Winsome Investor Welfare Association vs M/S Winsome Diamomds And Jewellery ...

[Arising out of Order dated 01st September, 2020 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad) in I.A. No. 381 of 2018 in C.P. (IB) No. 208/9/NCLT/AHM/2017]

IN THE MATTER OF: Winsome Investor Welfare Association Having registered office at: 243/2905/1, Satyam Apartment Sola Road, Navrangpura Ahmedabad - 380063 ...Appellant

Versus

Mr. Amit Gupta, "Liquidator" of M/s Winsome Diamonds and Jewellery Limited Having office at: A-404, Express Zone, Off. Western Express Highway Goregaon (East), Mumbai - 400063 ...Respondent

Present: For Appellant : Mr. Rudreshwar Singh, Mr. Akshay Sapre and Mr. Yuvraj Thakre, Advocates.

For Respondent : Mr. Sumant Batra and Ms. Ruchi Goyal, Advocates

(22nd March, 2023)

KANTHI NARAHARI, MEMBER (TECHNICAL)

Preamble:

The Present Appeal is filed under Section 61 of the Insolvency &

Bankruptcy Code, 2016 (for short "I&B Code") against the Order dated 01st

September, 2020 passed by the Adjudicating Authority (National Company

Law Tribunal, Ahmedabad Bench, Ahmedabad) in I.A. No. 381 of 2018 in

Company Appeal (AT) (Insolvency) No. 181 - 182 of 2021 1 of 6 C.P. (IB) No. 208/9/NCLT/AHM/2017, whereby the Adjudicating Authority

appointed Mr. Amit Gupta, the Respondent herein as Liquidator of the

Corporate Debtor.

Brief Facts:

Appellant's Submissions:

2. Sh. Rudreshwar Singh, Learned Counsel appearing for the Appellant

submitted that the Appellant is a trust registered under the Indian Trust Act,

1882 formed with the object of protecting the interest of the shareholders of

Winsome Diamonds and Jewellery Limited. The Appellant being the

shareholder of the corporate Debtor is interested in the proceedings wherein

decisions concerning the Corporate Debtor are being taken.

3. It is submitted that the Corporate Debtor is into CIRP vide admission

order dated 13.02.2018 and Mr. Anshuman Chaturvedi was appointed as

Resolution Professional on 30.05.2018. While so, the Respondent was

introduced by the Standard Chartered Bank in the 4th Meeting of CoC held

on 07.08.2018, even though the RP had shown his willingness to continue

as Liquidator. However, the CoC decided to appoint the Respondent as

Liquidator. The RP filed an application being IA No.381 of 2018 under

Section 33 of the Code for liquidation of Corporate Debtor. However, the

Appellant Association preferred an I.A. No. 465 of 2018 raising objections

regarding non-execution of decrees and consequentially against passing of

an order of liquidation against the Corporate Debtor.

Company Appeal (AT) (Insolvency) No. 181 - 182 of 2021 2 of 6

4. While matter stood thus, an order was passed in I.A. No. 318 of 2018

liquidating the Corporate Debtor, however, I.A. No. 465 of 2018 is still

pending for consideration.

5. The Learned Counsel submitted that the appointment of Respondent

as Liquidator is in violation of Section 34(1) and Section 34(4) of the IBC,

2016.

6. It is submitted that the Appellant preferred the present Appeal

challenging the order whereby the Adjudicating Authority appointed the

Respondent as Liquidator. Having submitted the facts and the relevant

provisions of law, Learned Counsel prayed this Bench to allow the Appeal by

setting aside the appointment of Respondent as Liquidator.

Respondent's Submissions:

7. The Respondent filed Reply Affidavit denying the averments made by

the Appellant and submitted that the Adjudicating Authority passed the

Order of Admission dated 13.02.2018 initiating CIRP against the Corporate

Debtor and one Mr. Sunit Jagdishchandra Shah was appointed as IRP and

later Mr. Anshuman Chaturvedi was appointed as RP by the CoC and

confirmed by the Adjudicating Authority dated 30.05.2018.

8. It is submitted that in the 4th Meeting of CoC held on 08.08.2018, the

CoC decided to liquidate the Corporate Debtor and resolved to appoint this

Respondent as Liquidator and the RP filed I.A. No. 318 of 2018 before the

Adjudicating Authority seeking liquidation of the Corporate Debtor and the

Company Appeal (AT) (Insolvency) No. 181 - 182 of 2021 3 of 6 Adjudicating Authority vide order dated 01.09.2020 passed order of

liquidation.

9. It is submitted that the Appellant has no locus to challenge the

appointment of the Respondent as Liquidator for the reason that the

Association is not challenging the order of liquidation but only appointment

of this Respondent as Liquidator. It is submitted that the Adjudicating

Authority was well within its power and jurisdiction to appoint the

Respondent as Liquidator and relied upon the decision of this Tribunal in

Sandeep Kumar Gupta Vs. Stewarts & Lloyds of India Ltd. & Ors. in CA (AT)

(Ins) No. 263 of 2017 dated 28.02.2018.

Analysis / Appraisal

10. Heard the Learned Counsel appeared for the respective parties. The

short point for consideration is whether the Appellant has made out any

prima-facie case to upheld the order passed by the Adjudicating Authority.

11. Admittedly, the Appellant is an Association ventilating its grievance

against appointment of the Respondent as Liquidator. The fact remains that

the RP has not challenged the appointment of this Respondent as Liquidator

and this Tribunal does not find any allegations against this Respondent. No

one aggrieved against the appointment of this Respondent as Liquidator

except the Appellant and no genuine cause or reason shown neither any

illegality or irrational has been pointed out by the Appellant except mere

appointment as Liquidator by the Adjudicating Authority. Moreover, the

Appellant failed to explain that the Adjudicating Authority lacks jurisdiction

in appointing the Respondent as Liquidator. Furthermore, the CoC it its 4th

Company Appeal (AT) (Insolvency) No. 181 - 182 of 2021 4 of 6 meeting held on 07.08.2018 passed a Resolution and decided to appoint the

Respondent as Liquidator. It is to be presumed that the CoC in its

commercial wisdom has taken a decision and reposed its confidence in the

Respondent to act as Liquidator.

12. Further, this Tribunal in Sandeep Kumar Gupta Vs. Stewarts & Lloyds

of India Ltd. & Ors. in CA (AT) (Ins) No. 263 of 2017 held as under:

"In view of the aforesaid undisputed facts, while we hold that the observations made in the impugned order should not be construed to be misconduct on the part of the Appellant, but as we find that the Adjudicating Authority was not satisfied with the performance of the 'Resolution Professional', we hold that the Adjudicating Authority was well within its jurisdiction to engage another person as 'Resolution Professional' or 'Liquidator'. Further, the list of 'Resolution Professional' being made available by the 'Board' to the Adjudicating Authorities, any person is appointed out of the said list submitted by the 'Board', it should be treated to be an appointment of 'Resolution Professional'/'Liquidator' on the recommendation of the 'Board'."

13. Without going into the other aspects of the case this Tribunal is of the

view that the order under challenge was passed by the Adjudicating

Authority on 01.09.2020 and till passing of this order, if the period is taken

into consideration from the date on which the impugned order was passed

i.e. 01.09.2020, much time has passed i.e. more than 2½ years and it would

be a futile exercise if the order is interfered with, keeping in view of the time

bound proceedings of the IBC.

Company Appeal (AT) (Insolvency) No. 181 - 182 of 2021 5 of 6 Conclusion:

14. This Tribunal comes to a resultant conclusion that the Appellant has

not made out a prima-facie case to be interfered with the order passed by the

Adjudicating Authority. Accordingly, the Appeal sans merit and liable to be

dismissed.

15. The Appeal is dismissed. No orders as to cost. Applications, if any,

pending stands closed.

[Justice Anant Bijay Singh] Member (Judicial)

[Kanthi Narahari] Member (Technical) pks

Company Appeal (AT) (Insolvency) No. 181 - 182 of 2021 6 of 6