State Bank Of India & Anr vs Scotts Garments Ltd & Ors
- CitationCompany Appeal (AT) (Insolvency) No. 1169 of 2019
Ratio decidendi
The rule this decision rests on
The application under Sections 21(3), 24(6) and (7), 52 and 53 of the Insolvency and Bankruptcy Code, 2016, seeking to set aside a resolution professional's acceptance of a revised resolution plan before any order of liquidation has been passed, is not maintainable; the appropriate remedy in such a case is an application under Section 60(5) of the Code. Where the Adjudicating Authority has rejected an application on a technical ground of non-maintainability, an appellate tribunal may dismiss the appeal on that ground without going to the merits, and the dismissal does not preclude the appellant from raising the same issues in a separate pending appeal challenging the approval of the resolution plan.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
State Bank of India & Anr. ...Appellants
Versus
M/s. Scotts Garments Ltd. & Ors. ...Respondents
Present: For Appellants : Mr. C.A. Sinha and Ms. Sonali Khanna, Advocates
ORDER
11.11.2019 The 'State Bank of India and Another (Financial Creditors)
filed an Interlocutory Application under Section 21(3) read with Section 24(6)
and (7) and Sections 52 and 53 of the 'Insolvency and Bankruptcy Code, 2016
for setting aside the proceedings dated 24th July, 2019 passed by the 'Resolution
Professional' for accepting the 'revised resolution plan' passed for the 'Scotts
Garments Ltd.' and 'Linen Art Pvt. Ltd.', which was circulated on 28th July, 2019.
The Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench
by impugned order dated 16th September, 2019 rejected the same while taken
into consideration that the 'Financial Creditors' have approved the 'revised
resolution plan' with 75.4% voting share.
2. On hearing the Learned counsel for the Appellant and on perusal of the
record, we are of the opinion that the application under Section 21(3) or Section
24(6) and (7) were not maintainable for any direction on the 'Resolution
Professional' or for setting aside the order passed by the 'Resolution Professional'
nor such application under Section 52 or 53 of the 'I&B Code'. As the order of -2-
'Liquidation' has not been passed, at best the application could have been filed
under Section 60(5) of the 'I&B Code', which has not filed. Therefore, on the
technical ground the application was not maintainable and we also reject it.
On merits, we also not found any ground to interfere with the impugned
order as the 'resolution plan' has already been approved and the same has
already been challenged by the Appellant in other Company Appeal i.e. 'Company
Appeal (AT) (Insolvency) No. 1106 of 2019'.
For the reasons aforesaid, though we condone the delay of 7 days in
preferring the Appeal but dismiss this appeal. However, dismissal of the Appeal
will not come in the way of the 'State Bank of India' to raise all the issues in
'Company Appeal (AT) (Insolvency) No. 1106 of 2019.'
[Justice S.J. Mukhopadhaya] Chairperson
[Justice Venugopal M.] Member (Judicial)
[Justice Jarat Kumar Jain] Member (Judicial) /ns/sk
Company Appeal (AT) (Insolvency) No. 1169 of 2019
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