Prasad Gempex vs Star Agro Marine Exports Pvt Ltd & Anr

NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI Company Appeal (AT) (Insolvency) No. 469 of 2019

IN THE MATTER OF:

Prasad Gempex ...Appellant

Versus

Star Agro Marine Exports Pvt. Ltd. & Anr. ...Respondents

Present: For Appellant : Mr. V. Prakash, Senior Advocate with Mr. Ajay Garg and Ms. Shubha Ananth, Advocates

For 1st Respondent: Ms. C. Rubavathi and Ms. Sabita Mahadevan, Advocates for R.P.

For 2nd Respondent : Mr. Nakul Sachdeva, Advocate

ORDER

02.05.2019 The total claim of the Appellant was not entertained by the

'Resolution Professional' and being aggrieved the Appellant moved before the

Adjudicating Authority and thereafter before this Appellate Tribunal. The

Appellate Tribunal by order dated 1st February, 2019 passed in "Company

Appeal (AT) (Insolvency) No. 291 of 2018" while directed the Adjudicating

Authority to pass appropriate order under Section 31 of the I&B Code with regard

to 'resolution plan' as approved by the 'Committee of Creditors'. The Appellant

was allowed to file claim under sub-section (6) of Section 60 of the 'I&B Code'

before the Court of Law of appropriate jurisdiction or an application against the

'Corporate Debtor' namely "M/s. Star Agro Marine Exports Pvt. Ltd.' with the

following observations :

"7. Similar issue fell for consideration before this

Appellate Tribunal in 'M/s. Dynepro Private Limited' 2

vs. Mr. V. Nagarajan - Company Appeal (AT)

(Insolvency) No. 229 of 2018 etc.' The Appellate

Tribunal by its judgment dated 30th January, 2019

held that 'Resolution Professional has no jurisdiction

to decide the claim of one or other creditor, including

'Financial Creditor', 'Operational Creditor', 'Secured

Creditor' or 'unsecured Creditor'. Referring to sub-

section (6) of Section 60 of the 'I&B Code', this

Appellate Tribunal further observed that after

completion of the period of moratorium, a suit or

application can be filed against the 'Corporate

Debtor'. Relevant portion of Section 60 is quoted

below:-

"60. (1) The Adjudicating Authority, in relation to

insolvency resolution and liquidation for

corporate persons including corporate debtors

and personal guarantors thereof shall be the

National Company Law Tribunal having

territorial jurisdiction over the place where the

registered office of the corporate person is

located.

xxx xxx xxx

Company Appeal (AT) (Insolvency) No. 469 of 2019 3

(5) Notwithstanding anything to the contrary

contained in any other law for the time being

in force, the National Company Law Tribunal

shall have jurisdiction to entertain or dispose

of--

(a) any application or proceeding by or against

the corporate debtor or corporate person;

(b) any claim made by or against the

corporate debtor or corporate person,

including claims by or against any of its

subsidiaries situated in India; and

(c) any question of priorities or any question of

law or facts, arising out of or in relation to the

insolvency resolution or liquidation

proceedings of the corporate debtor or

corporate person under this Code.

(6) Notwithstanding anything contained in

the Limitation Act, 1963 or in any other law

for the time being in force, in computing the

period of limitation specified for any suit or

application by or against a corporate debtor

for which an order of moratorium has been

Company Appeal (AT) (Insolvency) No. 469 of 2019 4

made under this Part, the period during which

such moratorium is in place shall be excluded.

From the aforesaid provision, it is clear

notwithstanding the order passed under Section 31

of the I&B Code (any existing law), it is open to a

person to file a suit or an application against the

'corporate debtor' after completion of the period of

moratorium.

8. The power of 'Resolution Professional' also fell for

consideration before the Hon'ble Supreme Court in

'Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of

India & Ors. - Writ Petition (Civil) No. 99 of

2018'. In the said judgment dated 25th January,

2019, the Hon'ble Supreme Court held that

'Resolution Professional' has no adjudicatory

power. The 'Resolution Professional' has to vet and

verify the claims made and ultimately determine the

amount of each claim. As opposed to this, the

'Liquidator' in the Liquidation proceedings under the

I&B Code has to consolidate and verify the claims

and either admit or reject such claims under

Sections 38 to 40 of the Code.

9. In the present case, it is informed that the 'resolution

plan' has already been approved by the 'Committee

Company Appeal (AT) (Insolvency) No. 469 of 2019 5

of Creditors' and the 'Resolution Professional' had

placed the same before the Adjudicating Authority

on 4th October, 2018 in 'M/s. Prasad Gempex' with

regard to the 'corporate insolvency resolution

process' initiated against 'M/s. Star Agro Marine

Exports Pvt. Ltd.' (subject matter of Company Appeal

(AT) (Insolvency) No. 291/18) . A 'resolution plan'

has already been approved and placed before the

Adjudicating Authority (Chennai) on 4th October,

2018. However, till date no order under Section 31

has been passed. We find that 270 days have

passed.

10. Insofar as 'corporate insolvency resolution process'

initiated against 'Assam Company India Ltd.' is

concerned it is informed that a separate 'resolution

plan' has already been approved by the 'Committee

of Creditors' and same has been approved by the

Adjudicating Authority under Section 31 of the I&B

Code on 20th September, 2018.

11. In the facts and circumstances, we direct the

Adjudicating Authority (National Company Law

Tribunal), Chennai to pass appropriate order under

Section 31 of the I&B Code on the 'resolution plan'

as approved by the 'Committee of creditors', if not

yet passed, by 22nd February, 2019.

Company Appeal (AT) (Insolvency) No. 469 of 2019 6

12. We allow the appellant - 'M/s. Prasad Gempex' to

file claim in terms of sub-section (6) of Section 60

before the appropriate court of law or may file

appropriate application against the 'corporate

debtor' namely 'M/s. Star Agro Marine Exports Pvt.

Ltd.', if the 'resolution plan' is approved and do not

take proper care of the applicant. In case the

'resolution plan' is not approved and order of

'liquidation' is passed in respect of 'M/s. Star Agro

Marine Exports Pvt. Ltd.', in such case, it will be

open to the appellant 'M/s. Prasad Gempex' to file

claim before the 'Liquidator' in accordance with the

provisions as referred to above and the 'Liquidator'

will decide the claim under Section 40 of the I&B

Code.

13. We may observe that we have not expressed any

opinion with regard to the claim as made by 'M/s.

Prasad Gempex'. So far as the 'SREI Infrastructure

Finance Ltd.' who is aggrieved by the decision of the

'Resolution Professional', it may also take steps

under sub-section (6) of Section 60 against the

'corporate debtor' or any other party. In this case,

we make it clear that we have not expressed any

opinion with regard to the claim made by the 'SREI

Company Appeal (AT) (Insolvency) No. 469 of 2019 7

Infrastructure Finance Ltd.' or the decision as taken

by the 'Resolution Professional'."

2. The Adjudicating Authority (National Company Law Tribunal), Single

Bench, Chennai thereafter passed an order u/s 31 of the I&B Code approving

the 'Resolution Plan' by the impugned order dated 11th March, 2019. However,

while passing such order, the Adjudicating Authority held and observed :

"13. From the plan approval date, all inquiries,

investigation and proceedings, whether civil or

criminal, suits, claims, disputes, proceedings in

connection with the Corporate Debtor or affairs of

the Corporate Debtor, pending or threatened,

present or future in relation to any period prior to the

plan approval date, or arising on account of

implementation of this resolution plan shall stand

withdrawn and dismissed."

3. After hearing the learned counsel for the Appellant, learned counsel for

the 'Successful Resolution Applicant' who is now 'Corporate Debtor' and the

learned counsel for the 'Resolution Professional', we are of the view that the

Adjudicating Authority has no jurisdiction to pass any order with regard to any

matter pending before the Court of criminal jurisdiction. Further, the parties

having given opportunity to move against the 'Corporate Debtor' under

sub-section (6) of Section 60 of the 'I&B Code', the Adjudicating Authority cannot

prohibit the aggrieved person to file a claim before the Court of competent

jurisdiction or an application before the appropriate Forum.

Company Appeal (AT) (Insolvency) No. 469 of 2019 8

4. This Appellate Tribunal by order dated 1st February, 2019 in 'Company

Appeal (At)(Insolvency) No. 291 of 2018' having given liberty to the Appellant to

file a claim in terms of sub-section (6) of Section 60 and the impugned order

aforesaid to the extent as mentioned in paragraph 13 and quoted above being

contrary to the decision of this Appellate Tribunal, is fit to be set aside.

5. For the reasons aforesaid, we set aside the observation and direction as

given by the Adjudicating Authority at paragraph 13 of the impugned order dated

11th March, 2019 passed in CP/668/IB/2017 so far it relates to inquiry,

investigation, proceedings whether civil or criminal, suits etc. The rest part of

the order, 'approving the plan', is not interfered with as no case is made out to

interfere with the same.

6. However, we make it clear that we have not decided the claim of the

Appellant on merit nor express any opinion with regard to the pending suits or

proceedings which may have reached finality in terms of Section 31 of the I&B

Code.

7. The appeal is allowed in part. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice A.I.S. Cheema ] Member (Judicial)

[ Kanthi Narahari ] Member (Technical) /ns/gc

Company Appeal (AT) (Insolvency) No. 469 of 2019