Sajeve Bhushan Deora. Rp Of Noslar ... vs Axis Bank Ltd. & Ors

Sajeve Bhushan Deora ...Appellant

Versus

Axis Bank Ltd. & Ors. ...Respondents

For Appellant: Shri Sajeve Deora - RP Miss Arunima Bhattacharjee for RP

For Respondents: Ms. Vanika Gupta, Advocate (Respondents 1 & 2) Shri Rohit Bhagat and Shri Saurabh Chadda, Advocates (Respondent No.3)

ORDER

14.11.2019 Heard the learned Resolution Professional who is present

in person and is the Appellant. This Appeal has been filed by the Resolution

Professional claiming that for keeping the Corporate Debtor - Noslar

International Limited a going concern, he had filed CA 622/2019 before the

Adjudicating Authority (National Company Law Tribunal, New Delhi Bench)

asking for directions to the Respondents 1 and 2 to release the margin money

held as Fixed Deposits against letters of credits established by Axis Bank on

behalf of the Corporate Debtor. When Application on this count came up

before the Adjudicating Authority. The Adjudicating Authority passed the

following Order:-

-2-

"ORDER

CA 622/2019 has been filed by the RP praying for directions to the Axis Bank to release the money kept as security. The same is required to meet the CIR costs.

The assets of the company, liquid or fixed should not be dissipated and shall be taken into consideration at the liquidation stage. The CIR costs should be met by the COC. At this stage we do not consider that the prayer of the RP should be allowed.

This petition is therefore being dismissed."

In view of directions given on 6th November, 2019, the Appellant has

filed Affidavit giving particulars of the funds and resources available with the

Corporate Debtor. The Appellant states that the Corporate Debtor was not in

production when CIRP process was initiated and he has tried to make part of

the Corporate Debtor functional but that did not yield much. It is stated that

it was thus, necessary to utilize the resources available and thus, the

Application was filed with the Adjudicating Authority but the Adjudicating

Authority did not agree to give directions to the Axis Bank.

The Appellant states that today is the last date for this CIRP process

even if the 90 days' window given by an amendment made to Section 12 in 3rd

Proviso is considered. It is stated that no Resolution Plan has been approved

as yet. The learned Resolution Professional fairly states that in the

circumstances as now appearing, liquidation is appearing to be unavoidable.

Company Appeal (AT) (Ins) No.741 of 2019 -3-

Having gone through the submissions made and the Impugned Order

and the developments as appearing where the Company is likely to go in

liquidation, we do not think that at the stage, we should interfere with the

Impugned Order where the Adjudicating Authority took a conscious decision

not to dissipate the assets of the Company. As per Section 25 of Insolvency

and Bankruptcy Code, 2016, Resolution Professional has duty to preserve and

protect the assets of Corporate Debtor including the continued business

operations and for the purpose, interim finance can be raised subject to

approval of COC. Adjudicating Authority directed that CIR costs should be

met by COC. There is nothing wrong in this.

In the circumstances, we dispose of this Appeal and the Appellant may

take further steps in the process before the Adjudicating Authority in terms

of the provisions of the IBC. As directed by Adjudicating Authority, it can

consider the question of conversion of security in Liquidation stage, if that

stage arrives. Appeal is disposed with directions as above.

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

[Kanthi Narahari] Member (Technical) /rs/md

Company Appeal (AT) (Ins) No.741 of 2019