Paschimanchal Vidyut Vitran Nigam Ltd vs M/S Rathi Steel Ltd

IN THE MATTER OF: PASCHIMANCHAL VIDYUT VITRAN NIGAM LTD. Through its executive engineer, electricity urban Distribution Division-Vth, South Side GT Road, Ghaziabad, UP Email Id: eeeudd5@gmail.com ...Appellant

Versus

M/S. RATHI ISPAT LTD. (In Liquidation) Through Debashis Nanda, Official Liquidator, CS-14, C Floor, Ansal Plaza, Vaishali, Ghaziaad, U.P. Email Id: liquidatorril@gmail.com ...Respondent

Present: For Appellant: Mr. Daleep Dhyani, Adv. For Respondent: Ms. Adya Singh, Adv.

JUDGMENT

Per: Justice Rakesh Kumar Jain:

This appeal is directed against the order dated 11.08.2022, passed by

the Adjudicating Authority (National Company Law Tribunal, New Delhi,

Bench-VI) by which an application bearing 2969 of 2022 in IB 558/ND/2019

has been dismissed.

2. The brief facts of this case are that Punjab National Bank (Financial

Creditor) field an application under Section 7 of the Insolvency and

Bankruptcy Code, 2016 (in short 'Code') against M/s Rathi Ispat Ltd.

(Corporate Debtor) before the Adjudicating Authority which was admitted on

17.12.2019 and Rajkumar Gupta was appointed as Interim Resolution

Professional (IRP).

Company Appeal (AT) (Ins.) No. 1162 of 2022 2

3. The Committee of Creditors (COC) in its 3rd meeting unanimously

confirmed the appointment of Debashish Nanda as the Resolution

Professional (RP). In this regard, I.A. No. 2063 of 2020 was filed, which was

allowed by the Adjudicating Authority on 29.05.2020. The CoC in its 4th

meeting unanimously decided to initiate the liquidation proceedings against

the Corporate Debtor. The application bearing I.A. No. 3173 of 2020 was filed

for initiation of liquidation proceedings, which was allowed by the

Adjudicating Authority on 26.08.2020.

4. After initiation of liquidation proceedings, public announcement was

made on 31.08.2020 in Form B and claims were invited. The last date for

submission of claims was 25.09.2020.

5. The Appellant submitted its claim in Form C (claim for Operational

Creditors) dated 24.09.2020 allegedly without supporting documents. The

Respondent sent a letter on 25.09.2020, acknowledged the receipt and asked

the Appellant to provide record/paper/documents pertaining to sub station

operating in the vicinity of Corporate Debtor because the Corporate Debtor

has lease hold rights on a land parcel situated at A-2, Industrial Area, South

Side GT, Ispat Nagar, Ghaziabad, which was to be auctioned in liquidation

and the sub station was operating on the vicinity of the actionable land.

6. Reply to the letter dated 25.09.2020 sent by the Appellant on

15.10.2020, was not found sufficient, therefore, the Respondent, vide letter

dated 04.12.2020, asked the Appellant that it should provide within a period

of 7 days documents/evidence in the auctionable land on which the

substation was established. But according to the Respondent the relevant

documents were not submitted and ultimately vide a letter dated 22.02.2022

Company Appeal (AT) (Ins.) No. 1162 of 2022 3

the Appellant was informed about the rejection of its claim. The Appellant

then filed an application bearing I.A. No. 2969 of 2022 before the Adjudicating

Authority, which was rejected by the impugned order on the ground that the

liquidator has submitted a closure application in the matter which suggest

that the liquidation is more or less over and entertaining the application at

that stage was not proper.

7. Be that as it may, today during the course of hearing, Counsel for the

Respondent produced the order passed in I.A. No. 3348/ND/2022 in CP (IB)

No. 558/ND/2019 under Section 54 of the Code by which the Corporate

Debtor has been dissolved, assets of the Corporate Debtor were liquidated,

the proceeds were distributed amongst the financial creditors and there was

nothing left with the liquidator. In such circumstances, Counsel for

Respondent has submitted that the present appeal has become infructuous.

8. Counsel for the Appellant has not disputed this fact because of the copy

of the order dated 28.11.2022 passed by the Adjudicating Authority in I.A.

No. 3384/ND/2022 is produced before us but it is submitted that the

Respondent has committed an error in not appreciating the fact that the claim

was submitted by the Appellant before the due date. In this regard, it is

submitted that due date was 25.09.2020 and claim was submitted on

24.09.2020 and thus, it was within limitation.

9. However, Counsel for Respondent has vehemently argued that a

incomplete application much less claim without supporting

documents/evidence was inconsequential and the Appellant had been asked

time and again by the Respondent to submit the relevant documents to

consider his claim but it took long time much less beyond the period

Company Appeal (AT) (Ins.) No. 1162 of 2022 4

prescribed and thus, the claim was rejected and the application filed by the

Appellant bearing no. 2969 of 2022 has rightly been dismissed by the

Adjudicating Authority.

10. We have heard Counsel for the parties and after examining the record,

are of the considered opinion that there is no merit in the present appeal as

it had virtually become redundant with the efflux of time. No doubt that Form-

C was submitted by the Appellant before the cut-off date i.e. on 24.09.2020

but it was sans relevants documents which were not supplied despite giving

opportunities and by the time those were sought to be supplied, much water

had already flown because the application I.A. No. 3384 of 2022 was on its

last legs. Now the liquidation estate of the Corporate Debtor has been

disposed off. The proceeds have already been distributed. The Corporate

Debtor has been dissolved, therefore, cause shown in the present appeal has

become meaningless, as such the appeal has become redundant and

infructuous and the same is hereby dismissed. No costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

New Delhi

12th December, 2022

Sheetal

Company Appeal (AT) (Ins.) No. 1162 of 2022