Nalin Virji Shah vs Satish Sadashiv Rane & Anr

Mr. Nalin Virji Shah ...Appellant

Vs.

Mr. Satish Sadashiv Rane & Anr. ...Respondents

Present: For Appellant: - Mr. Jayant Mehta, Advocate.

For Respondents: - Ms. Anjali Sharma, Advocate for R2 (IRP) Mr. Anuj Mirdha, Advocate for R1.

O R D E R

07.03.2019─ On 1st March, 2019, when the matter was taken up,

following order was recorded:

"01.03.2019 The appeal has been

preferred against the order dated 14th February,

2019 passed by the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench

admitting the application under Section 7 of the

Insolvency and Bankruptcy Code, 2016 (for short,

'the I&B Code') filed by Mr. Satish Sadashiv Rane.

2. Learned counsel appearing on behalf of

the appellant while raised the question about the

status of the respondent and submitted that the

Contd/-.................

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respondent do not come within the meaning of

'Financial Creditor'. He further submits that the

parties have settled the matter on 28th February,

2019. It is also informed that the 'Committee of

Creditors' have not been constituted.

3. Mr. Tushar Gupta, Advocate appears and

accepts notice on behalf of Mr. Satish Sadashiv

Rane. He also accepts that no 'Committee of

Creditors' have been constituted and the parties

have settled the matter.

4. In the present case as we find that the

appeal has been preferred by the 'Corporate

Debtor' which is not maintainable in view of the

decision of the Hon'ble Supreme Court in

"Innoventive Industries Ltd. v. ICICI Bank" -

(2018) 1 SCC 407]. Learned counsel for the

appellant sought permission to file application for

substitution by one of the Directors/Shareholders

of the 'Corporate Debtor' and to transpose 'M/s.

Shah Group Builders Limited' through IRP as 2nd

Respondent."

2. In the present case, the impugned order was passed on 14th

February, 2019 by the Adjudicating Authority (National Company Law

Company Appeal (AT) (Insolvency) No. 208 of 2019 -3-

Tribunal), Mumbai Bench, Mumbai and the parties have settled the

matter on 28th February, 2019. Copy of 'Terms of Settlement' has also

been brought on record.

3. Learned counsel for the Respondent- Mr. Satish Sadashiv Rane,

accepts that part of amount has been paid to the Respondent in terms

of schedule of payment as mentioned in the 'Terms of Settlement' dated

28th February, 2019.

4. Ms. Anjali Sharma, Advocate appearing on behalf of Mr. Praveen,

the 'Interim Resolution Professional' also accepts that the 'Committee of

Creditors' was not constituted when the parties reached the settlement.

5. In the aforesaid circumstances and as the parties have settled the

matter prior to constitution of the 'Committee of Creditors', in the light

of the decision of the Hon'ble Supreme Court in 'Swiss Ribbons Pvt.

Ltd. & Anr. Vs. Union of India & Ors.', Writ Petition (Civil) No.

99/2018 (2019 SCC OnLine SC 73)", we allow the prayer as made on

behalf of the Respondent to withdraw the application as was filed by

him under Section 7. We, accordingly, set aside the impugned order

dated 14th February, 2019 passed in CP (IB)- 556/(MB)/2018 and

dispose of the application under Section 7 filed by the 'Financial

Creditor' as withdrawn.

6. In effect, order (s), passed by the Adjudicating Authority declaring

moratorium and action, if any, taken by the 'Interim Resolution

Company Appeal (AT) (Insolvency) No. 208 of 2019 -4-

Professional' all such orders and actions are set aside. Learned

Adjudicating Authority will now close the proceeding. The 'Corporate

Debtor' (company) is released from all the rigour of law and is allowed to

function independently through its Board of Directors from immediate

effect.

7. The 'Interim Resolution Professional' submits that he has

incurred total cost of Rs. 4,50,000/- towards the fees and cost of

'Resolution Process'. Out of the same, a sum of Rs. 2,00,000/- has

already been paid. In the circumstance, we direct the 'Corporate Debtor'

to pay the rest of the amount of Rs. 2,50,000/- to the 'Interim

Resolution Professional' within three weeks.

8. It is also informed that for the rest of the amount is payable by

post-dated cheques issued by the Appellant. The Appellant and the 1st

Respondent being bound by the 'Terms of Settlement' will ensure that

the post-dated cheques are encashed within time, failing which it will be

open to the parties to revive the 'Resolution Process'.

The appeal is allowed with aforesaid observations and directions.

No cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice A.I.S. Cheema) Member(Judicial) Ar/g Company Appeal (AT) (Insolvency) No. 208 of 2019