NCLAT (14.12.2018) in SKS Power Generation Chattisgarh Limited Vs. Mr. V Nagarajan, [Company Appeal (AT) (Insolvency) No. 206 of 2018] held that;. Adjudicating Authority is required to pass a speaking order while deciding as to whether the application under Sections 43 and 45 of the ‘I&B Code’ is maintainable or not.
Excerpts of the order;
In the ‘Corporate Insolvency Resolution Process’ initiated against ‘M/s. Cethar Limited’ (‘Corporate Debtor’), the 1st Respondent- (‘Resolution Professional’) filed application being CA 38/IB/2018 in CP/511/(IB)/2017 under Sections 43, 45, 180 and 186 of the Insolvency and Bankruptcy Code, 2016 (‘I&B Code’ for short) with following prayers: -
“(a)(i) That the transactions of investment set out as made by the ‘Corporate Debtor’ pursuant to the agreement dated 15.03.2011 amended by agreement dated 06.04.2016 and read with resolution of CD’s Board of Directors dated 17.06.2016 in shares of the 1st and the 4th Respondent together with the sale thereof to 5th Respondent and payments there from to 6th to 9th Respondents be declared as null and ab-initio void and consequently set aside.
(ii) That 1st – 4th Respondents be directed to make repayment to the CD of the sum of Rs. 228.60 Crores with interest at 12% p.a from date of receipt of the funds from the CD and its subsidiary.
(a) That pending the hearing and final disposal of this application.
(i) The 1st -4th Respondents be restrained from dealing with or disposing off or parting with or alienating their assets, including by way of hypothecation, mortgage or of any kind, in any manner.
(ii) That 1st -4th Respondents be directed to place before this Hon’ble Tribunal all records of movement of funds between themselves from 1.04.2010 onwards till date including funds received by them from CD and its subsidiary to the extent of Rs. 228.60 crores.
(iii) That the 1st-4th Respondents be directed to place adequate security by way of bank guarantee in respect of the amount due to the CD.
(iv) That the affairs of the 1st-4th Respondents be directed to be investigated by the Serious Fraud Investigation Office (SFIO) or any other investigation agency that the Hon’ble Tribunal may deem fit and appropriate in this regard.”
# 2. The ‘Resolution Professional’ thereafter filed Miscellaneous Application being MA No. 25/IB/2018 with following prayer:
(a) An order permitting the Applicant to amend CA/38/IB/2018 and thereby add the following as final relief a(i)(a), after Relief presently set out as a(i) as under:-
“a(i)(a) Direct R10 to repay to the Applicant a sum of Rs. 158.00 crores being the amount received by it from R1 whether as equity or loans or advances or whatever else limited to the maximum extent of funds provided by Applicant to R1.”
(b) An order restraining and injuncting Respondent No. 2 from in any manner realizing or seeking to realize the Bank Guarantee issued on behalf of the Corporate Debtor pending the final disposal of CA/38/IB/2018”
# 4. ……. Thereafter, the Adjudicating Authority, Single Bench, Chennai, by impugned order dated 24th April, 2018, passed following interim order and directions:
“RP along with his Counsel present. Counsel for R1, R2, R10 and R11 present.
Heard both the sides. The Counsel for the RP has pressed hard for grant of interim prayers, citing the reasons that in case the interim prayer is not granted, there will be irreparable loss to the assets of the Corporate Debtor.
Therefore, R10 is directed to repay to the Appellant a sum of Rs. 158 crores, being the amount received by him from R1, whether as an equity or loan or advance or whatever as limited to the maximum extent of funds provided by the Applicant to the R1. R2 is restrained from seeking to release the bank guarantee issued on behalf of the Corporate Debtor, pending the final disposal of CA/38/IB/2018 filed in CP/511/IB/2017.
The Counsel for the Applicant is directed to obtain a copy of this order and serve it on the Respondents with immediate effect. However, the Counsel for the Respondents is also directed to instruct the Respondents/clients to make compliance with this order in letter and spirit.
The Counsel for the Respondent is directed to file reply. Put up on 26.04.2018 at 10.30 A.M.”
# 5. The aforesaid order is under challenge in this appeal.
# 9. The Respondent- ‘Resolution Professional’ has appeared and filed reply affidavit and taken plea that the Appellant was the 10th Respondent who has been directed to repay a sum of Rs. 158 Crores as the amount was paid to it by the ‘Corporate Debtor’. However, it is accepted that the impugned order was passed by way of an interim order without deciding the question of maintainability of application under Sections 43 and 45 of the ‘I&B Code’.
# 10. As we find that the impugned order dated 24th April, 2018 was passed by the Adjudicating Authority without deciding question as to whether the application under Sections 43 and 45 of the ‘I&B Code’ is maintainable or not and as impugned order is not a speaking/reasoned order, we set aside the impugned order and remit the matter to the Adjudicating Authority to decide the application on merit if not yet decided. The Appeal is allowed with aforesaid observations and directions. No cost.
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