Ramkrishna Forgings Limited vs Ravindra Loonkar Resolution ...
- CitationCompany Appeal (AT) (Insolvency) No. 845 of 2021
Ratio decidendi
The rule this decision rests on
The Adjudicating Authority, in a resolution plan approval under the Insolvency and Bankruptcy Code, is not bound to act as a rubber stamp; where the figures involved (a very high haircut and emerging valuation and avoidance-transaction material) raise a genuine doubt, it may call for an expert valuation of the corporate debtor's assets before approving the plan, notwithstanding that the commercial wisdom of the Committee of Creditors is ordinarily supreme and not to be interfered with in normal circumstances. A Resolution Professional, being an officer of the Adjudicating Authority, may properly be directed to co-operate with the Official Liquidator in the valuation exercise, and such a direction, unaccompanied by any adverse finding against him, is not a ground for appeal by him.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Company Appeal (AT) (Insolvency) No. 845 of 2021 IN THE MATTER OF: Ramkrishna Forgings Ltd. Ramkrishna Chambers 72, Shakespeare Sarani, Kolkata - 700 017, West Bengal ...Appellant
Vs. 1.Ravindra Loonkar R.P. of ACIL Ltd. R/O Flat No. C-49C, Gangotri Enclave, Alaknanda New Delhi - 110019 Registered Office at Ground Floor, Building No. 108/B Madangir Village, New Delhi - 110062 ...Respondent No.1
2.Commitee of Creditors of ACIL Ltd Through IDBI bank IDBI Tower, WTC Complex, Cuffe Parade, Mumbai - 400 005 ...Respondent No.2 Present: For Appellant : Mr. K. Datta, Sr. Advocate along with Mr. Prateek Kumar, Ms. Smriti Nair & Ms. Mehak Khurana, Advocates. For Respondents: Mr. Ravindra Loonkar, RP of ACIL Ltd. Mr. Abhishek Sharma, Ms. Ruchi Goyal, Mr. Sumant Batra, Ashly Cherian, Ms. Anisha Mahajan, Advocates for RP/R-1. Mr. Rajive R. Raj, Advocate for R-2/CoC. With Company Appeal (AT) Insolvency No. 1034 of 2021 IN THE MATTER OF: Ravindra Loonkar R.P. of ACIL Ltd. R/O Flat No. C-49C, Gangotri Enclave, Alaknanda
Company Appeal (AT) (Ins) No. 845 & 1034 of 2021
Page 1 of 5 New Delhi - 110019 Registered Office at Ground Floor, Building No. 108/B Madangir Village, New Delhi - 110062 ...Appellant Vs. Official Liquidator (Attached to the High Court of Delhi) Ministry of Corporate Affairs Government of India, 8th Floor, Lok Nayak Bhawan Khan Market, Sujan Singh Park, New Delhi - 110 003 ...Respondent Present: For Appellant : Mr. Sumant Batra, Mr. Abhishek Sharma, Mr. Ashly Cherian, Ms. Ruchi Goyal and Ms. Anisha Mahajan, Advocates. For Respondent: JUDGMENT
DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER
1. The Appeal - Company Appeal (AT) (Ins) No. 845 of 2021 has been
filed by Appellant under section 61 of the 'Insolvency and Bankruptcy
Code, 2016' (in short 'Code') against the impugned order dated
01.09.2021 passed by the 'Adjudicating Authority' (National Company
Law Tribunal), Principal Bench, New Delhi in CP(IB) -170(PB)/2018
in IA No. 1636/2019 for keeping the approval of the 'Resolution Plan'
in abeyance and has directed the 'Official Liquidator' (OL) to provide
exact figures / value of the asset and exact valuation details within
three weeks from the date of the receipt of the order and also directed
to 'Resolution Professional' (RP) to file the two valuations reports
Company Appeal (AT) (Ins) No. 845 & 1034 of 2021
Page 2 of 5 obtained by him before the next date of hearing and matter was posted
to 05.10.2021 for further consideration and on 05.10.2021 getting no
reports, the Adjudicating Authority heard the same CP(IB) -
170(PB)/2018 and directed the RP to submit all the particulars
pertaining to intangible/tangible assets of the company to the OL and
has also permitted the OL to proceed with the valuation to get the right
information and valuation of the property and has asked RP to also co-
operate with the OL.
2. The Appeal - Company Appeal (AT) (Ins) No. 1034 of 2021 has been
filed by the RP of the Corporate Debtor (CD) under CIRP being
aggrieved by the observation / adverse remark passed by the
Adjudicating Authority in the impugned order dated 05.10.2021 in CP
(IB) 170/(PB)/2018.
3. Both the Appeals are arising from the same impugned order dated
01.09.2021/05.10.2021 in CP(IB) 170 /(PB)/2018 so it was thought fit
and proper to hear the case together and dispose off accordingly.
4. The brief fact of the case is that during the CIRP of the CD (ACIL
Limited) the amount claimed is of Rs.1830/- Crore approx., amount
admitted is Rs.1782 /- Crore approx. and amount provided under the
plan is Rs.105/- Crore approx. so haircut is approximately 94 to 99%
for the different classes of the creditors (appearing at page 280-281 of
the Appeal paper book). Fair value is Rs. 130 Crore approx. and
Company Appeal (AT) (Ins) No. 845 & 1034 of 2021
Page 3 of 5 Liquidation Value is Rs.102 Crore approx. The amounts involved of the
banks is over Rs. 1,600/- Crore approx. against which they will be
getting less than Rs. 80 crores approx., as upfront payment and in 'Non-
Convertible Debenture' (NCD) of Rs.24 Crore. So, the 'Adjudicating
Authority' has just asked for the Expert opinion on the asset's
valuations of the Company.
5. The Adjudicating Authority has directed on 01.09.2021 for further
consideration on 05.10.2021. The Adjudicating Authority has not
received the Expert opinion by the date. So, on 05.10.2021 the
Adjudicating Authority has asked RP to co-operate with the OL and to
submit all the particulars pertaining to the assets of the Company. The
Adjudicating Authority is not a rubber stamp, he has to satisfy himself
within the boundary of the provisions of the Code and the law laid
down. If some suspicion arises on hair cut of 94 to 99%, it has to satisfy
itself.
6. It appears from para 7.4 of CA(AT) (Ins) No. 1034 of 2021 that the two
registered valuers so appointed by the RP has submitted their report on
11.02.2019 and 14.02.2019 but on 24.06.2019 it came to the knowledge
of the RP that the Land bearing plot /site No.GH38 (Land) Sector 1
IMT, Manesar (Haryana) was allotted by HSIIDC to the CD (in CIRP)
in the year 2007 and then some addendum was provided in July, 2019
by the valuers.
Company Appeal (AT) (Ins) No. 845 & 1034 of 2021
Page 4 of 5
7. Avoidance transactions of approximately Rs.1000/- Crore has also
come to the light on para d. (appearing at page 8 of CA(AT) (Ins) No.
1034 of 2021). No doubt, it is a settled law that commercial wisdom
of the 'Committee of Creditors' (CoC) is 'supreme' and cannot be
interfered in a normal circumstance but when 'figures of crore' are
emerging stagewise then there is no harm to look at the Expert opinion
which the Adjudicating Authority in this case has asked for.
8. As far as the RP is concerned, he is treated as an 'officer' of the court
and as appears to us, no adverse comment has been passed against him.
He has only been requested to co-operate with the OL. There is nothing
adverse against him.
9. In view of the above stated facts, we do not find any merits in these
appeals and accordingly, we are disposing off these appeals. No order
as to costs.
[Justice Ashok Bhushan] Chairperson
(Dr. Ashok Kumar Mishra) Member(Technical)
19th January, 2022 New Delhi Raushan.k
Company Appeal (AT) (Ins) No. 845 & 1034 of 2021
Page 5 of 5
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