Nippon Life India Asset Management ... vs Piramal Capital & Housing Finance ...

Nippon Life India Asset Management Ltd. ...Appellant

Versus

Piramal Capital & Housing Finance Ltd. & Ors. ...Respondents

Present: For Appellant: Mr. S. Niranjan Reddy, Sr. Advocate with Mr. Amit Agrawal, Mr. Sumit Agrawal, Ms. Radhika Yadav, Mr. Sahil and Ms. Reaa Mehta, Advocates. For Respondents: Mr. Arun Kathpalia, Sr. Advocate with Ms. Chitra Rentala, Mr. Rajat Jariwal, Ms. Shatakshi Tripathi and Mr. Aditya Dhupar, Advocates for R-1.

With

Company Appeal (AT) (Insolvency) No.488 of 2023

IN THE MATTER OF:

Barclays Bank PLC, Mumbai Bench ...Appellant

Versus

Piramal Capital & Housing Finance Ltd. ...Respondents

Present: For Appellant: Mr. Krishnendu Datta, Sr. Advocate with Ms. Smriti Jha, Ms. Palak Nenwani and Ms. Varsha, Advocates. For Respondents: Mr. Arun Kathpalia, Sr. Advocate with Ms. Chitra Rentala, Mr. Rajat Jariwal, Ms. Shatakshi Tripathi and Mr. Aditya Dhupar, Advocates for R-1.

Cont'd.../ -2-

ORDER

20.07.2023: These two Appeals have been filed against the order dated

09.02.2023 passed by the Adjudicating Authority (National Company Law

Tribunal), Mumbai Bench, Court II by which applications filed by Successful

Resolution Applicant to substitute itself in the place of Administrator who had

filed application under Section 43, 44 and 66 of the Code has been allowed.

2. In Company Appeal (AT) (Ins.) No. 475-476 of 2023, learned senior

counsel Shri S. Niranjan Reddy submits that the facts in the case giving rise

to this Appeal are little different since in the facts of present case the

applications which were filed against the Appellant under Section 43 and 44

were filed subsequent to approval of Resolution Plan by the CoC. Hence, the

substitution ought not to have been allowed. It is further submitted that the

Appellant is an entity against whom allegation of preferential transactions

were made on the ground that Appellant accepted accelerated payments from

the Corporate Debtor, which amount relates to corpus of the Appellant

received from various investors. It is submitted that in the facts of the present

case assignment of the applications under Section 43 and 44 ought not to

have been made in favour of the SRA and the application for substitution

ought to have been rejected. It is additionally submitted by Mr. Reddy that

terms of Resolution Plan did not provide for prosecuting the application filed

by the SRA. Another limb of submission of Mr. Reddy is that assignment is

not possible in the present case since consideration required is an objective

consideration, which can only be done by an Administrator.

Company Appeal (AT) (Insolvency) No.475-476 of 2023 & 488 of 2023 -3-

3. In Company Appeal (AT) (Ins.) No. 488 of 2023, Shri Krishnendu Datta,

learned senior counsel appearing for the Appellant submits that the

application which was filed under Section 43, 44 against the Appellant were

subsequent to the approval of Resolution Plan by the CoC. Shri Datta further

submitted that Appellant is not able to file claim since copy of plan was never

provided to the Appellant. It is further submitted that the Appellant has right

to set off against Corporate Debtor as per the agreement with the Appellant.

4. Shri Arun Kathpalia, learned senior counsel appearing for the

Respondent refuting the submissions of both learned counsel for the Appellant

submits that the issues which have been sought to be raised are fully covered

by judgment of this Appellate Tribunal dated 15.05.2023 in Company Appeal

(AT) (Ins.) No. 437 of 2023, Kapil Wadhawan vs. Piramal Capital &

Housing Finance Ltd. & Ors., where Appeals were filed against same order

dated 09.02.2023 and the question answered by this Appellate Tribunal is that

provision of the plan authorize/ empowers the Successful Resolution

Applicant to prosecute the preferential transactions under Section 43, 44 are

valid and substitution of the Successful Resolution Applicant in place of the

Administrator was well within the provisions of I&B Code and Regulations. It

is also submitted that the judgment also considered the submission that

application filed subsequent to approval of Resolution Plan can very well be

prosecuted by Successful Resolution Applicant.

Company Appeal (AT) (Insolvency) No.475-476 of 2023 & 488 of 2023 -4-

5. We have considered the submissions made by learned counsel for the

parties and perused the record.

6. In both these Appeals, the fact is that the application under Section 43

and 44 were filed against the Appellant subsequent to approval of the

Resolution Plan which fact is not disputed. In the judgment dated 15.05.2023

in 'Kapil Wadhawan vs. Piramal Capital & Housing Finance Ltd. & Ors.'

(supra), the question as to whether with regard to applications filed

subsequent to approval of the plan by the Successful Resolution Applicant can

be prosecuted, was considered and answered in Para 23 and 24. The said

submissions have been considered and answered in following manner:

"23. Another argument advanced by the learned Counsel for the Appellant is that two applications filed by the Administrator were after Resolution Plan was voted on 15.01.2021. The learned Counsel for the Appellant has referred to two IAs, which are subject matter of Company Appeal (AT) (Insolvency) Nos.451 of 2023 and 439 of 2023, which according to the Appellant were not even filed till the date Resolution Plan was voted, i.e. 15.01.2021. The submission of the learned Counsel for the Appellant is that any avoidance application, which has been filed subsequent to approval of the Plan cannot be pursued and the order of the Adjudicating Authority substituting the Piramal in those application deserves to be set aside.

Company Appeal (AT) (Insolvency) No.475-476 of 2023 & 488 of 2023 -5-

24. The timeline for filing avoidance application under Regulation 35A have been held to be not mandatory, however, the applications have to be filed in a reasonable time and any avoidance application, which is filed with inordinate delay can be refused to be entertained by the Adjudicating Authority. The submission which has been pressed by the learned Counsel for the Appellant is that avoidance applications, which were filed after approval of the Resolution Plan by the CoC, could not have been entertained. In the Code and the Regulations, there are no such provisions, which indicate that avoidance application filed after approval of the Plan by the CoC is to be rejected or not. It depends on the facts of each case and circumstances as to whether any application filed after approval of the Resolution Plan by the CoC can be considered or not. In the present case, we noticed that Resolution Plan has noted the pending avoidance applications."

7. We, thus, are of the view that with regard to application filed subsequent

to approval of plan by the CoC substitution of Successful Resolution Applicant

in place of the Administrator was approved by NCLT which was also upheld

by this Appellate Tribunal. We are bound by the order earlier passed by this

Tribunal which have to be followed. In this case, the submission of learned

counsel for the Appellant is that the transaction which have assailed against

Appellant are on different footing and not impugned under Section 66, hence,

Company Appeal (AT) (Insolvency) No.475-476 of 2023 & 488 of 2023 -6-

they were required to be objectively considered by the Adjudicating Authority

and it was only Administrator who could have objectively prosecuted.

8. We are of the view that substitution of Successful Resolution Applicant

in place of the Administrator having been upheld by our earlier judgment, we

cannot find any fault with the impugned order. We, however, make it clear

that it is open for the Appellant, at the time of consideration of their

preferential application on merits, to raise all pleas as available to oppose the

transaction which has been impugned in the preferential application. We

make it clear that we have not expressed any opinion on the merits of

preferential applications and other applications while deciding the present

Appeals. Both the Appeals are disposed of accordingly.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Archana/nn

Company Appeal (AT) (Insolvency) No.475-476 of 2023 & 488 of 2023