has

been passed without there being any pleadings or prayer in both the

application bearing I.A. No. 1070 of 2022 and I.A. No. 785 of 2023 and

therefore it is only a roving enquiry ordered by the Tribunal that too in a

contempt application which is not permissible because in a matter of

contempt, the court is only concerned with the order which has been passed

and alleged to have been violated that too wilfully.

10. Counsel for the Appellant, during the course of hearing, has produced

an application bearing IA No. 1865 of 2024. It is pertinent to mention that

the CD has been pushed into liquidation vide order dated 27.09.2023 and

the Liquidator has filed IA No. 1865 of 2024, impleading as many as 12

Respondents therein including Chartered Accountant Mr. Vishal Kumar

Shaw of VK Shaw & Co. Chartered Accountant Mr. Ankit Surana and Mr.

Priyank Vakaria (allegedly Chartered Accountants of the Corporate Debtor).

These CA's have been impleaded as parties because they are the CA of the

Corporate Debtor. The prayers made in this application are as follows :

"a) Your lordship may be pleased to pass appropriate orders under section 44 of the Insolvency and Bankruptcy Code, 2016, directing respondents to restore payment of Rs. 6,62,95,255/- to Corporate Debtor;

b) That Hon'ble Tribunal may be pleased to pass such order as it deems appropriate as per the provisions of Section 43 read with Section 44 of the Insolvency and Bankruptcy Code, 2016 against Respondents and;

c) That this Hon'ble Tribunal may be pleased to pass appropriate orders/ direction as it deems appropriate as per the provisions of Section 66 read with Section 67 of the Insolvency and Bankruptcy Code, 2016 against Respondents to make contribution of Rs. 20,94,20,993/- to Corporate Debtor;

d) Your Lordship may be pleased to pass an order directing respondents to give possession of assets of the Corporate Debtor i.e. 18 vehicles and cash of the CD company to the Applicant.

e) Your Lordship may be pleased to pass an order directing respondents to provide all the documents/ information/ clarification as sought by applicant and attached I as Annexure-T in the present application f) Your Lordship may be pleased to pass an order in respect to illegal payment of Rs. 10,46,40,362/- in cash as salary, directing respondents no. 1 to 3 to make such contribution to the Corporate Debtor as deem fit by Hon'ble Adjudicating Authority.

g) Your Lordship may be pleased to refer to IBBI for initiating criminal proceedings against respondents no. 1 to 3 under Section 236 of the Code for violation of Section 68 (i)(b), Section 70(1)(b) and Section 71 of IB Code, 2016

h) Your Lordship may be pleased to grant any other relief or relief as may deem fit in the interest of justice."

11. It is submitted that the said application was listed for hearing on

16.12.2024 and has now been adjourned to 10.02.2025 with the following

order :-

"IA/1865(AHM)2024 Learned counsel for the applicant is directed to issue notice to the respondent. List for further consideration 10.02.2025."

12. Counsel for the Appellant has submitted that the Respondent has

made the same allegation in the application which has been noticed by the

Learned Tribunal in the Impugned Order, in which notice has been issued

to the CA's who are not a party to the contempt petition as well. It is

submitted that it would be just and expedient, if the Impugned Order is set

aside and the Respondent may proceed with the application bearing IA No

1865 of 2024 pending before the Tribunal in which the Tribunal may pass

order in accordance with law.

13. Although Counsel for the Respondent has raised objection to the

submissions made by the Appellant and also submitted that the Appellant

is not an aggrieved person but keeping in view the aforesaid facts and

circumstances, much less the fact that the opening line of the Impugned

Order says that the "suspended management had diverted by cash various

transactions which are of serious in nature". We are of the view that the

Appellant is an aggrieved person who has to answer to this allegation made

against him. Counsel for the Respondent has further submitted that the

appeal is only maintainable under Section 19 of the Contempt of Court Act,

1971. We, however, do not agree with this submission.

14. Therefore, keeping in view of the aforesaid facts and circumstances,

the order dated 10.06.2024 is hereby set aside. The matter is remanded

back to the Tribunal to proceed with the contempt in accordance with law

and also decide the application bearing IA/1865(AHM)2024 filed by the

Respondent in which same prayers have been made.

15. In the end, while passing this order, it is hereby specifically

mentioned that we have not made any observation on the merit of this case

in any manner.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

Sim/RR