Palash Goswami vs Alloys & Metals (India) & Anr
- CitationCompany Appeal (AT) (Insolvency) No. 589 of 2019
Ratio decidendi
The rule this decision rests on
A person who is an employee and former director, but not a shareholder, of a corporate debtor, and who is not an operational creditor holding more than 10% of the total debt, has no right to attend meetings of the committee of creditors under the Insolvency and Bankruptcy Code, 2016. The Model Code of Conduct under the election law regime does not operate to exclude days from the 270-day period for corporate insolvency resolution under the Insolvency and Bankruptcy Code, 2016. Where more than 270 days have elapsed without any viable and feasible resolution plan, the Adjudicating Authority has no option but to pass an order of liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Palash Goswami .... Appellant
Vs
M/s Alloys & Metals (India) & Anr. .... Respondents
Present: For Appellant: Mr. Ganesh Chand Sharma, Advocate.
For Respondent: Mr. Vivek Sibal, Advocate for R.P.
ORDER
30.05.2019 This Appeal has been preferred by the Appellant, who was an employee and former Director (Finance) (not a Shareholder) of M/s. Hindustan Paper Corporation Ltd. ('Corporate Debtor') against order dated 2nd May, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, whereby, order of liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) has been passed.
2. Learned Counsel for the Appellant submits that the Appellant was not given opportunity to attend the meeting of the 'Committee of Creditors'. However, such submission cannot be accepted for two reasons namely: -
(i) The Appellant was not a Shareholder Director, but an employee of the 'Corporate Debtor'.
(ii) If he was 'Operational Creditor', then he had no right to attend the meeting in absence of having more than 10% of the total debt.
3. Learned Counsel for the Appellant submits that Model Code of Conduct came into force on 10th March, 2019 and continued till 2nd May, 2019, when the impugned order has been passed. However, such
Company Appeal (AT) (Insolvency) No. 589 of 2019 Page 1 of 2 submission cannot be accepted as Model Code of Conduct cannot be applied to 'Corporate Insolvency Resolution Process' for counting exclusion of days from the period of 270 days.
4. Admittedly, more than 270 days have crossed and in absence of any viable and feasible 'Resolution Plan', the Adjudicating Authority had no option, but to pass order under Section 33 of the I&B Code.
5. This same very impugned order dated 2nd May, 2019 fell for consideration before this Appellant Tribunal in Company Appeal (AT) (Insolvency) No. 585 of 2019 (Hindustan Paper Corporation Officers & Supervisor Association & Ors. Vs Hindustan Paper Corporation Ltd. & Ors.) and Company Appeal (AT) (Insolvency) No. 586 of 2019 (Cachar Paper Project Workers' Union (INTUC) Vs Hindustan Paper Corporation Ltd. & Ors.). This Appellate Tribunal by order dated 29th May, 2019 disposed of the Appeals with certain observations and directions to the Union of India with regard to ensuring that the 'Corporate Debtor' remains a going concern. The Appellant will also be covered by this decision. The Appeal stands disposed of with the aforesaid observations and directions. No cost.
[Justice S. J. Mukhopadhaya] Chairperson
[Justice A.I.S. Cheema] Member (Judicial)
[Kanthi Narahari] Member (Technical)
Ash/GC
Company Appeal (AT) (Insolvency) No. 589 of 2019 Page 2 of 2
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