Securities And Exchange Board Of India vs Mr Girish Shriram Juneja & Anr

[Arising out of Order dated 27.07.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Court-III in I.A. No.3787 of 2022 in C.P. 1067/I&B/MB/2019]

In the matter of:

Securities and Exchange Board of India ...Appellant Vs.

Mr. Girish Siriram Juneja & Anr. ...Respondents For Appellant: Mr. Neeraj Malhotra, Sr. Advocate with Mr. Dhaval Mehrotra, Ms. Aditi Desai and Mr. Nimish Kumar, Advocates.

For Respondents: Mr. Jay Zaveri and Mr. Harsh Saxena, Advocates for R-1.

JUDGMENT

(6 December, 2023) th

Ashok Bhushan, J.

1. This Appeal by Securities and Exchange Board of India has been filed

against the order dated 27.07.2023 passed by the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench, Court-III in I.A. 3787 of

2022 in C.P. 1067/I&B/MB/2019. IA No.3787 of 2022 was filed by the

Appellant praying for several reliefs in the CIRP of the Corporate Debtor

namely-- 'Osian's Connoisseurs of Art Private Limited'. The Adjudicating

Authority after hearing the Appellant as well as the Resolution Professional 2

has rejected the IA No.3787 of 2022. Aggrieved by the aforesaid order, this

Appeal has been filed.

2. Brief facts of the case necessary to be noticed for deciding this Appeal

are:-

2.1. 'Osian's Connoisseurs of Art Private Limited', the Corporate Debtor was

founded in 2000. Corporate Debtor was in business of artworks and has its

own auction house and the centre for research and documentation. The

Corporate Debtor sponsored a private trust called 'Osian Art Fund' under the

Indian Trusts Act, 1882. 'Oseta Investments Trustee Company Pvt. Ltd.'

("Oseta" or "Trustee") for short) was appointed as a Trustee of the Trust. The

Trust Deed was executed on 10.03.2006 between the trustee and the

Corporate Debtor and an Asset Management Agreement dated 08.06.2006

was executed between Oseta and the Corporate Debtor under which the

Corporate Debtor was to act as an Asset Management Company of the Trust

('Osian Art Fund'). The Corporate Debtor launched a fund, "The Osian's Art

Fund Scheme Contemporary 1" inviting subscription from private investors

in order to make investments in artworks and an amount of

Rs.1,02,40,00,000/- was collected from 656 investors for the said purpose.

SEBI, the Appellant herein issued a show cause notice and initiated

proceeding under the Securities & Exchange Board of India Act, 1992 against

the Corporate Debtor holding a duty of sponsoring and managing 'Collective

Investment Scheme' without obtaining the Registration Certificate under

Section 12(1B) of the SEBI Act, 1992 and Regulation 3 of the SEBI (Collective

Investment Scheme) Regulations, 1999. After certain litigations between the

Company Appeal (AT) (Insolvency) No. 1252 of 2023 3

SEBI and the Corporate Debtor final order was passed by SEBI on 28.05.2021

under Section 11 and Section 11B of the SEBI Act, 1992 directing 'Osian's

Connoisseurs of Art Private Limited' to refund the balance amount to

remaining investors along with the interest @10% p.a. Direction was also

issued that 'Osian's Connoisseurs of Art Private Limited' shall not alienate or

dispose of or sell any assets except for the purpose of making refund to its

investors as directed by the order. Direction under paragraph 16 (a) was to

come in effect w.e.f. 01.07.2021, balance was to be refunded within six

months from the date of an order. On a Company Petition filed by IDBI Bank

against the 'Osian's Connoisseurs of Art Private Limited', proceedings under

Section 7 was initiated by order dated 19.12.2021 passed by the Adjudicating

Authority and Respondent No.1- Mr. Girish Siriram Juneja was appointed as

Resolution Professional of the Corporate Debtor. On 09.05.2022, SEBI

informed the Corporate Debtor that in view of the non-compliance of the SEBI

order dated 28.05.2021, recovery proceedings would be initiated against the

Corporate Debtor. On 20.05.2022, Shri Neville Tuli, Suspended Director of

the Corporate Debtor wrote to the Manager Investment Department-1 of the

Appellant that the CIRP has been initiated against the Corporate Debtor and

the Art Fund's inventory has been handed over to the Resolution Professional.

SEBI sent an e-mail on 27.09.2022 to the Resolution Professional to refund

the amount to the investors pursuant to the SEBI's order dated 28.05.2021.

The Resolution Professional replied the e-mail vide e-mail dated 03.10.2022.

SEBI vide e-mail dated 23.11.2022 called the Resolution Professional to

clarify as to how the amount directed to be refunded to the investors pursuant

to SEBI's order has been included in the Resolution Plan and not kept aside.

Company Appeal (AT) (Insolvency) No. 1252 of 2023 4

Resolution Professional vide e-mail dated 07.12.2022 wrote to the SEBI that

the amount from the Art Fund was considered in the resolution plan, which

provides that all claims arising on account of OAF shall be paid out of the

proceeds of sale of assets belonging to OAF and that no valid claims arising

out of SEBI's order dated 28.05.2021 were received. Resolution Plan having

been approved by the CoC in the CIRP, the Resolution Professional filed an IA

No.2645 of 2022 before the Adjudicating Authority for approval of the

Resolution Plan. On 12.12.2022, SEBI filed an IA No.3787 of 2022 before the

Adjudicating Authority where following prayers have been made:-

"i. That this Hon'ble Tribunal be pleased to declare that the sum of Rs. 30,86,62,832/-(Rupees Thirty Crore Eighty Six Lakh Sixty Two Thousand Eight Hundred and Thirty Two only), along with the interest at the rate of 10% per annum on the principal amount collected from the investors, from the date when the amount to such investors first became due and till the date of closure of its scheme, to the Investors of 'Art Fund' which is subject matter of the SEBI Order dated 28.05.2021 be kept outside the resolution process/plan as it does not form part of the properties and assets of the Corporate Debtor;

ii. That this Hon'ble Tribunal be pleased to direct the Resolution Professional to comply with the SEBI Order dated 28.05.2021 and to forthwith pay to the Applicant an amount of Rs. 30,86,62,832/- (Rupees Thirty Crore Eighty Six Lakh Sixty Two Thousand Eight Hundred and Thirty Two only), along with the interest at the rate of 10% per annum on the principal amount collected

Company Appeal (AT) (Insolvency) No. 1252 of 2023 5

from the investors, from the date when the amount to such investors first became due and till the date of closure of its scheme, to the Investors of 'Art Fund';

iii. This Hon'ble Tribunal be pleased to pass such other or further orders as this Hon'ble Tribunal may deem fit in the facts and circumstances of the case, in the interest of justice and equity."

2.2. The Resolution Professional filed an Affidavit in reply to IA No.3787 of

2022 to which Rejoinder was also filed. Adjudicating Authority vide order

dated 27.07.2023 rejected the IA. Adjudicating Authority held that the

Resolution Plan deals only with assets and liabilities of the Corporate Debtor

and no direct investment/deposit from OAF reflects in the books of the

Corporate Debtor. However, the Resolution Plan deals in a broad manner with

the manner of compliance of the order of the SEBI dated 28.05.2021. The

Adjudicating Authority further held that the Corporate Debtor is a distinct

entity from OAF with segregated assets and, as admitted by the SEBI the

funds of OAF do not form part of the assets of the Corporate Debtor. Aggrieved

by the order of the Adjudicating Authority, this Appeal has been filed.

3. We have heard Shri Neeraj Malhotra, Learned Senior Counsel for the

Appellant and Shri Jay Zaveri, Learned Counsel appearing for the Resolution

Professional.

4. Shri Neeraj Malhotra, Learned Senior Counsel appearing for the

Appellant submits that the Corporate Debtor is asset management company

of the trust i.e. OAF and all inventories and assets of the OAF has been

Company Appeal (AT) (Insolvency) No. 1252 of 2023 6

handed over to the Resolution Professional and was communicated by letter

dated 20.05.2022 of the Suspended Director of the Corporate Debtor.

Appellant being in possession of assets of the Corporate Debtor, the amount

of Rs.30,86,62,832/- which is still to be refunded to the investors need to be

kept separate from the CIRP of the Corporate Debtor. It is submitted that the

aforesaid amount belongs to the OAF which is a trust, hence, the said amount

does not belong to the assets management company i.e. Corporate Debtor by

virtues of clause (a) of explanation to Section 18 of the IBC which provides

that asset held in trust by the Corporate Debtor shall not be included in the

assets of the Corporate Debtor, hence, the Resolution Professional was obliged

to keep apart the total investment as investors to be returned under the

Scheme to the investors. It is submitted that due to the above reason, the

prayer was made to keep Rs.30,86,62,832/- apart from the assets of the

Corporate Debtor which application has wrongly been rejected by the

Adjudicating Authority. It is submitted that all inventories of the OAF i.e. trust

having come in the hands of the Corporate Debtor which has been handed

over to the Resolution Professional, the Resolution Professional has to keep

the aforesaid amount separately and not to deal the said amount in the

Resolution Process of the Corporate Debtor. It is submitted that the order

dated 28.05.2021 passed by the Appellant directing for refund to the investors

along with the interest have become final which need to be complied with. It

is submitted that since the assets of the OAF i.e. trust has been handed over

to the Resolution Professional, IA No.3787 of 2022 was filed for keeping the

amount separate. It is submitted that if the assets of the OAF i.e. Trust are

also dealt in the CIRP of the Corporate Debtor, Appellant's direction issued on

Company Appeal (AT) (Insolvency) No. 1252 of 2023 7

28.05.2021 shall become impossible to the complied causing great prejudice

to the Appellant.

5. Learned Counsel for the Resolution Professional refuting the

submissions of the Counsel for the Appellant submits that the assets of the

Corporate Debtor and assets of OAF are separate and distinct. It is submitted

that the Corporate Debtor was only asset manager of OAF the trust. Monies

under the OAF do not form part of the assets of the Corporate Debtor and

have not been recorded in the information memorandum prepared under the

CIRP of the Corporate Debtor. The Resolution Professional has also got

forensic audit conducted which report has been produced substantiating the

fact that the Corporate Debtor and OAF are two distinct entities with

segregated assets. It is submitted that in the Resolution Plan of the Corporate

Debtor, the assets of OAF are not being dealt with. It is submitted that in spite

of Appellant writing to the Resolution Professional to send the requisite form

for filing the claim, no claim has been filed by the Appellant in the CIRP of the

Corporate Debtor. It is submitted that the Resolution Plan contains a clause

for manner of compliance of the order of the SEBI dated 28.05.2021 by the

Successful Resolution Applicant after the plan is approved. It is submitted

that the amount received by OAF by the investors was the monies and

properties of the OAF and are controlled by the trustee- Oseta. The Corporate

Debtor who is asset manager as per the agreement dated 08.06.2006 was

entitled only to 3% of the commission and the assets of the OAF never came

in the kitty of the Corporate Debtor. It is submitted that the Adjudicating

Authority has rightly held that no direct investment/deposit OAF reflects in

Company Appeal (AT) (Insolvency) No. 1252 of 2023 8

the books of the Corporate Debtor. When no direct investment/deposit of the

books of the Corporate Debtor, there is no question of keeping any amount of

Rs.30,86,62,832/- separate by the Resolution Professional. The Application

filed by the Appellant has rightly been rejected by the Adjudicating Authority

which warrant no interference.

6. We have considered the submissions of the Counsel for the parties and

perused the record.

7. Before we proceed to enter into the respective submissions of both the

parties, it is relevant to notice the order passed by the Appellant dated

28.05.2021 under Section 11 and Section 11B of the SEBI Act, 1992.

Directions issued by the SEBI in the said order is contained in paragraph 16.

Paragraphs 16 to 19 of the order are as follows:-

"16. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11 and 11B read with Section 19 of the SEBI Act, 1992 and Regulation 65 of CIS Regulations, hereby issue the following directions:

a. Osian shall refund the balance amount to remaining Investors. Osian shall also pay on the total principal amount collected from each of the remaining investors, an interest at the rate of 10% per annum, from the date when amount to such Investors first became due and till the date of closure of its scheme. The aforesaid balance amount shall be refunded within a period of Six months from the date of this order and the

Company Appeal (AT) (Insolvency) No. 1252 of 2023 9

aforesaid interest on total amount shall be paid within a period of Nine months from the date of coming into force of this order.

b. Osian shall file winding up and repayment reports, duly certified by an auditor, to SEBI in the format provided under SEBI (Collective Investment Schemes) Regulations, 1999, along with the trail of funds claimed to be so refunded, bank account statements indicating refund to the investors and receipt from the investors acknowledging such refunds, within a period of 15 days after the expiry of aforesaid Six months and Nine months period, respectively, as referred in para 16(a) above. These reports shall be forwarded by Osian to "The Division Chief, EFD, DRA-3, Securities and Exchange Board of India, SEBI Bhawan, Plot NO. C4 A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051.

c. Osian shall not alienate or dispose of or sell any assets except for the purpose of making refund to its investors, as directed above.

d. SEBI, on failure of Osian Capital Art Fund, to effect the refunds as directed in the para 16(a) or to file reports as directed in para 16(b), above, within the period provided thereunder, shall recover such amounts, in accordance with Section 28A of the SEBI Act, 1992.

e. Other directions, as contained in paragraph 45(b) and (c) of the SEBI order dated April 15, 2013 passed against the Noticees shall remain

Company Appeal (AT) (Insolvency) No. 1252 of 2023 10

intact and be mutatis mutandis enforced against the Noticee subject to the directions given above.

f. The direction in para 16(c) above shall cease to operate once Osian has complied with the directions in para 16(b) above.

17. The direction for refund, as given in paragraph 16(a) above, does not preclude the investors, to pursue the other legal remedies available to them under any other law, against the Noticee for refund of money as per the terms of their Investment or deficiency in service before any appropriate forum of competent jurisdiction.

18. The order shall come into force with immediate effect. However, In view of the exceptional circumstances emerged due to the outbreak of a COVID-19 and consequential lockdowns imposed in different parts of the country, the direction given in paragraph 16(a) shall come into force on July 01, 2021.

19.A copy of this order shall also be sent to the Noticee, Mr. A. K. Muthuswamy. recognised Stock Exchanges, the relevant banks, Depositories and Registrar and Transfer Agents of Mutual Funds to ensure that the directions given above are strictly complied with."

8. A perusal of the order indicate that the Corporate Debtor was to comply

the order within six months. The direction under paragraph 16(a) came into

force only on July 2021 and before the period of six months was expired. CIRP

against the Corporate Debtor commenced on 19.01.2021. The Appellant is

Company Appeal (AT) (Insolvency) No. 1252 of 2023 11

well informed about the CIRP of the Corporate Debtor. Appellant himself has

brought on record a letter dated 20.05.2022 sent by the Suspended Director

of the Corporate Debtor informing about the commencement of the CIRP.

Learned Counsel for the Appellant has pressed his submission that the

Suspended Director has informed the Appellant that all the other assets and

liabilities have been handed over to the Resolution Professional. The Appellant

vide its e-mail dated 27.09.2022 asked the Resolution Professional to send

the form required for filing claims. The e-mail dated 27.09.2022 is as follows:-

"From: MEDHA SONPAROTE Sent: 27/09/2022 15:05 To: Junejagirish31@gmail.com Cc: SHRADDHA JOSHI Subject: Refund to investors as per SEBI order dated 28/05/2021

Sir/Madam,

SEBI has passed an order dated 28/05/2021 (copy attached).

Out of the total amount of Rs.1,02,40,00,000/- collected by Osian from the 656 Investors. An amount of Rs.30,86,62,832/- is yet to be refunded to investors by the Noticee.

Thus, Osian must return the amounts or SEBI may recover as per the SEBI order.

As per records on IBBI, you have been appointed as the resolution professional.

It is requested that the form required for filing claims may be sent to the undersigned for the purpose of filing claims.

Medha Sonparote General Manager, EFD1 Securities and Exchange Board of India 1st Floor, SEBI New premises Plot No.C-7, G Block, Bandra Kurta Complex (BKC), Bandra (E), Mumbai- 400051

Company Appeal (AT) (Insolvency) No. 1252 of 2023 12

Tel: (022) 2644 9312 Email: medhad@sebi.gov.in"

9. It is relevant to notice that no claim was filed by the Appellant in the

CIRP of the Corporate Debtor. However, Resolution Professional was well

aware of the order dated 28.05.2021 passed by the SEBI issuing direction

against the Corporate Debtor to refund the amount with interest to investors.

The said was shown both in the information memorandum as well as in the

Resolution Plan. The Resolution Plan contains a clause which has been noted

by the Adjudicating Authority in paragraph (q) which is to the following effect:-

"Contingent liability (if any), arrived after the approval of Resolution Plan, such liability shall be taken into consideration and the payment will be made with other operational creditor from the amount offered to their category. Further, the contingent liability which may arise on account of "Osian's Art Fund" shall only be paid out the proceeds of Sale of Assets belonging to the said fund."

10. The principal submission which was advanced by the Appellant is that

the Resolution Professional is obliged to keep an amount of Rs.30,86,62,832/-

separate from CIRP of the Corporate Debtor it being amount due to be

refunded as per the order dated 28.05.2021. The contention is that the said

amount belongs to OAF and was amount held in trust by the Corporate

Debtor, the asset management company it could not form the part of the CIRP

of the Corporate Debtor. The prayer to the aforesaid has been made in the

Application IA No.3787 of 2022 filed by the Appellant before the Adjudicating

Authority. The Resolution Professional filed a detailed reply to the said

Company Appeal (AT) (Insolvency) No. 1252 of 2023 13

application before the Adjudicating Authority. An Affidavit has also been filed

by the Resolution Professional in the Appeal. In the Affidavit, Resolution

Professional has given in detail the facts of the case and plea taken by the

Resolution Professional. The Resolution Professional in its Affidavit has

reiterated that the monies in the OAF do not form part of the assets of the

Corporate Debtor and they have not been recorded in the information

memorandum dated February, 2022 prepared under the IBC. Resolution

Professional has further pleaded that Pipara & Co. LLP. Chartered

Accountants has been directed to carry out a forensic audit with a view to

investigate the transactions between the Corporate Debtor and OAF and a

report has been submitted by forensic audit. It is useful to extract pleadings

in paragraphs 6 and 7, which are to the following effect:-

"6. In the aforesaid background and in response to the limited issue raised before the Hon'ble Tribunal on the OAF monies being available with the Corporate Debtor and/or considered as an asset of the Corporate Debtor, I say and submit that the monies under the OAF do not form part of the assets of the Corporate Debtor and have accordingly not been recorded in the Information Memorandum dated February 2022 prepared under the Code: Further, Pipara & Co. LLP. Chartered Accountants have carried out a forensic audit with a view to investigate the transactions occurring between the Corporate Debtor and OAF. In such audit, it has been observed by the auditor, that no direct investment/deposit from OAF reflects in the books of the Corporate Debtor. A copy of the Information Memorandum dated February

Company Appeal (AT) (Insolvency) No. 1252 of 2023 14

2022 is hereto annexed and marked as 'ANNEXURE R-1' A copy of the said forensic audit is annexed to the captioned Appeal and marked as ANNEXURE Q.'

7. It is further reiterated that the forensic audit produced by the Respondent has substantiated the fact that the Respondent and OAF were two distinct entities with segregated assets, thus the only manner in which the Respondent could assure compliance with the SEBI Order amidst the Insolvency Proceedings would be by notifying the Resolution Applicant of the same vide the resolution plan. I say that the refund amount has been dealt with in the resolution plan in a limited scope in relation to the compliance of the SEBI Order and the liability as an asset manager Relevant portion of the approved resolution plan provides as follows:

"the contingent liability which may arise on account of "Osian's Art Fund shall only be paid out of the proceeds of sale of assets belonging to the said fund"

11. The Resolution Professional in the Affidavit has also extracted various

clauses of trust deed dated 10.03.2006 as well as relevant clauses of

information memorandum. Paragraph 1.5 of the Affidavit of the Resolution

Professional extract certain clauses from the information memorandum

circulated to the investors relating to OAF 'The Osian's Art Fund Scheme

Contemporary 1'. It is useful to extract paragraph 1.5 of the Affidavit, which

is as follows:-

Company Appeal (AT) (Insolvency) No. 1252 of 2023 15

"1.5. Evidentiary clauses from the Information Memorandum circulated to investors relating to 'Osian's Art Fund Scheme Contemporary 1':

"Osian's shall act as both Sponsor und Asset Management Company for the Art Fund. The Art Fund has established appropriate mechanisms for the segregation of the separate functions being performed by Osian's in its capacities as the Sponsor and the Asset Management Company" (Ref: Pg. 7)

II. The Trustee Company has exclusive ownership of the assets of the Schemes of the Art Fund ("Trust Property") and holds the same in trust and for the benefit of the Unit Holders for the purpose of collecting capital from select investors fur collective investment by way of acquisition, holding, management, trading or disposal of Indian and foreign art or any other property..".

(Ref: Pg. 19)

"II. The Trustee Company is responsible for the management of the Art Fund and for providing information to the Unit Holders, the Sponsor, and any other regulatory body and to ensure compliance by the Art Fund AMC of all statutory formalities. (Ref.: Pg. 19)

"II. The Trustee Company, through the AMC is, inter alia, empowered and entitled to:

(i) "Pay all costs, charges expenses and outgoings of and incidental to the administration and

Company Appeal (AT) (Insolvency) No. 1252 of 2023 16

execution of the Trust and the management and maintenance of the Trust Property and incurred for the same (including remuneration of the Trustee Company and the AMC)..." (Ref.: Pg. 20)

(o) "Take into its custody and/or control all the capital, assets. property of the scheme floated by the Art Fund and hold the same in trust for the Unit Holders in accordance with the Trust Deed." (Ref:

Pg. 22)

"D. I. The AMC shall manage the schemes of the Art Fund in accordance with the provisions of the Asset Management Agreement, the Trust Deed and the objectives of each scheme option. The AMC can be removed by the Trustee." (Ref.: Pg. 28)

"III. The AMC shall exercise these powers subject to the superintendence, control and direction of the Board of Directors of the Trustee Company" (Ref: Pg. 31) "III. The duties and obligations of AMC shall include:

(i) ensure that the Art Fund is segregated from assets of the AMC and assets of any other funds for which the AMC is responsible. (Ref: Pg. 33)

"X.A. Osian's Art Fund has not had any transactions with the Sponsor or any of the Sponsor's associates from the date of registration till the date of the Information Memorandum." (Ref.:

Pg. 66) (emphasis supplied)

Company Appeal (AT) (Insolvency) No. 1252 of 2023 17

A copy of the Information Memorandum circulated to investors relating to "Osian's Art Fund Scheme Contemporary 1' is hereto annexed and marked as ANNEXURE R-5"

12. The Adjudicating Authority after considering the submissions of the

parties has returned a finding in paragraph 6 to the following effect:-

"6. As rightly contended by the RP the Resolution Plan deals only with assets and liabilities of the Corporate Debtor and no direct investment/deposit from OAF reflects in the books of the Corporate Debtor."

13. The Adjudicating Authority also while returning the finding observed

following in paragraphs 2, 3 and 4:-

"2. The sole reason for the SEBI for imposing liability upon the Corporate Debtor is that the Corporate Debtor acted as the Assets Manager of OAB and the deposits were collected from investors under "CIS" without approval from SEBI. The Corporate Debtor is a distinct entity from OAF with segregated assets and, as admitted by the SEBI the funds of OAR do not form part of the assets of the Corporate Debtor. All the times the Trust property of OAF was held in trust for the investors by the Trustee company and the said property was never in possession of the Corporate Debtor and the Corporate Debtor merely managed in the capacity

Company Appeal (AT) (Insolvency) No. 1252 of 2023 18

as an Asset's Manager on behalf of the Trustee company. SEBI having requested the RP to send the claim form in order to submit their claim before the RP did not choose to file the same for the reasons best known to them.

3. Even though SEBI did not submit their claim, the issue of refund of SEBI's amount has been dealt with by COC as well as in the Resolution Plan in a broad manner; and in order to comply the SEBI Order. It is provided that after approval of the Resolution Plan, the Resolution applicant shall take over the management of the Corporate Debtor and shall once again become the Asset's Manager of OAF and at such time the SRA would then be able to take successful steps towards the execution of the SEBI Order and the monies may be refunded to the investors. Since, the issue of approval of Resolution Plan is subjudice before this Tribunal, this Tribunal is not expressing anything about the entitlement of the Corporate Debtor to continue as the Asset's Manager of the OAF.

4. As rightly contended by the RP, SEBI cannot insist for compliance of its order by RP after commencement of moratorium and knowing well that the Corporate Debtor is merely an Asset's manager of the OAF. The above application is nothing but an illegal attempt by SEBI to enforce the order knowing well that the moratorium U/s 14 has kicked in against the Corporate Debtor and no legal proceedings can be instituted or continued against Corporate Debtor."

Company Appeal (AT) (Insolvency) No. 1252 of 2023 19

14. The Appellant in its application had prayed to keep apart the amount

of Rs.30,86,62,832/- as if the said amount belonging to OAF has been

received by the Corporate Debtor and need to be separated and segregated

from the CIRP of the Corporate Debtor. The Resolution Professional has

directed for forensic audit which report has also been received and has been

relied by the Resolution Professional. It is not shown as per the forensic report

that the amount of Rs.30,86,62,832/- belonging to OAF lying with the

Corporate Debtor or is reflected in the accounts of the Corporate Debtor, no

material has been placed either before the Adjudicating Authority or before

this Tribunal by the Appellant to show that the said amount is reflected in the

books of the account of the Corporate Debtor which amount is claimed to be

belonging to OAF. The Adjudicating Authority has returned the finding that

no direct investment/deposit from OAF reflects in the books of the Corporate

Debtor. In the appeal also, neither any foundation has been laid nor any

material has been produced to indicate that the said finding is incorrect.

15. Even though the Appellant has not filed its claim, the Resolution

Professional has already pleaded that the Resolution Plan notices the amount

to be refunded as per the SEBI's order dated 28.05.2021. The Resolution Plan

also contains a clause for discharge of the liability of the SEBI. There shall be

no question of extinguishment of the claim of the SEBI pursuant to the order

dated 28.05.2021 on completion of the CIRP of the Corporate Debtor. The

Resolution Plan envisaged for clearing such liability as per scheme envisaged

in the Resolution Plan. Counsel for the Resolution Professional is right in his

submission that during currency of moratorium which was imposed by order

Company Appeal (AT) (Insolvency) No. 1252 of 2023 20

dated 19.12.2021, no recovery can be affected from the Resolution

Professional of the Corporate Debtor as per SEBI's order dated 28.05.2021.

16. We, thus, are of the view that no error has been committed by the

Adjudicating Authority in rejecting IA No.3787 of 2022 filed by the Appellant.

The Adjudicating Authority has given ample reasons for dismissing the

Application IA No.3787 of 2022, in which we do not find any infirmity

warranting any interference in the said order. In result, subject to

observations as made above, we dismiss the Appeal.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

New Delhi Anjali

Company Appeal (AT) (Insolvency) No. 1252 of 2023