Vandana Rana vs Sai Com Codes Flexoprint Pvt Ltd & Anr

In the matter of: Vandana Rana ....Appellant Vs. Sai Com Codes Flexoprint Pvt. Ltd. & Anr. ....Respondents

Present: Appellant: Mr. Ajit Sharma, Mr. Abhishek Rana and Mr. Anant Mishra, Advocates Respondents: Mr. Ankur Singhal, Advocate for R-1. Mr. Lalit Mohan and Mr. Videh Vaish, Advocates for R-2/ RP Mr. Deepak Mittal, R-2/RP in person.

ORDER

(Through Virtual Mode)

18.03.2021: Application filed by Respondent - Operational Creditor

under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for short 'the

I&B Code') came to be admitted by the Adjudicating Authority (National

Company Law Tribunal), Allahabad Bench in terms of order dated 1st March,

2021, which has been assailed in the instant Appeal on the ground that the

impugned order of admission has been passed in ex-parte and it is only on

receipt of an email from the Interim Resolution Professional (IRP) - Shri

Deepak Mittal that the Corporate Debtors learnt about triggering of Corporate

Insolvency Resolution Process (CIRP) against it. It is further submitted by

Learned Counsel for the Appellant that the Corporate Debtor had paid an

amount of Rs.10 lakhs to the Operational Creditor during the pendency of

CIRP. It is further submitted that after the Corporate Debtor learnt about the

triggering of CIRP at the instance of Respondent - Operational Creditor, the

Company Appeal (AT) (Insolvency) No. 211 of 2021 1 Appellant executed a Settlement Agreement dated 5th March, 2021 with the

Operational Creditor in terms whereof the Operational Creditor agreed to

withdraw its Application under Section 9 of the I&B Code and file an

application for withdrawal in lieu of the settled consideration. It is further

submitted by Mr. Ajit Sharma, learned Counsel for the Appellant that IRP was

informed on 7th March, 2021 about this development and to initiate the

process for withdrawal of proceedings. However, no action was taken.

2. Mr. Ankur Singhal, Advocate appearing on behalf of Respondent No.1 -

Operational Creditor admits the factum of claim of Operational Creditor

having been settled and satisfied by the Corporate Debtor in terms of the

Settlement Agreement, copy whereof forms part of appeal paper book at page

52. He also draws our attention to the Stamp Paper having been issued on

5th March, 2021 as emerges from the Stamp Paper forming part of appeal

paper book at page 51 (A-7).

3. Mr. Lalit Mohan, learned Counsel appearing on behalf of Respondent

No.2 (IRP) submits that the Committee of Creditors has been constituted on

16th March, 2021 and only one claim has been received. He does not oppose

dropping of CIRP proceedings but claims the fee of IRP and the costs incurred

for taking forward the resolution process. Annexure A10 annexed with the

appeal paper book at page 73-74 is the claim of IRP on account of his fee and

resolution process cost, which has been quantified at Rs.2,66,883/-. Mr.

Mohan also claims Rs.20,000/- as his Counsel fee, which be added to the

claim on account of resolution expenses, i.e. totalling to Rs.2,86,883/-.

Company Appeal (AT) (Insolvency) No. 211 of 2021 2

4. On consideration of the submissions made by the learned Counsel for

the parties, we find that the impugned order of admission of application of

Operational Creditor under Section 9 of the I&B Code has been passed on 1st

March, 2021 in ex parte as the Corporate Debtor did not contest the

Application before the Adjudicating Authority. It is established that

immediately after passing of the impugned order, the claim of Operational

Creditor was settled and in terms of the Settlement Agreement, which

envisaged payment of Rs.13,47,989/- towards full and final settlement of the

claim of Operational Creditor, withdrawal application was to be filed before

the Adjudicating Authority as a sequel to settlement. It is flabbergasting to

find that the Committee of Creditors came to be constituted by the IRP on 16th

March, 2021 so hastily though only a single claim was said to have been

received by the IRP.

5. Section 21(1) of the I&B Code provides that the Interim Resolution

Professional shall constitute a Committee of Creditors after collation of all

claims received against the Corporate Debtor and determination of the

financial position of the Corporate Debtor. He is to perform duties embodied

under Section 18 of the I&B Code, which includes collecting of information

relating to the assets, finances and operations of the Corporate Debtor, which

has to precede collating of claims and constitution of Committee of Creditors.

Learned Counsel for the IRP submits that since there was a single claim that's

why the Committee of Creditors came to be constituted so hastily.

6. Without commenting upon the fairness of the procedure adopted in

constituting the Committee of Creditors so hastily, in view of the fact that the

Company Appeal (AT) (Insolvency) No. 211 of 2021 3 Operational Creditor, being the sole claimant is satisfied with the settlement

of his claim in terms of the Settlement Agreement executed barely within four

days of the passing of the impugned order in ex parte demonstrating that it

had the capacity and will to settle the Operational Creditor's claim, we find

this to be a fit case for accepting the settlement arrived at between the parties.

Learned Counsel for the Appellant admits that the amount due and payable

to Operational Creditor towards full and final satisfaction of its claim stands

paid.

7. In view of these developments, we set-aside the impugned order. Total

cost including the fee and CIRP cost is quantified at Rs.2,00,000/- Mr. Ajit

Sharma, learned Counsel for the Appellant states that Rs.2,00,000/- has

already been paid by the Corporate Debtor to Operational Creditor. Mr. Ankur

Singhal, Advocate representing the Operational Creditor undertakes to

provide Demand Draft for Rs.2,00,000/- to Mr. Lalit Mohan, learned Counsel

for the IRP within five days. The Corporate Debtor is released from the rigour

of CIRP. The Appeal is disposed off in aforesaid terms.

8. Copy of this order be communicated to the Adjudicating Authority, who

will close the case.

[Justice Bansi Lal Bhat] Acting Chairperson

[Dr. Ashok Kumar Mishra] Member (Technical)

Ash/GC

Company Appeal (AT) (Insolvency) No. 211 of 2021 4