Rikin Rameshchandra Parekh Proprietor ... vs Kalyan Janata Sahakari Bank Limited & ...

IN THE MATTER OF: Rikin Rameshchandra Parekh, Proprietor of Maharashtra Oil Mills ...Appellant

Versus

Kalyan Janata Sahakari Bank Ltd. & Ors. ...Respondents

Present: For Appellant : Mr. Dhaval Deshpande, Ms. Neha Arya, Advocates. For Respondents : Mr. Akshay Petkar, Mr. Devashish Godbole, Ms. Sanya Kumar, Mr. Harsh Jain, Advocates for R- 1&2. Mr. Amir Arsiwala, Advocate for R-3.

ORDER

(Hybrid Mode)

10.02.2026: Heard learned counsel for the Appellant, learned counsel

for the Financial Creditor - Respondent No. 1 and 2 as well as learned counsel

for the Ex-Resolution Professional. This appeal by the Successful Resolution

Application has been filed challenging the order dated 11.03.2024 passed in

I.A. No. 2300 of 2023 filed by the Respondent No.1 and 2 herein seeking

direction for payment of amount earned as profit by the Corporate Debtor. In

the said application only Resolution Professionals was impleaded as one of

the party. The Adjudicating Authority heard the application and by the

impugned order dated 11.03.2024 has allowed the application and issued

direction in Para 14 to the following effect:

"14. Therefore, in our considered view, under the peculiar facts and circumstances of this case, it would be just, fair and equitable if the surplus profits earned during the CIRP period are ordered to be enured to the

Cont'd.../ Financial Creditors of the Corporate Debtor which appears to be more in sync with the stipulation in the Resolution Plan which provides that all receivable shall go to the Resolution Applicant after the plan approval date and not prior to that. Accordingly, IA No. 2300/2023 stands allowed with an order that profits accrued during the CIRP shall be appropriated by the Financial Creditors."

2. Appellant aggrieved by the order has come up in this appeal. Learned

counsel for the Appellant submits that the application which was filed by the

Financial Creditor - Respondent No. 1 and 2 was going to directly affect the

rights of the Appellant who was the Successful Resolution Applicant and has

taken the Corporate Debtor as going concern and without impleadment of the

Successful Resolution Applicant in the application, the Adjudicating

Authority ought not to have decided the application. Furthermore, the plan

was approved by the Committee of Creditors on 24.02.2021 and approved by

the Adjudicating Authority on 19.10.2023. On the date when application was

allowed, the plan stood approved in which the Appellant was the Successful

Resolution Applicant, hence, it was necessary to given opportunity to the

Appellant. Learned counsel for the Appellant further submitted that although

there was no specific provision in the RFRP with respect to payment of any

profit earned during running of the Corporate Debtor but when the Appellant

has taken the Corporate Debtor as going concern, the Appellant was entitled

to all profit earned by the Corporate Debtor for which there is no specific

provision.

3. Learned counsel for the Financial Creditor refuting the submission of

learned counsel for the Appellant submits that the Appellant as per the

Company Appeal (AT) (Ins.) No. 758 of 2024 2 of 5 various clauses of the Resolution Plan the Appellant was entitled for

receivables only from the effective date and any amount which was earned as

profit by the Corporate Debtor was required to be distributed amongst the

Financial Creditors and the Adjudicating Authority has rightly passed the

order passing said amount to the Financial Creditors. It is submitted that it

was open for the Appellant to file application for impleadment/intervention in

the application filed by the Financial Creditors.

4. Learned counsel for the Resolution Professional submits that on the

date when order was passed i.e. 11.03.2024, the Resolution Professional has

already been discharged after approval of the Resolution Plan. Learned

counsel for the Resolution Professional submits that there being no specific

provision in the Resolution Plan, the Resolution Professional has no opinion

on the said issue and it is for the Adjudicating Authority to consider and

decide the issue.

5. In this appeal we have passed an interim order on 23.04.2024 under

which the amount was directed to be kept in a fix deposit to earn interest and

shall not distribute the same till further orders. Interim order passed on

23.04.2024 is as follows:

"In the meantime, the Resolution Professional shall keep the amount in question in a fixed deposit to earn interest and shall not distribute the same till further orders."

6. Learned counsel for the Financial Creditor submits that the amount is

still lying in the fixed deposit and has not been distributed.

Company Appeal (AT) (Ins.) No. 758 of 2024 3 of 5

7. We have heard the learned counsel for the parties and perused the

record.

8. The Resolution Plan submitted by the Appellant was approved by the

CoC on 24.02.2021 and the Adjudicating Authority approved the said

Resolution Plan on 19.10.2023. Application I.A. No.2300 of 2023 was heard

subsequently on 31.10.2023 and 10.11.2023. A copy of the application has

brought on the record as Annexure A-16. In the application dated 22.04.2023

Resolution Professional alone was impleaded, where following prayers has

been made:

"a. This Hon'ble Tribunal be pleased to direct the Respondent, Resolution Professional to forthwith withdraw letter dated 01.02.2023;

b. This Hon'ble Tribunal be pleased to direct the Respondent to give account of the profits earned during the CIRP Period minus the Costs;

c. This Hon'ble Tribunal be pleased to direct the Respondent to deposit the profits accrued during CIRP Period with the Applicants and other Financial Creditors, at the time of closing of the Resolution Process.

d. Any other reliefs that this hon'ble tribunal be pleased to give;

e. For costs;"

9. The issue which was sought to be raised in the application was

entitlement of the profit accrued during CIRP period. The Resolution Plan

having approved by the CoC on 24.02.2021 much prior to filing of the

application, we are of the view that Appellant was necessary party to be heard

Company Appeal (AT) (Ins.) No. 758 of 2024 4 of 5 before passing any order on the application. We, thus, are of the view that

the submission advanced by learned counsel for the Appellant that order has

been passed without giving opportunity to the Successful Resolution

Applicant has substance and we are of the view that the order impugned need

to be set aside and the I.A. No.2300 of 2023 be revived before the Adjudicating

Authority for fresh consideration. We permit the Appellant to be impleaded

as Respondent No.2 in the application and also grant opportunity to the

Appellant to file reply to the application within two weeks. Both the parties

are given liberty to file an application before the Adjudicating Authority for

fixing a date for fresh consideration of the I.A. No.2300 of 2023. We also

request the Adjudicating Authority to decide the application expeditiously as

early as possible. Appeal is disposed of accordingly.

10. We make it clear that we have not expressed any opinion on the merits

of contentions of either of the parties and it is for the Adjudicating Authority

to consider the same and take a decision in accordance with law.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Archana/md

Company Appeal (AT) (Ins.) No. 758 of 2024 5 of 5