Uv Asset Reconstruction Company Ltd vs Aria Hotels & Consoltancy Service Pvt ...

Having Registered Office at: 704, Deepali Building, 92, Nehru Place, New Delhi - 110019 And Corporate Office at:1304/1304A, 13th Floor, Chiranjiv Tower, 43, Nehru Place, New Delhi - ...Appellant 110019

Versus

1. Aria Hotels & Consultancy Services Pvt. Ltd. Having its registered office at: 6th Floor, Aria Towers, JW Marriot New Delhi, Aerocity Asset Area 4, Hospitlaity District, Near IGI Airport, New Delhi - 110037 ...Respondent No. 1

2. Sandeep Gupta S/o Late Sushil Kumar Gupta 4/11, Shanti Niketan, New Delhi - 110021 ...Respondent No. 2

3. Sapan Mohan Garg, Registration No. IBBI/IPA - 002/IP- N00315/2017-2018/10903 Resolution Professional of Asian Hotels (West) Ltd, Having his office at D-54, First Floor, Defence Colony, New Delhi - 110024 ...Respondent No. 3 -2-

For Appellant: Mr. Ramji Srinivasan, Sr. Advocate, Mr. Karan Bharihoke Mr. Siddharth Garg, Mr Himanshu Chaubey, Ms. Ms. Namrata Sarangi, Ms. Shruti Pandey, Advocates For Respondent: Mr. K.Dutta, Sr. Advocate, Mr. Abhijeet Sinha, Mr. Rahul Gupta, Mr. Vikas, Mr. Ritesh Sharma, Ms. Damini, Mr. Harman Sandhu, Mr. Siddharth Aggarwal Advocates for R1&2. Ms. Pooja Mahajan, Mr. Savar Mahajan, Ms. Vinita Sasidharan, Ms. Shreya Mahalwar, Advocate for R3.

JUDGMENT

ASHOK BHUSHAN, J:

1. This Appeal has been filed against an Order dated 02.02.2023 passed

in I.A./656/ND/2023 in IB/571/PB/2021 by National Company Law

Tribunal, New Delhi, Court IV (hereinafter referred to as "The Adjudicating

Authority"). The Order passed is as follows:

"Heard the preliminary submissions made by the Ld. Counsel for the petitioner and the Ld. Counsel for the Resolution Professional as well as the Ld. Counsel for the CoC. This matter requires detailed considerations of various provisions of IBC. In order to determine the entitlement for the relief sought in this matter. Further, as the respondents are present and received advance copy of the petition and also made submissions during the course of the hearing, there is no need to issue any notice and requirements of notice is dispensed with. No specific ad-interim-relief is granted in this matter as prayed for in the application. However, in order to ensure that the applicants' right' are not adversely affected, the resolution passed in the 5th CoC meeting of the

Company Appeal (AT) (Insolvency) No. 176 of 2023 -3-

Corporate Debtor vide Item No. B2 may not be further acted upon by the respondents. One week time is granted for filing the reply and thereafter three days' time is granted for filing the rejoinder if any.

Let the matter be fixed for hearing on 15.02.2023."

2. IA/656/2023 was filed by Respondent No. 1-Aria Hotels and

Consultancy Services Pvt. Ltd. in Corporate Insolvency Resolution Process

which has been initiated by the Adjudicating Authority for Corporate Debtor-

Asian Hotels (West) Limited. The Respondent-Aria Hotels & Consultancy

Services Pvt. Ltd. is a subsidiary of Corporate Debtor. The CIRP against the

Corporate Debtor commenced by Order dated 16.09.2022. The Committee of

Creditors held its various Meetings. On 14th January, 2023, Notice for 05th

CoC Meeting was circulated. 05th CoC Meeting held on 16th January, 2023 in

which Resolution was passed in Item No. B2 to change the management of

the Aria Hotels and Consultancy Services Pvt. Ltd. a subsidiary company of

the Corporate Debtor. The Resolution Professional was authorized by the

Committee of Creditors to take all steps necessary that may be required for

changing the management of "ARIA", including nominating directors to the

Board of ARIA. On the resolution, e-voting took place.

3. Application I.A./656/2023 was filed before the Adjudicating Authority

praying for following reliefs:

"A. Quash and/or set aside the Illegal resolutions (as defined above) passed in the 5th COC meeting of the Corporate Debtor i.e., Item No. B2;

Company Appeal (AT) (Insolvency) No. 176 of 2023 -4-

B. Quash the illegal decision of the COC as passed in the 5th COC meeting as Item No. A5;

C. Pass an ex-parte ad interim order staying the decision and/or Resolutions passed in the 5th COC meeting for change of management of the Applicant No. 1 i.e., Item No. A5 and Item No. B2;

D. Pass an ex-parte ad interim order in terms of prayer A and B;

E. Pass any other order/orders as may as deemed necessary in the facts and circumstances of the case."

4. The Application was taken on 31st January, 2023 and were heard on

01st February, 2023 and the Adjudicating Authority fixed 2nd February, 2023

for continuation of arguments. On 2nd February, 2023, Impugned Order has

been passed. Aggrieved against the Order, the Appellant who is member of

the Committee of Creditors of the Corporate Debtor has come up in this

Appeal.

5. Mr. Ramji Srinivasan, Learned Sr. Counsel for the Appellant

challenging the Impugned Order submits that Adjudicating Authority having

recorded in the Order that no specific ad-interim-relief is being granted,

directed not to act upon resolution Item No. B2, for which no reasons have

been given in the Order. It is submitted that when the Adjudicating

Authority has fixed the matter for hearing on 15.02.2023 there was no

occasion to pass any ad-interim-order. Learned Sr. Counsel submits that

although there are various submissions on the merit to oppose the I.A.

656/2023 but application being pending this tribunal may not enter into

those submissions at this stage.

Company Appeal (AT) (Insolvency) No. 176 of 2023 -5-

6. Learned Sr. Counsel for the Respondent-Mr. Krishnendu Datta and

Learned Counsel-Mr. Abhijeet Sinha refuting the submissions of Learned Sr.

Counsel for the Appellant submits that the Order dated 02.02.2023 was

passed after hearing elaborate arguments by the Adjudicating Authority on

01.02.2023 and 02.02.2023. On 15.02.2023 which was a date fixed, the

Appellant took one day time for filing Reply hence hearing could not take

place and now the Adjudicating Authority has fixed the Application for

hearing on 01st and 2nd March, 2023. The direction of the Adjudicating

Authority not to take steps to implement the resolution is only to protect the

status quo, the order has been passed by the Adjudicating Authority in the

midst of the hearing which needs no interference in this Appeal.

7. We have considered the submissions of Learned Sr. Counsel for the

parties and have perused the record.

8. We have noticed the prayers which have been made in the

IA/656/2023. The impugned order does not grant any interim relief in terms

of any of the reliefs prayed in the I.A./656/2023. The limited direction

issued by the Adjudicating Authority is "however, in order to ensure that the

applicant's rights are not adversely affected, the resolution passed in the 5th

CoC meeting of the Corporate Debtor vide Item No. B2 may not be further

acted upon by the Respondents". Parties in the application were heard on

01st and 2nd February, 2023 which is apparent from the proceedings brought

before this Tribunal and fixed 15.02.2023 for hearing which hearing could

not take place and date was fixed by the Adjudicating Authority for hearing

on 01st and 2nd March, 2023 on the application. All contentions of the parties

are yet to be considered and decided by the Adjudicating Authority on I.A.

Company Appeal (AT) (Insolvency) No. 176 of 2023 -6-

656/2023 and since the hearing on 15.02.2023 could not take place and

time was sought by the appellant for filing the reply which is clear from the

Order dated 15.02.2023 which is to the following effect:

"Heard the submissions made by the Ld. Counsels for both the parties. The Ld. Counsel for the CoC has submitted that he will take steps to file the reply during the course of the day. The Ld. Counsel for the RP is also present and submitted that he has filed his reply yesterday and the same is reflected on the e- portal of the Tribunal. Ld. Counsel for the applicant has prayed for grant of three days' time to file the rejoinder. Time prayed for is granted. The interim order granted in this matter shall continue till the next date of hearing.

...."

9. No exception can be taken to the order passed by the Adjudicating

Authority on 15.02.2023 extending the interim order and fixing the next date

on 01st and 2nd March, 2023. We thus are of the view that at the stage when

the Adjudicating Authority is seized of the application I.A. 656/2023 and

had already fixed date on 1st and 2nd March, 2023 for hearing of the

application, this Appeal need not to be entertained.

10. Learned Counsel for both the parties has relied on Judgment of

Hon'ble Supreme Court in [1990 (Supp.) SCC 727] "Wander Ltd. and

Another Vs. Antox India P. Ltd." where Hon'ble Supreme Court laid down

following in paragraph 14:

"14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In

Company Appeal (AT) (Insolvency) No. 176 of 2023 -7-

such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant of refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonable and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd. v. Pothan Joseph"

11. Hon'ble Supreme Court in the above judgement had laid down that in

exercise by the Court if it is shown to be exercised arbitrarily, or capriciously

or perversely or where the court had ignored the settled principles of law

regulating grant or refusal of interlocutory injunctions, Appellate Court can

interfere. We do not find that the exercise of jurisdiction of the Adjudicating

Authority in the present case is arbitrary, capricious, or perverse.

Company Appeal (AT) (Insolvency) No. 176 of 2023 -8-

12. It goes without saying that adjudicating authority while proceeding to

decide IA/656/2023 on merits, the ad-interim-order passed by the

Adjudicating Authority shall not in any manner influence the decision on the

application on merits.

The Appeal is disposed of, with these observations.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical)

03rd March, 2023.

NEW DELHI

Basant B.

Company Appeal (AT) (Insolvency) No. 176 of 2023