Vikram Puri & Anr vs Universal Buildwell Pvt. Ltd. & Anr

Vikram Puri & Anr. (Suspended Directors) ...Appellant

Versus

Universal Buildwell Pvt. Ltd. through Resolution ...Respondent Professional

Present: For Appellant: Mr. Achal Gupta, Advocate For Respondent:

ORDER

(Virtual Mode)

26.07.2022: Heard Learned Counsel for the Appellant.

2. This Appeal has been filed against the Order dated 04th March, 2022.

By which Order, I.A. No. 5312 of 2021 filed by the Appellant has been rejected.

The Appellants-Suspended Directors of the Corporate Debtor had filed the I.A.

praying for following reliefs:

"a) Direct the Resolution Professional to forward the Proposal dated 12th October, 2021 of the Applicant to the Committee of Creditor; and

b) Direct the Resolution Professional to call for a meeting of the Committee of Creditors to discuss and vote on approval of the Proposal dated 12th October, 2021 of the Applicant."

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3. In the facts of the present case, the Committee of Creditors has already

approved the Resolution Plan on 11.11.2019 and an Application to approve

the Resolution Plan was filed by the Resolution Professional before the

Adjudicating Authority on which the Adjudicating Authority passed an Order

on 11th June, 2021 remitting the Resolution Plan back to the Committee of

Creditors for certain limited issues.

4. After the said Order passed by the Adjudicating Authority, the

Appellants who are the Suspended Directors has filed this Application bearing

I.A. No. 5312 of 2021 seeking prayers as noted above.

5. Learned Counsel for the Appellant submits that Appellant has

submitted proposal dated 12th October, 2021 which was a better financial

proposal and ought to have been directed by the Adjudicating Authority to be

placed before the Committee of Creditors for consideration. Learned Counsel

for the Appellant submits that plan of the Appellant is beneficial to the Home

Buyers and is better plan with regard to all seven projects. He further submits

that after remanding back by the Adjudicating Authority, the matter is again

before the Adjudicating Authority which is pending consideration for

approval.

6. On a query to the Learned Counsel for the Appellant that how the

Suspended Directors are eligible to submit Resolution Plan, Learned Counsel

for the Appellant has referred to Section 32A of the Insolvency and

Bankruptcy Code, 2016 (IBC in short). Section 32A of the Code provides for

liability for prior offences, etc. Section 32(1) of the Code is as follows:

Company Appeal (AT) (Insolvency) No. 794/2022 -3-

"Section 32. Appeal.- (1) Any Appeal from an

order approving the Resolution Plan shall be in the

manner and on the grounds laid down in sub-section 3 of

Section 61.

32-A. Liability for prior offences, etc.- (1)

Notwithstanding anything to the contrary contained in

this Code or any other law for the time being in force, the

liability of a corporate debtor for an offence committed

prior to the commencement of the corporate insolvency

resolution process shall cease, and the corporate debtor

shall not be prosecuted for such an offence from the date

the resolution plan has been approved by the

Adjudicating Authority under section 31, if the resolution

plan results in the change in the management or control

of the corporate debtor to a person who was not--

(a) a promoter or in the management or control of

the corporate debtor or a related party of such a person;

or

(b) a person with regard to whom the relevant

investigating authority has, on the basis of material in its

possession, reason to believe that he had abetted or

conspired for the commission of the offence, and has

submitted or filed a report or a complaint to the relevant

statutory authority or Court:

Company Appeal (AT) (Insolvency) No. 794/2022 -4-

Provided that if a prosecution had been instituted

during the corporate insolvency resolution process

against such corporate debtor, it shall stand discharged

from the date of approval of the resolution plan subject to

requirements of this sub-section having been fulfilled:

Provided further that every person who was a

"designated partner" as defined in clause (j) of section 2

of the Limited Liability Partnership Act, 2008, or an

"officer who is in default", as defined in clause (60) of

section 2 of the Companies Act, 2013, or was in any

manner in charge of, or responsible to the corporate

debtor for the conduct of its business or associated with

the corporate debtor in any manner and who was directly

or indirectly involved in the commission of such offence

as per the report submitted or complaint filed by the

investigating authority, shall continue to be liable to be

prosecuted and punished for such an offence committed

by the corporate debtor notwithstanding that the

corporate debtor's liability has ceased under this sub-

section."

7. We are of the view that Section 32A does not give any right to the

Suspended Directors to submit a plan. Section 29A is a provision which clearly

provides that Appellant are not eligible to submit a Resolution Plan i.e.

Suspended Directors. More so, in the present case, Plan has already been

Company Appeal (AT) (Insolvency) No. 794/2022 -5-

approved which has been remitted back by the Adjudicating Authority to the

Committee of Creditors for limited issues hence this is not a stage even to

consider and direct any proposal of the Appellant to be placed before the CoC.

8. We do not think that any of the submission of the Appellant would

make any dent towards his ineligibility to seek consideration of his proposal

dated 12th October, 2021. We do not find any error in the Order of the

Adjudicating Authority. The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Justice M. Satayanarayana Murthy] Member (Judicial)

[Mr. Barun Mitra] Member (Technical)

Basant/nn

Company Appeal (AT) (Insolvency) No. 794/2022