Shaji Purushothaman vs Union Bank Of India & Ors

IN THE MATTER OF: Shaji Purushothaman .....Appellant Vs. Union Bank of India & Ors. ......Respondents

Present :

For Appellant: Mrs. Vibha Datta Makhija, Sr. Advocate with Mr. Karuppaiah, Mr. Reghunatha, Ms. Kanika, Mr. Praveen Gaur, Advocates

For Respondents: Mr. R.P. Agrawal, Mr. Prateek, Ms. Bhumika, Advocates

06.09.2019 - This appeal has been preferred by 'Shaji Purushothaman' ,

Director of 'Empee Distilleries Ltd.' ('Corporate Debtor') against the order of

rejection of the Miscellaneous application filed by him before the Adjudicating

Authority ('National Company Law Tribunal'), Division Bench, Chennai dated

29th July, 2019.

Company Appeal (AT) (Insolvency)No. 921 of 2019

2. We find that the application u/s 7 of the Insolvency & Bankruptcy Code,

2016 ('I&B' Code, for short) by 'Union Bank of India' ('Financial Creditor') was

admitted against the 'Corporate Debtor' on 1st November, 2018. The said order

was challenged before this Appellate Tribunal which was dismissed and

thereafter the Appellant moved before the Hon'ble Supreme Court. Before the

Hon'ble Supreme Court, the Appellant took plea that he is ready and willing to

clear the outstanding dues with the 'Union Bank of India' within 15 days. For

the said reason, the Hon'ble Supreme Court by the order dated 14th June, 2019

granted liberty to move an application within two weeks before the Adjudicating

Authority ('National Company Law Tribunal').

3. It is informed that the Appellant in the meantime has settled the matter

with 'Union Bank of India' and some other 'Financial Creditors'. The Appellant

moved a miscellaneous application with prayer for setting aside the order dated

1st November, 2018.

4. The Adjudicating Authority taking into consideration the aforesaid fact in

the impugned order dated 29th July, 2019 observed that order of admission

cannot be set aside, except where an application u/s 12A is filed, by settling the

matter with all the Creditors with approval of 90% of the voting share of the

Company Appeal (AT) (Insolvency)No. 921 of 2019 2 'Committee of Creditors' subject to filing of an application by 'Union Bank of

India' for withdrawal of application u/s 7 of the 'I&B' Code.

5. Learned counsel for the Appellant submits that, M/s. Edelweiss Asset

Reconstruction Company Ltd.' in whose favour guarantee was given by the

'Corporate Debtor' is not entitled to any claim. However, we are not inclined to

decide such issue at this stage having not raised before the Adjudicating

Authority. We find no illegality in the order.

6. At this stage, learned counsel for the Appellant submits that the Appellant

is ready to settle the claim with all the Creditors including 'M/s. Edelweiss Asset

Reconstruction Company Ltd.'

7. However, Mr. R.P. Agarwal appearing on behalf of 'Union Bank of India'

submits that the 'Resolution Plan' has already been approved by the 'Committee

of Creditors' after taking into consideration the claim of the 'M/s. Edelweiss Asset

Reconstruction Company Ltd.'

8. In the circumstances, while we are not inclined to issue any specific

direction, give liberty to the Appellant to move an application u/s 12A for settling

the claims of all the Creditors including the guarantors.

Company Appeal (AT) (Insolvency)No. 921 of 2019 3

9. If an application u/s 12A is filed by the Appellant, the 'Committee of

Creditors' may decide as to whether the proposal given by the Appellant for

settlement in terms of Section 12A is better than the 'Resolution Plan' as

approved by it, and may pass appropriate order. However, as such decision is

required to be taken by the 'Committee of Creditors', we are not expressing any

opinion on the same.

The appeal stands disposed of. No costs.

[Justice S. J. Mukhopadhaya] Chairperson

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

[Kanthi Narahari] Member (Technical)

ss/sk

Company Appeal (AT) (Insolvency)No. 921 of 2019 4