Southern Power Distribution Company Of ... vs Rakesh Kumar Singala Liquidator Of M/S ...

IN THE MATTER OF: Southern Power Distribution Company of Andhra Pradesh Ltd. Through Superintending Engineer (Operations) ...Appellant

Versus

Rakesh Kumar Singla Liquidator of Apple Industries Ltd. & Ors. ...Respondents

Present: For Appellant : Mr. Rakesh K. Sharma, Mr. Nishant Sharma, Advocates. For Respondents : Mr. Akshay Sharma, Advocate for R-3.

ORDER

(Hybrid Mode)

07.02.2025: Heard learned counsel for the Appellant as well as learned

counsel appearing for the Respondent. This Appeal has been filed against the

order passed by the NCLT, New Delhi Bench, Court-2 in I.A. No.

5137/ND/2023 and I.A. No. 3446/ND/2022. There being difference of

opinion in the two members of the NCLT, the matter was referred to third

member, who has delivered his opinion on 14.06.2024. The Appellant -

Southern Power Distribution Company of Andhra Pradesh Ltd. has filed this

appeal challenging the order. In the appeal, the Appellant has prayed for

following reliefs:

"a) Because of the preceding facts and circumstances, the Appellant humbly prays before this Hon'ble Appellate Tribunal to pass the following appropriate and necessary Order and/or direction:

Cont'd.../ 2

I. Admit and allow the present appeal by setting aside against impugned order dated 14.06.2024 passed in I.A. NO. 3446/ND/2022 IN Company Petition No. (IB)- 204(ND)/2019 by the Ld. National Company Law Tribunal, New Delhi Bench;

b) pass order or orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."

2. In the impugned order conclusions are recorded in Para 26, which is to

the following effect:

"Conclusion

26. In light of the aforesaid observations, keeping in view the facts and circumstances of the case and various judicial pronouncements, I am of the opinion that when the Corporate Debtor has been sold as a going concern under Regulation 32(e) of IBBI (Liquidation Process) Regulations, 2016, and the proceeds of the sale of Corporate Debtor as a going concern has been distributed as per the order of priority provided in Section 53 of the IBC, 2016, the remaining unpaid outstanding liabilities of the Corporate Debtor shall be extinguished without putting the individual/authority concerned to notice. I further make it clear that extinguishment of liability shall only be of the Corporate Debtor and it will not be available to any person who was involved in the affairs of the Corporate Debtor, if he is liable by virtue of any law.

Company Appeal (AT) (Insolvency) No.2138 of 2024 3

Thus, I agree with the view taken by Hon'ble Technical Member."

3. The grievance of the Appellant is that the blanket extinguishment of the

liabilities without hearing the Appellant may cause prejudice in extinguishing

the liabilities pertaining to the CIRP cost and liquidation cost.

4. The present appeal arises out of the liquidation proceeding in which the

Appellant has also filed its claim which is an admitted fact. Under Section

53, the distribution has been undertaken to the all stakeholders including the

Appellant. It goes without saying that the liabilities which are subject matter

of the liquidation proceeding are liabilities as existing on the liquidation

commencement date.

5. When all claims which relate to liquidation commencement date has to

be dealt with as per Section 53 of the I&B Code and claims of all stakeholders

has been satisfied, we are of the view there is no error in the observation of

the Adjudicating Authority that remaining unpaid outstanding liabilities of

the Corporate Debtor shall be extinguished without putting the

individual/authority concerned to notice.

6. We only clarify that all such liabilities shall extinguish which were

existing on the liquidation commencement date with regard to which claims

are filed and dealt with in the liquidation proceeding.

Company Appeal (AT) (Insolvency) No.2138 of 2024 4

7. Learned counsel for the Respondent submits that in the appeal there

are no foundation as to what claims have been extinguished, which may

prejudice the appellant, by the impugned order.

8. We having already clarified that extinguishment shall be only with

respect to the claims as on liquidation commencement date, we see no reason

to entertain this appeal. With aforesaid clarification, we dispose of this

appeal.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) Archana/nn

Company Appeal (AT) (Insolvency) No.2138 of 2024