Rajesh Narang vs Durha Vitrak Pvt. Ltd. & Anr

The present appeal has been preferred by an ex-Director of

Durha Vitrak Pvt Ltd who was running a full operational hospital

namely Febris Multispeciality Hospital of 150 beds (hereinafter

referred to as 'Corporate Debtor') which was earlier under

Corporate Insolvency Resolution Process (hereinafter referred to as

'CIRP'). The appeal has been preferred under Section 61 of the

Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as

IBC).

The appellant herein has assailed the order dated 31.05.2021

passed by the Adjudicating Authority, National Company Law

Tribunal, Principal Bench, New Delhi in I.A. No.9010/2021 in

(IB)/470(ND)/2019 (hereinafter referred to as NCLT). By the said

order learned NCLT has allowed an application i.e. IA

No.9021/2021 filed under Section 33(2) of the IBC Code. The said

application was filed by Resolution Professional (hereinafter

referred to as 'RP') namely Mr. Aishwarya Mohan Gahrana. It is

appropriate to reproduce the order dated 31.05.2021 as follows:-

"ORDER

Company Appeal (AT)(Ins) No.612/2021 3

It is an IA filed u/s 33(2) of the Insolvency & Bankruptcy Code, 2016 ("the Code") by the Resolution Professional (RP) seeking liquidation order based on the resolution passed by the CoC in its 6th meeting held on 28.01.2021 with a requisite majority as contemplated under I&B Code, 2016.

2. On perusal of this application, it appears that this (IB)- 470(ND)/2019 was admitted on 08.11.2019 and this Applicant was appointed as IRP and he invited claims from the creditors and constituted CoC only of one Financial Creditor i.e. LIC Housing Finance Limited as the other Financial Creditor i.e. Dr. Arinjaya Jain was a related party to the Corporate Debtor. Subsequently, IRI' was appointed as RP in the First Meeting of CoC held on 09.12.2019, and he appointed two Registered Valuers to value the assets of the Company.

3. In furtherance of it, the RP prepared the Information Memorandum and apprised the CoC in its 4th meeting dated 29.04.2020 that the Copy of Information Memorandum may be obtained after submitting the confidential undertaking and Form G for inviting the expression of interest was published on 17.08.2020 after the approval of the CoC in same meeting. The Form-G was again issued on 14.09.2020 after the discussion held in the fifth CoC meeting held on 07.09.2020. This authority also extended the CIR Period for further 90 days and excluded the period from 25.03.2020 to 31.07.2020 due to Covid-19. In furtherance to the publication of Form G, the resolution professional received an expression of interest from 4 prospective resolution applicants. However, the resolution professional received two proposed resolution plan pursuant to the final list of prospective resolution applicants. In the 6th CoC dated 28.01.2021, the CoC discussed the resolution plans received and was not inclined to consider any resolution plan considering them to be not feasible and viable and pass resolution for initiation of liquidation process of the Corporate Debtor which is as follows:-

"RESOLVE THAT pursuant to Section 33(2) of the Insolvency and Bankruptcy Code, 2016 and the rules made thereunder, the consent of members of the Committee of Creditors be and is hereby accorded to approve the filing of an application with Hon'ble Adjudicating Authority, regarding the initiation of liquidation of Corporate Debtor and to appoint existing Resolution Professional, subject to given consent to act as liquidator, as the liquidator of the Corporate Debtor.

"RESOLVE FURTHER THAT in pursuant to Regulation 4(2) of 1BBI (Liquidation Process) Regulations, 2016, the

Company Appeal (AT)(Ins) No.612/2021 4

liquidator shall be entitled to a fee of Rs. 1,25,000/- (Rs. One Lakh Twenty-Five Thousand only per month).

"RESOLVED FURTHER THAT the Resolution Professional be and is hereby authorized to submit an application before the Hon'ble Adjudicating Authority and to do all such acts, deeds and things as may be required or considered necessary or incidental thereto."

4.Looking at the application and averments thereof, we are of the considered opinion that this is a fit case for liquidation, therefore, we hereby order for liquidation of the company with directions as follows:

a. The Mr. Aishwarya Mohan Gahrana, holding Registration No.IBBI/IPA-002/1P-N00135/2017- 2018/10351 having email-aishwaryam_gahrana@yahoo.com is appointed as the Liquidator in terms of Section 32 of the Code;

b. Registry is directed to communicate this Order to the Registrar of Companies, NCT of Delhi & Haryana and to the Insolvency and Bankruptcy Board of India;

c. The Order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and a fresh Moratorium under Section 33(5) of the Insolvency and Bankruptcy Code shall commence;

d. This order shall be deemed to be a notice of discharge to the officers, employees and the workmen of the corporate debtor as per Section 33(7) of the Insolvency and Bankruptcy Code, 2016;

e. The Liquidator is directed to proceed with the process of liquidation in a manner laid down in Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016 and in accordance with the relevant rules and regulations.

f. The Liquidator shall follow up and continue to investigate the financial affairs of the Corporate Debtor in accordance with provisions of Section 35(1) of the Code.

g. The liquidator shall also follow up the pending applications for their disposal during the process of liquidation including initiation of steps for recovery of dues of the Corporate Debtor as per law.

Company Appeal (AT)(Ins) No.612/2021 5

h. The Liquidator shall submit a Preliminary Report to the Adjudicating Authority within seventy-five days from the liquidation commencement date as per Regulation 13 of the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016;

i.Copy of this order be sent to the financial creditors, corporate debtor and the Liquidator for taking necessary steps;

j. IA-901/2021 filed in IB-470/(ND)/2019 is disposed of in terms of the aforesaid terms.

(B.S.V Prakash Kumar) Acting Chairperson

(Hemant Kumar Sarangi) Member (Technical)".

It is the case of the appellant that the Febris Multispeciality

Hospital was fully operational since July, 2017. The Hospital

spread over 7 floors and having capacity of 150 beds. The said

hospital with all installations of machines/equipments/facility

were ready in all respect in July 2016. The registration of the said

hospital was granted by the Directorate of Health Services. Since

2017 it was in full operation and able to generate business.

However, on an application filed by the Financial Creditor, on an

allegation of default in payment despite the account being declared

as NPA, CIRP proceeding was initiated and by order dated

8.11.2019 NCLT appointed Mr. Aishwarya Mohan Gahrana as

Interim Resolution Professional (hereinafter referred to as 'IRP') for

Durha Vitrak Pvt Ltd, Respondent No.1 herein. The same IRP was

Company Appeal (AT)(Ins) No.612/2021 6

made Resolution Professional (hereinafter referred to as 'RP'). After

being appointed as IRP, Mr. Gahrana on 16.11.2019 took over the

Corporate Debtor. As per the appellant at that time when IRP took

over the Corporate Debtor it was generating a revenue of Rs.87

lakhs in the month of November, 2019. The appellant offered

unconditional support to RP to continue the operation of the

Hospital to maximise the value of the Corporate Debtor. In the

Paper Book at Page 6 monthwise revenue of the Corporate Debtor

is reflected in chart which is reproduced hereinbelow:

S.No. Month Receipt Credit Billing Total in Rs.

1 April 2019 31,71,687/- 18,49,530/- 50,21,217/-

2 May 2019 39,77,753/- 19,58,928/- 59,36,681/-

3 June, 2019 32,70,450/- 18,76,906/- 51,47,356/-

4 July, 2019 43,02,166/- 19,63,676/- 62,65,842/-

5 August, 2019 45,10,666/- 19,68,947/- 64,79,613/-

6 Sep 2019 25,84,228/- 14,81,812/- 40,66,040/-

7 Oct 2019 20,92,020/- 14,09,413/- 35,01,433/-

8 01.11.19 - 87,33,348/- 92,517/- 88,25,865/-

15.11.19

9 16.11.19 - 6,20,223/- 21,563/- 6,41,786/-

30.11.19

Company Appeal (AT)(Ins) No.612/2021 7

10 01.12.19 - 7,05,052/- 6,634/- 7,11,686/-

15.12.19

It is further case of the appellant that at the time when IRP

took over the Corporate Debtor the hospital was having a strength

of approximately 100 employees and doctors. The doctors strength

has been reflected in a chart at running page 7 which is as follows:-

S.No. Month/Period No. of Doctors

1 October 2019 17

2 1.11.19 to 15.11.19 15

3 15.11.19 to 30.11.19 8

4 December 19 5

It is further case of the appellant that during CIRP the RP

instead of taking step to continue the hospital as going concern

was taking all steps to create a situation for liquidation. Even the

RP had not taken any step to get certain dues of the Corporate

Debtor recovered from the concerned Govt Departments/Agencies.

Without adhering to provisions contained in Section 25 of the IBC

Company Appeal (AT)(Ins) No.612/2021 8

Code the RP in connivance with the financial creditors mainly LIC

Housing Finance Ltd who was having about 93% voting shares in

the CoC filed an application under Section 33(2) of the IBC Code

for initiating liquidation proceeding. It has also been argued that

Learned NCLT without examining viability of going concern of the

Corporate Debtor mechanically allowed the petition filed by the RP.

It is further case of the appellant that after filing of the

application under Section 33(2) of the IBC Code it was heard by

the Division Bench of NCLT consisting Hon'ble Justice BSV

Prakash Kumar, Acting President and Hon'ble Mr. V.K. Subburaj,

Member (Technical) and order was reserved. However, before

passing of the order one of the Member of the Bench i.e. Member

(Technical) demitted the office. Even thereafter on 20.05.2021

order was passed by a Bench consisting of Hon'ble Justice Mr. BSV

Prakash Kumar, Acting President sitting with Hon'ble Mr. Hemant

Kumar Sarangi, Member (Technical). Since it was against principle

of natural justice a rectification petition was filed by one of the ex-

Director namely Mr. Rakesh Saxena with a prayer to rectify the

order dated 20.05.2021. After noticing the fact that before the

pronouncement of order Mr. V.K. Subburaj had already demitted

the officer the said order i.e. order dated 20.05.2021 was declared

Company Appeal (AT)(Ins) No.612/2021 9

as void and matter was directed to be reopened for hearing by the

regular Principal Bench i.e. Acting President and Hon'ble Member

(Technical) Mr. Hemant Kumar Sarangi and it was directed to be

listed on 31.05.2021 for hearing. Thereafter the impugned order

was passed.

During the course of hearing it was submitted by Mr. Rajat

Bhardwaj, learned counsel for the appellant that total loan amount

was Rs.33 crores for which EMI was fixed as Rs.50 lakhs

approximately. However, due to reasons it was beyond the control

of the appellant, the loan account was termed as NPA and

thereafter in the month of February, 2019 a petition under Section

7 of the IBC Code was filed by the financial creditor. Learned

counsel for the appellant has drawn our attention to statement

made in para Q at Page 26 of the Memo of Appeal which is quoted

hereinbelow:-

"Q. The Committee of Creditors meeting was conducted on

09.12.2019 despite the repeated request on behalf of the

Appellant to take immediate steps with regard to continue

operations of the Hospital, the same were ignored by the RP for

the reasons best known to the RP. The fact that the payment was

to be received to the tune of Rs. 1,78,50,211 Crores (approx.) from

Company Appeal (AT)(Ins) No.612/2021 10

the Government Departments namely Delhi Police, Municipal

Corporation of Delhi, Delhi Govt Employees Health Scheme,

Central Industrial Security Force, Central Government Health

Scheme, etc was simply ignored and no steps till date has been

taken by the RP in this regard. The RP mentions the concern in

the Minutes of the Meeting but fails to take any steps in support

of the continuation of the operations of the Hospital."

Learned counsel for the Appellant has also drawn our

attention to running page 60 of the Memo of Appeal to show that

in the Hospital upto month of October, 2019, there were 17

doctors. He further by way of referring to Page 61 of the Memo of

Appeal tried to persuade the Court that till 15th November, 2019

there were 15 doctors. However, immediately after the RP took over

the charge of the hospital, number of doctors started drastically

decreasing. Learned counsel for the appellant has drawn our

attention to running page 62 to show that till 30th November, 2019

the number of doctors was reduced to 8, by December 15, it came

down to only 5 and till 31st December there remained only one

doctor namely Mr. Amit Garg, Department of Paediatric. This chart

is at page 63 and 64 of the Memo of Appeal. He further submits

that in the month of January and thereafter there remained no

doctor in the hospital.

Company Appeal (AT)(Ins) No.612/2021 11

Similarly learned counsel for the appellant has drawn our

attention to Annexure 13 which is from running page 67 to 76

showing reduction in number of staff in the hospital and what was

the strength when RP took the charge of the Corporate Debtor. In

the month of October, 2019 as per chart there were total 82

employees, till 8th November, 2019 the number of employees were

76, and till 30th November, 2019 there were 71 employees.

Thereafter the number of employees started decreasing and till 12th

December, 2019 it was reduced to 69 number of employees and

thereafter by 31st December, 2019 number of employees came

down to 45. In the month of January, 2020 the strength of

employees/staff was reduced to the negligible number of 8 which

is reflected at Page 76.

Learned counsel for the appellant further submits that in the

Meeting of COC, one of the Appellant, being suspended director of

the CD offered Rs.32.5 crores. However, same proposal was

outrightly rejected by the CoC under the leadership of RP. By way

of referring to Page 106 and 107 of the Memo of Appeal, learned

counsel for the Appellant submits that in the 4th Meeting of CoC

which was held on 29.5.2020 proposal was to re-start hospital

which was outrightly rejected by the RP. Even though during the

Company Appeal (AT)(Ins) No.612/2021 12

pandemic i.e. Covid 19 period when there was complete scarcity of

beds in hospitals, despite direction issued by the Hon'ble Delhi

High Court on 18.05.2021 the RP did not take step even to apply

for renewal of the licence of the hospital and frustrated the

direction of the Hon'ble Delhi High Court. He further submits that

the approach of the RP from the very inception was not to see the

CD as going concern and this was the reason that the Resolution

Plan which was offered by one Lala Munni Lal Manghe Ram

Charitable Trust which offered for Rs.25 crores was turned down

and the said Resolution Plan was rejected. Learned counsel for

the appellant submits that in CIRP it is mandatory required for the

RP to take all steps to see that the CD may continue as going

concern and liquidation is last resort. However, the RP in the

present case with malafide intention right from the very beginning

was proceeding to see that the CD may proceed in liquidation

instead of revival of the same. To substantiate his submission

learned counsel for the appellant has referred to his written

submission filed on 14.7.2022 wherein relevant portion of the

Judgement of the Hon'ble Supreme Court reported in (2019) 4 SCC

17 in the matter of Swiss Ribbons Pvt Ltd and Anr Vs UOI & Others

has been mentioned which is reproduced hereinbelow:

Company Appeal (AT)(Ins) No.612/2021 13

"Therefore, maximization of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor is brought back into the economic mainstream, it is able to repay its debts, which, in turn, enhances the viability of credit in the hands of banks and financial institutions. Above all, ultimately, the interests of all stakeholders are looked after as the corporate debtor itself becomes a beneficiary of the resolution scheme - workers are paid, the creditors in the long run will be repaid in full, and shareholders/investors are able to maximize their investment. Timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets. Since more investment can be made with funds that have come back into the economy, business then eases up, which leads, overall, to higher economic growth and development of the Indian economy. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern."

In view of the aforesaid facts and circumstances it was argued

by the learned counsel for the appellant that order of liquidation is

fit to be set aside. Learned counsel for the appellant has also

referred to certain facts disclosed in rejoinder as well as written

submissions filed on behalf of the appellant.

Mr. Sharad Tyagi, learned counsel has appeared on behalf of

both the Respondents i.e. Durha vitrak Pvt LTd through Mr.

Aishwarya Mohan Gaharana, RP as well as LIC Housing Finance

Ltd which is one of the major financial creditors. Mr. Tyagi, learned

counsel opposing the appeal firstly referred to para 2 of the Joint

Company Appeal (AT)(Ins) No.612/2021 14

Reply filed on behalf of Respondent No.1 i.e. RP and Respondent

No.2 i.e LIC Housing Finance Ltd. It is better to reproduce the

same para 2 of the joint reply:

"That the Appellant has obtained a stay vide order dated

September 07, 2021 from this Hon'ble Appellate

Tribunal by twisting and misrepresenting the facts of the

case, whereas the correct facts of the matter are totally

different. The attitude and approach of the ex-directors

of Durha Vitrak Private Ltd (Corporate Debtor/CD) was

non-cooperative since the beginning of taking over the

control of the CD by the IRP. The same is evident from

the applications which are sub-judice before the Hon'ble

Adjudicating Authority filed against the ex-directors of

the CD for non-cooperation on their part, due to which

the IRP/RP could not access various

information/documents pertaining to the CD, details of

which are as follows:-

Sr Application Number File Date of

N d filing

o. by

Company Appeal (AT)(Ins) No.612/2021 15

1 CA No.177/2020 RP Around

filed under Section January

19(2) of IBC against 02,

the following 2020

a. Rajesh

Narang( ex

director of CD)

b. Dr. Rakesh

Saxena (ex

director of CD)

c. Gulshan

Bansal

(Chartered

Account of CD)

d. Krishna

Kumar Jha

(CEO of CD)

The ex directors of

the CD have not even

filed their reply till

date.

2 IA No.5150/2020 Co Novemb

filed under Section C er 23,

60(5) of IBC with the 2020

Company Appeal (AT)(Ins) No.612/2021 16

prayer for providing

relevant

information/docume

nts to the RP

pertaining to the CD

Despite the evident non-corporation on the part of the ex-directors

of the CD, the RP made his best efforts to revive the CD and

prepared an Information Memorandum (IM) after collection of

information from various sources and issued Expression of

Interest on 2 (Two) occasion being on August 16, 2020 and again

on September 14, 2020, at the instance of Committee of

Creditors."

He further submits that CIRP was commenced on

08.11.2019. At the time of initiation of CIRP, the CD was having

only Rs.12858/- in its account and its CD unit i.e. Febris

Multispeciality Hospital was having Rs.15300/- only in its account.

The aforesaid accounts were lying in the Axis Bank. On 6.11.2019

total amount of Rs.4138/- of CD/Hospital was lying in ICICI Bank.

He further submits that since September, 2019 the employees of

the Corporate Debtor were on strike. To substantiate his

submissions that the employees were on strike, learned counsel for

the Respondent has drawn our attention to Page 51, 52 and 53 Company Appeal (AT)(Ins) No.612/2021 17

those are photo copies of the clips of electronic news. He further

submits that the account of CD was declared NPA on 7.4.2018. He

has also drawn our attention to running page 101 of joint reply to

show that on 11.5.2020 the RP sent mail which was 9th reminder

seeking cooperation of both the ex-directors for preparation of

Balance Sheet. He has also drawn our attention to para 7 and 9 of

the joint reply to show complete non-cooperation by the ex-

directors. By way of referring to statement made in para 7, 8, 9,

10 and 13 of the reply, Mr, Tyagi, learned counsel submitted that

the appellant has never rendered any cooperation nor he took steps

for supplying information and relevant documents to the RP. He

further submits that the registration certificate of the Hospital was

valid upto March, 2020. However, due to failure on the part of

suspended directors the licence was not got renewed and he placed

the proceeding of the 4th CoC to highlight his submissions. On the

point of revival/restarting of the Hospital it was argued by the

learned counsel for the Respondent that RP had taken all steps.

He has drawn our attention to running Page 155 i.e. Resolution

passed in the 4th COC whereby it was resolved to invite Expression

of Interest. Mr Tyagi, learned counsel has emphatically argued that

though certain resolution plans were received but since they were

Company Appeal (AT)(Ins) No.612/2021 18

not viable the CoC decided to reject the same. He submits that in

the commercial wisdom the decision was taken and as such the

said decision may not be faulted by either of the parties. To

substantiate his submission the learned counsel for the

Respondent has drawn our attention to Page 20 and 21 para 19 of

the joint reply. In para 19 learned counsel has referred to para 142

of judgement of Hon'ble Supreme Court passed in Kalpraj

Dharamshi & Ors Vs Kotak Investment Advisors Ltd and ors. Civil

Appeal No.2943-2944, 3138-3139m 2949-2950 if 2020 and Civil

Appeal Nos 847-848 of 2021 which are reproduced hereinbelow:

"142..................It has further been held, that the commercial

wisdom of CoC has been given paramount status without any

judicial intervention for ensuring completion of the stated

processes within the timelines prescribed by the I&B Code.

155. It would thus be clear, that the legislative scheme, as

interpreted by various decisions of this Court, is unambiguous.

The commercial wisdom of CoC is not to be interfered with,

excepting the limited scope as provided under Sections 30 and 31

of the I&B code."

Similarly in the same para i.e. para 19 of the joint reply reference

has been made to para 46 of a judgement of Hon'ble Supreme

Court in Committee of Creditors of Essar Steel India Ltd through

Company Appeal (AT)(Ins) No.612/2021 19

Authorised Signatory Vs Mr. Satish Kumar Gupta and other Civil

Appeal No.8766-67 of 2019, which is quoted hereinbelow:

"46................Thus, it is clear that when the Committee of

Creditors exercises its commercial wisdom to arrive at a business

decision to revive the corporate debtor, it must necessarily take

into account these key features of the Code before it arrives at a

commercial decision to pay off the dues of financial and

operational creditors."

By way of referring to aforesaid judgement it has been argued that

decision for liquidation was commercial wisdom and as such the

order impugned may not be interfered with.

Besides hearing learned counsel for the parties we have

examined entire material available on record and after going

through the same we are satisfied that neither impugned order is

required to be approved nor the conduct of RP can be considered

as a conduct which was expected from a RP. The basic object of

the IBC is to see that even if there is financial crunch or a company

is in default, the approach should be to get the said

company/entity as going concern. Time without number it has

been held that a step for revival of the CD would be the first step

Company Appeal (AT)(Ins) No.612/2021 20

and this is the reason that under the Code there is provision for

inviting interest for selecting persons competent to take over the

CD and also to clear the outstanding of the creditors. In any event

liquidation of a CD under the IBC Code is considered as last nail

in a coffin. The object to keep a CD as going concern is a rule

whereas carrying the CD for liquidation is exception. On minute

examination of proceeding of all the CoCs Meeting which have been

brought on record in running Page 77 to 144 of the Memo of Appeal

we are really dissatisfied by the approach of RP.

The RP who was expected to proceed independently, in the

present proceeding has proceeded as if he was one of the partner

of the main financial creditor i.e. LIC Housing Finance Ltd. Once

IRP/RP is appointed by the Adjudicating Authority he acts as a

public servant and as a public servant it is expected that he will

proceed in a fair and independent manner. However, after going

through entire proceeding of the CoC we are completely dissatisfied

with the conduct of the RP. Before going to deliberate in detail on

the proceeding of the CoC it would be proper to firstly notice that

even in the present proceeding that too before the Appellate

Tribunal the RP has appeared through a common Advocate who

has appeared on behalf of the RP as well as financial creditor i.e.

Company Appeal (AT)(Ins) No.612/2021 21

LIC Housing Finance Ltd. Reply which has been filed in the

present appeal has also been filed jointly by RP and Financial

Creditor. This act of the RP is itself a glaring example of biasness.

So far as conduct of the RP is concerned it can be deprecated

on the point that after initiation of the CIRP when first Meeting

CoC was to be held, the RP chose to visit the premises of the

financial creditor and first CoC Meeting was held on 9th December,

2019 at Meeting Room of M/s LIC Housing Finance Ltd, Regional

Office, 2nd floor, Jeevan Deep Building, Sansad Marg, New Delhi.

In the said COC Meeting there was only one financial creditor, i.e.

LIC Housing Finance Ltd. 2nd CoC Meeting was again held at the

same place i.e. Meeting Room of LIC Housing Finance Ltd on

14.1.2020. At running page 94 of Memo of appeal it is evident

from the resolution on 14.1.2020 i.e. 2nd Meeting of CoC that

Committee expressed its intention to meet again on 25.1.2020

morning at 10 AM at the same place for 3rd Meeting of CoC.

Meaning thereby that Meeting was to be held at Meeting room of

M/s LIC Housing Finance Ltd. However, the proceeding of 3rd CoC

which was held on 25.1.2020 indicates that Meeting of 3rd CoC was

held at room of M/s Fair and Just Legal solution LLP, Sector 62,

Noida. Page 95 i.e. 1st page of the Meeting CoC reflects Members

Company Appeal (AT)(Ins) No.612/2021 22

of the CoC and their authorized representative presence. This

chart reflects that in the said Meeting only financial creditor i.e.

M/s LIC Housing Finance Ltd was represented by its five

representatives whereas in respect of other two financial creditors

namely Siemens Financial Services Pvt Ltd and HDFC Bank Ltd

whose voting share was 4.66% and 1.97% respectively, there was

none appearance. Similarly the CD was non-represented.

Thereafter 4th Meeting of CoC was held on 29.7.2020 at Aishwarya

M Gaharan & Associates, 2nd floor in Jangpura Extension, New

Delhi of course through video conferencing. Running page 102 of

the Memo of Appeal i.e. part of the 4th Meeting of COC reflects that

in Item No.6 the CoC took note about the change of address of

Resolution Professional, since RP informed that the registered

office of the Resolution Professional has been changed w.e.f.

1.2.2020 to 4 Birbal Market, 2nd Floor, Jangpura Extension, New

Delhi, NCTof Delhi. We are of the opinion that being RP it was

duty on his part to show his independence and fairness, but

visiting the premises of LIC Housing Finance Ltd who was the

major financial creditor i.e. having above 93% of voting right in the

CoC reflects that it was neither independent nor fair. Rather it can

Company Appeal (AT)(Ins) No.612/2021 23

be inferred that he was only sharing interest of one of the major

financial creditor.

Besides the conduct of the RP regarding visiting the place of

one of the main financial creditor for CoC Meeting, on examination

of the proceeding of 6th CoC Meeting it is evident that right from

the very inception he has not taken even any step to see CD as

going concern rather the conduct of the RP shows that he was pre-

determined for liquidation of the CD. However, to cover up his

such intention, he was creating documents and filing petitions

against the suspended directors of the CD. On going through

running page 79 of the Memo of Appeal which is part of the

minutes of the 1st Meeting of the CoC it appears that in the 1st

Meeting itself which was held on 9.12.2019 the RP informed the

Committee that the CD was having its multispeciality hospital at

Narela, Sector 7, North West Delhi which was not working fine due

to scarcity of working capital and mis-management of day to day

operation. He also informed that working conditions was not

satisfactory whereas the appellant has taken specific stand that

the hospital till the date of taking over by the IRP was running

smoothly and generating fund also. The chart which has been

brought on record in the Memo of Appeal reflects that the CD was

Company Appeal (AT)(Ins) No.612/2021 24

running Febris Multispeciality Hospital of 150 beds and till when

IRP was appointed the CD was generating revenue of 87 lakhs in

the month of November, 2019.

It is also evident from the fact disclosed in the Memo of Appeal

that the strength of Doctors and staff/employees were also

sufficient till the initiation of CIRP. However, immediately after IRP

took charge it started reducing and within one or two months it

was reduced to a negligible number. These facts are itself enough

to draw an inference that the RP had given incorrect picture to the

CoC in the Meeting. Moreover, in the 1st Meeting there was only

one financial creditor i.e. LIC Housing Finance Ltd and this

meeting was attended by both suspended directors of the CD in

presence of Mr. Aishwarya Mohan Gaharana and Mr. Sharda

Tyagi, legal advisor.

In the 2nd CoC Meeting which was held on 14.01.2020 besides

LIC Housing Finance Ltd two other financial creditors namely

Siemens Financial Services Pvt Ltd and HDFC Bank Limited were

represented through their representatives and one of the director

from the CD, Mr Rajesh Narang was also present. Even during 2nd

CoC the RP placed before the committee measures required

before the Committee. The committee discussed the same in

Company Appeal (AT)(Ins) No.612/2021 25

detail. The committee noted that presently there are no

chance for functioning of the hospital due to the negative

public image, mismanagement and lack of required working

capital. In the said 2nd CoC Meeting the appellant also expressed

to place the proposal before the LIC Housing Finance Ltd, however,

the same was denied. Running page 93 of the Memo of Appeal i.e.

Part of the 2nd CoC Meeting reflects that the present appellant had

even asked the Members "what their intention behind the decision

of not to accept his proposal"?

The intention of the RP is further evident on examining the

proceeding of the 3rd CoC held on 25.1.2020 wherein except LIC

Housing Finance Ltd none of the other financial creditors or even

CD were present. We have already noticed that in the last meeting

i.e. 2nd Meeting of CoC it was resolved for holding meeting at the

same place i.e. Meeting room of LIC Housing Finance Ltd.

However, the 3rd Meeting was held at a different place in Noida and

that too there were none appearance of remaining two financial

creditors and CD and even in this proceeding certain alarming

things were discussed that is reflected from running page 97 and

98 of the Memo of Appeal. At page 97 in Item No.4 the Committee

even discussed for invocation of personal guarantee by the

Company Appeal (AT)(Ins) No.612/2021 26

Members of the CoC. On the one hand in earlier CoC Meeting it

was discussed that no information was provided by the CD.

However, item No.8 of the CoC which is at page 104 of the Memo

of Appeal gives an impression that sufficient information were

available. It is appropriate to reproduce Item No.8 and 9 at

running page 104-105 respectively of Memo of Appeal as follows:-

"Item No.8: To take note of the status of valuation

The Resolution professional informed that for want of

complete information and documents valuation could not be

complete on time. Valuers required certain information without

which complete picture cannot be drawn for valuation. All details

of property and assets are not available.

If all information is available the valuation report may be available

within one month and we hope it by August end.

The Committee also raised the issue of the high cost of the

valuation. The Resolution Professional appraised that the details

about the appointment of the valuers were also placed before the

second meeting of the committee of creditors.

Further, we require valuers under all three classes as we have

assets under all three classes land and building, plant and

machinery and financial assets. Under the law, we require

two valuers for each class. So we need to pay a total of six

Company Appeal (AT)(Ins) No.612/2021 27

valuers. All valuers are required to value corporate debtor as a

whole for their values as going concern as well as liquidation

values. The work involved is not comparable to the routine

valuation of certain and limited assets. Therefore, it seems a high

cost."

Item No.9 :To take note of the status of Forensic audit.

The Resolution Professional informed that he received three

proposals and appointed M.K. Agarwal & Company, New Delhi

with the least amount of fee quotation. The auditor communicated

to the Resolution Professional earlier about completion of about

70% work as of now. It is also informed that forensic auditor

started work even when the advance of the fee has not been

provided but seeking advance amount at earliers.

The RP on the one hand without the approval of the CoC was

taking major decision but on the other hand before the CoC he was

giving a picture that he was not getting any information. It is

reflected from Page 105, Item No.9, that the RP informs the CoC

that he had received three proposals and appointed one M.K.

Agarwal and Co, New Delhi. However, even there were some

proposals to restart functioning of the hospital, but, on flimsy

ground it was turned down. At this stage it is necessary to

Company Appeal (AT)(Ins) No.612/2021 28

reproduce the proposal and discussions regarding re-functioning

of the hospital by the CoC which is at page 106 to 107, as follows:-

"C-Proposal to restart functioning of Hospital

The Resolution Professional informed that there were some

proposals to restart the functioning of the hospital.

Mr. Saxena, member of the suspended board of directors,

mentioned that there is a proposal to restart the operations

received from a third party and the proposal is mailed to the

resolution professional and a director.

The Resolution Professional submitted that without proper license

and permission to run a hospital we cannot run a Covid Care

Centre or other health care facility in violation of the general law

related to run a hospital. We cannot try to make profit risking the

life of patients, quality of services and compliance of various

health laws.

The Resolution Professional also mentioned that a proper proposal

should include registered medical professionals under

commitment.

The committee requested to provide a proper proposal with all

licenses renewal as a primary and essential condition along with

details of doctors, medical and non-medical staff details,

consideration amount, working capital to be introduced, net-

worth, proper finance back up, security amount offered,

Company Appeal (AT)(Ins) No.612/2021 29

performance guarantee, services to be offered including OPD and

IPD services, proper maintenance of hospital and details of assets

and machinery of hospital planned to be used.

Members of the suspended Board of Directors committed to getting

all required licenses to run the hospital at earliest."

From the Memo of Appeal it is further evident that during

peak period of Covid 19 on 1st April, 2020 a proposal was

submitted to the RP for running the hospital and was ready to

spend appropriate funds for restoration of servicing of the existing

facility at Febris Multispeciality Hospital and other offers were also

given but same was also not accepted by the RP. The said proposal

is at running page 119 to 124 of the Memo of Appeal.

The ill intention of the RP is further evident on perusal of the

proceeding of the 4th CoC Meeting held on 29th July, 2020 whereby

unreasonable eligibility criteria under Section 25(2)(h) to invite

prospective resolution applicants was included. Running page 109

of the Memo of Appeal i.e. part of the 4th CoC Meeting dated 29th

July, 2020 depict regarding fixation of eligibility criteria which are

as follows:-

Company Appeal (AT)(Ins) No.612/2021 30

"a. A net-worth of Rs.5 Crores as per last audited balance sheet

and turnover of Rs.10 crores as per last financial year and a

record of profitability of last 3 financial years; or

b. In case of any other person having net worth 5 crores of their

own or holding company or promoters and having a sufficient

means of finance in form of a bank balance or fixed deposit or

sufficient fund from a committed source of finance of Rs.1 crore or

more;

Each person submitting an expression of interest shall submit a

non-refundable earnest money deposit of Rs.15 lakhs in case of a

plan not accepted or approved, which will be adjustable in case

plan accepted and approved. However, this amount shall be

refunded in case the person withdraws before finalization of Final

List of Prospective Resolution Applicants."

The condition of forfeiture of Rs.15 lakh even in case of non-

acceptance and/or approval of the expression of interest itself

reflects that the very invitation of expression of interest was to

frustrate or deter the participants to offer any express of interest.

It appears that this stringent criteria was fixed on 29.07.2020 in

the 4th CoC Meeting. However, at much belated stage on 7th

September, 2020 in 5th CoC Meeting it was resolved to substitute

the said condition. It would be appropriate to reproduce the said

Company Appeal (AT)(Ins) No.612/2021 31

Resolution which is at running page 131 of 7th September, 2020

Meeting:

"Resolved that on-page 6 of "Invitation of Expression of Interest"

in place of words:

"Each person submitting an expression of interest shall

submit a non-refundable earnest money deposit of Rs.15

lakhs in case of the plan not accepted or approved, which

will be adjustable in case plan accepted and approved.

However, this amount shall be refunded in case the person

withdraws before finalization of Final List of Prospective

Resolution applicants."

Following words shall be substituted with effect from the date of

issue of the documents:

"Each person submitting an expression of interest shall

submit a refundable earnest money deposit of Rs.15 lakhs.

The Demand Draft shall be made in favour of "Durha Vitrak

Private Ltd"

Resolved further that the Resolution Professional may circulate

the amended copy to all parties concerned with it."

After almost about 3 months from the date of inviting

expression of interest such modification that too in a CIRP was

Company Appeal (AT)(Ins) No.612/2021 32

meaningless. Rather an adverse inference can be drawn against

the RP in such a situation.

In 6th Meeting CoC which was held on 28.1.2021 Resolution

Plan submitted by at least two namely Unicon Builders and Lala

Munni Lal Manghe Ram Charitable Trust were considered and

rejected. Lala Munni Lal Manghe Ram Charitable Trust in its

resolution plan had firstly mentioned Rs.21 crores, however,

during discussion they offered upto Rs.25 crores for resolution

plan but same was rejected. This offer had come in the month of

January, 2021 whereas it has been noticed that the running

hospital was made non-operational immediately IRP, who is

presently RP, had taken charge of the CD. In hospital premises

there were number of plant and machinery. Since it had become

non-operational obviously from the month of December, 2019 to

January, 2021 i.e. after lapse of more than one year certainly those

plant and machinery without any operation must had been rusted

and decayed due to inaction of the RP. There is no reason to come

to the conclusion that even 7 storey huge hospital building was

maintained during said period. Since for such a long period the

hospital building, plant and machinery all had remained stand still

Company Appeal (AT)(Ins) No.612/2021 33

naturally it suffered a lot, which can be one of the reasons for

decrease in the value of the CD property.

In the present case we have noticed that even during initial

period of CIRP the appellant had offered Rs.32.5 crore. However,

the said proposal was outrightly rejected. The proceeding of 2 nd

CoC held on 14.1.2020 reflects that the appellant had orally

proposed its intention for making an offer of Rs.32.5 crores lump

sum. It has been discussed in Item No.11 at running page 92, 93

of Memo of Appeal which is quoted hereinbelow:

"The member of the suspended board of directors Mr. Narang

made a proposal orally and communicated his intention to

place it in on record in writing that promoters of the

corporate debtors are indented to make an out of court

settlement with one of the financial creditors and member

of the committee M/s LIC Housing Finance Ltd by making

an offer of Rs.32.5 crores lump sum. The proposal was not

consented by the members of the committee unilaterally

and same has been communicated to Mr. Narang.

The representative of the LIC Housing Finance Limited have

conveyed Mr. Narang that corporate insolvency resolution process

can be withdrawn only if entire payment of the LIC Housing

Finance Limited be made in one go. Same views were expressed

Company Appeal (AT)(Ins) No.612/2021 34

by representative of Siemens Financial Services Pvt Ltd and HDFC

Bank Ltd.

All representatives communicated that all payment of all members

of the committee of creditors should be settled in one go only

thereafter the committee may consider the settlement.

During Covid period the Hon'ble Delhi High Court in CWP

No.5049/2021, CM No.15453/2021on 18th May, 2021 on the

petition filed by one of the directors in a Writ Petition directed the

Govt of NCT of Delhi, Respondent No.1 to take a decision with

respect to offer of the petitioner for running the hospital. The order

dated 18.05.2021 passed by the Division Bench of Hon'ble Delhi

High Court consisting Hon'ble the Chief Justice and Ms Justice

Jyoti Singh is quoted hereinbelow:

"Proceedings have been conducted through video conferencing.

1. Learned counsel for the Petitioner submits that the Petitioner is

a Doctor by profession and was a Director in the Company which,

prior to the appointment of the Insolvency Resolution Professional

by NCLT, was running a multispeciality hospital under the name

of Febris situated at Narela, New Delhi. It is a 150 bedded hospital

and also accessible to people from Haryana and Uttar Pradesh.

2. Counsel for the Petitioner submits that independent of the NCLT

proceedings, the petitioner is offering the hospital facility to

Company Appeal (AT)(Ins) No.612/2021 35

Respondent No.1 and is ready and willing to deposit Rs.15 Lakhs

as an initial contribution as also Rs.4 Lakhs p.m. for running the

hospital. The remaining funds would be generated from the money

paid by the patients. The hospital is a multispecialty hospital and

in the present circumstances of Pandemic Covid-19 with extreme

scarcity of hospitals and beds, this would go a long way to benefit

the people of this city. Petitioner also undertakes that he will not

take the control of the hospital or claim any right over it as the

proceedings are pending before the NCLT and the Petitioner is only

offering the services of his team of doctors and para-medical staff

to make the hospital operational during this pandemic situation

as a goodwill gesture.

3. Having heard learned counsels for both sides and looking into

the facts and circumstances of the case, we hereby direct

Respondent No.1 to take a decision with respect to the aforesaid

offer of the Petitioner, subject to the undertaking given by him with

regard to the contribution of funds and the control over the running

of the hospital and also looking to the reply affidavit of

Respondent No. 3 file in this petition. These aspects of the matter

will be kept in the backdrop while taking a decision in the matter

by Respondent No.1. Since the offer, if accepted, can be useful in

the present circumstances, we hope and expect Respondent No.1

to take a decision as expeditiously as possible as and not later

than three weeks from today.

Company Appeal (AT)(Ins) No.612/2021 36

4. With these observations, the writ petition and the application

are disposed of."

The entire record and proceeding of the CoC Meeting, which

we have discussed hereinabove, reflects that even the order of the

Hon'ble Delhi High Court was also not complied with whereas the

order was very much specific.

We can take judicial notice of the fact that during the peak

period of Corona when such offers were made to run the hospital,

all the citizens were crying for medical help and running for getting

bed in hospitals. Number of Covid patients died due to non-

availability of beds in the hospital. However, even during such a

situation the behaviour of RP was detrimental to the entire society.

It is common knowledge that during Covid period number of

hospitals besides rendering service to society generated huge

funds, however, even in such situation in the present case, to the

reasons best known to him, the RP did not allow anyone to run the

hospital as going concern.

We are of the opinion that in such a situation considering all

those facts it was not appropriate for the NCLT to allow application

filed by the RP under Section 33(2) of IBC. The order impugned is

otherwise also liable to be set aside on the ground that same is not

Company Appeal (AT)(Ins) No.612/2021 37

in accordance with law which can be inferred on perusal of all the

three orders which were passed on 20.05.2021, 25.5.2021 and last

order dated 31.5.2021 which is under challenge in the present

Appeal. We have already reproduced the impugned order dated

31.05.2021. For just decision in the matter it is appropriate to

reproduce remaining two orders i.e. order dated 20.05.2021 and

25.05.2021 as follows:

"ORDER Pronounced on 20.05.2021"

It is an IA filed u/s 33(2) of the Insolvency & Bankruptcy Code, 2016 ("the Code") by the Resolution Professional (RP) seeking liquidation order based on the resolution passed by the CoC in its 6th meeting held on 28.01.2021 with a requisite majority as contemplated under I&B Code, 2016.

2. On perusal of this application, it appears that this (IB)- 470(ND)/2019 was admitted on 08.11.2019 and this Applicant was appointed as IRP and he invited claims from the creditors and constituted CoC only of one Financial Creditor i.e. LIC Housing Finance Limited as the other Financial Creditor i.e. Dr. Arinjaya Jain was a related party to the Corporate Debtor. Subsequently, IRI' was appointed as RP in the First Meeting of CoC held on 09.12.2019, and he appointed two Registered Valuers to value the assets of the Company.

3. In furtherance of it, the RP prepared the Information Memorandum and apprised the CoC in its 4th meeting dated 29.04.2020 that the Copy of Information Memorandum may be obtained after submitting the confidential undertaking and Form G for inviting the expression of interest was published on 17.08.2020 after the approval of the CoC in same meeting. The Form-G was again issued on 14.09.2020 after the discussion held in the fifth CoC meeting held on 07.09.2020. This authority also extended the CIR Period for further 90 days and excluded the period from 25.03.2020 to 31.07.2020 due to Covid-19. In furtherance to the publication of Form G, the resolution professional received an expression of interest from 4 prospective resolution applicants. However, the resolution professional received two proposed resolution plan pursuant to the final list of

Company Appeal (AT)(Ins) No.612/2021 38

prospective resolution applicants. In the 6th CoC dated 28.01.2021, the CoC discussed the resolution plans received and was not inclined to consider any resolution plan considering them to be not feasible and viable and pass resolution for initiation of liquidation process of the Corporate Debtor which is as follows:-

"RESOLVE THAT pursuant to Section 33(2) of the Insolvency and Bankruptcy Code, 2016 and the rules made thereunder, the consent of members of the Committee of Creditors be and is hereby accorded to approve the filing of an application with Hon'ble Adjudicating Authority, regarding the initiation of liquidation of Corporate Debtor and to appoint existing Resolution Professional, subject to given consent to act as liquidator, as the liquidator of the Corporate Debtor.

"RESOLVE FURTHER THAT in pursuant to Regulation 4(2) of 1BBI (Liquidation Process) Regulations, 2016, the liquidator shall be entitled to a fee of Rs. 1,25,000/- (Rs. One Lakh Twenty-Five Thousand only per month).

"RESOLVED FURTHER THAT the Resolution Professional be and is hereby authorized to submit an application before the Hon'ble Adjudicating Authority and to do all such acts, deeds and things as may be required or considered necessary or incidental thereto."

4.Looking at the application and averments thereof, we are of the considered opinion that this is a fit case for liquidation, therefore, we hereby order for liquidation of the company with directions as follows:

a. The Mr. Aishwarya Mohan Gahrana, holding Registration No.IBBI/IPA-002/1P-N00135/2017- 2018/10351 having email-aishwaryam_gahrana@yahoo.com is appointed as the Liquidator in terms of Section 32 of the Code;

b. Registry is directed to communicate this Order to the Registrar of Companies, NCT of Delhi & Haryana and to the Insolvency and Bankruptcy Board of India;

c. The Order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and a fresh Moratorium under Section 33(5) of the Insolvency and Bankruptcy Code shall commence;

d. This order shall be deemed to be a notice of discharge to the officers, employees and the workmen of the corporate

Company Appeal (AT)(Ins) No.612/2021 39

debtor as per Section 33(7) of the Insolvency and Bankruptcy Code, 2016;

e. The Liquidator is directed to proceed with the process of liquidation in a manner laid down in Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016 and in accordance with the relevant rules and regulations.

f. The Liquidator shall follow up and continue to investigate the financial affairs of the Corporate Debtor in accordance with provisions of Section 35(1) of the Code.

g. The liquidator shall also follow up the pending applications for their disposal during the process of liquidation including initiation of steps for recovery of dues of the Corporate Debtor as per law.

h. The Liquidator shall submit a Preliminary Report to the Adjudicating Authority within seventy-five days from the liquidation commencement date as per Regulation 13 of the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016;

i.Copy of this order be sent to the financial creditors, corporate debtor and the Liquidator for taking necessary steps;

j. IA-901/2021 filed in IB-470/(ND)/2019 is disposed of in terms of the aforesaid terms."

(B.S.V Prakash Kumar) Acting Chairperson

(Hemant Kumar Sarangi) Member (Technical)".

"Order dated 25.05.2021:

It is an application filed by an ex-director Mr. Rakesh Saxena

stating that the order dated 20.05.2021 mistakenly released in

the name of Acting President and the Hon'ble Member (Technical)

Company Appeal (AT)(Ins) No.612/2021 40

Shri Hemant Kumar Sarangi, but the matter was heard and had

been ordered by the Acting President and the Hon'ble Member

(Technical) Dr. V.K. Subburaj, therefore, sought for rectification of

the mistake crept in the said order.

On realising the mistake crept in, since the Hon'ble Member

(Technical) Dr. V.K. subburaj with whom this matter was heard

has already demitted Office, the order that has come in the name

of Acting President and Technical Member Shri Hemant Kumar

Sarangi is hereby declared as void and the matter is reopened for

hearing by the Regular Principal Bench i.e. the Acting President

and the Hon'ble Member (Technical) Shri Hemant Kumar Sarangi.

List IA 2323/2021 for hearing on 31.05.2021.

(B.S.V Prakash Kumar) Acting Chairperson

(Hemant Kumar Sarangi) Member (Technical)".

Admittedly first order i.e. 20.05.2021 was passed by a Division

Bench of which one of the Member i.e. Technical Member was not

party at the time of hearing and reserving orders. This was the

reason that on petition filed by one of the directors for rectification

of the order, the same Bench on 25.05.2021 declared the earlier

order i.e. order dated 20.05.2021 as void and directed to post on

Company Appeal (AT)(Ins) No.612/2021 41

31.05.2021 for hearing afresh and thereafter impugned order was

passed. If we examine both the orders i.e. 20.05.2021 and

31.5.2021 juxtapose we can draw an inference that same order i.e.

order dated 20.5.2021 has been reproduced on 31.05.2021.

Meaning thereby that without further hearing or rehearing the

earlier order was reproduced. On this score itself the impugned

order is liable to be set aside.

Considering the facts and circumstances which we have

elaborately discussed hereinabove it is evident that the RP had not

taken any reasonable step to get the CD as going concern which is

mandated as per Section 25(2)(h) or he acted in accordance with

Section 24 of the Code and as such there is no reason to allow the

impugned order to further continue. According the order dated

31.5.2021 passed in IA No.901/2021 in (IB)-470(ND)/2019 by

National Company Law Tribunal, Principal Bench, New Delhi is

hereby set aside and matter is remitted back to the NCLT to re-

examine the issue and consider to change the RP.

The holding of the CoC Meeting in the premises of the

Financial Creditor and also joint filing of the reply by RP and

financial creditor also reflects that something was going on in

between the parties.

Company Appeal (AT)(Ins) No.612/2021 42

Before parting with the order since we have noticed many

infirmities and illegalities committed by the RP, it is desirable to

direct IBBI to conduct an enquiry regarding conduct of the RP and

other circumstances which led to filing of petition under Section

33(2) of the IBC before the NCLT. During enquiry IBBI is also

required to examine as to whether in entire episode any cognisable

offence had come to fore or not. It goes without saying that the RP

was proceeding as a public servant and as such it was expected

that he will act independently. If during enquiry by the IBBI any

material comes showing prima facie commission of cognisable

offence, in that event, it would be appropriate for the IBBI to lodge

FIR for its statutory invention to its logic end.

The Registry is directed to communicate the order to IBBI

through its Chairman forthwith for its compliance.

(Justice Rakesh Kumar) Member (Judicial)

(Dr. Ashok Kumar Mishra) Member (Technical) bm

Company Appeal (AT)(Ins) No.612/2021