NCLAT (2024.05.22) in Protima Arora Vs. Maya Gupta and Ors. [Company Appeal (AT) (Insolvency) No. 72 of 2024 with Company Appeal (AT) (Insolvency) No. 129 and 204] held that;
The liabilities of the company cannot be simply washed out by action of company of non-compliance of the provisions of Companies Act, non-filing of the relevant financial documents and other filings. If the submission is accepted of the Appellant that proceeding could not have been proceeded, the easiest thing for a company would be to get struck off to wash of its all liabilities, which submission cannot be accepted.
Excerpts of the order;
These three Appeals have been filed against same order dated 12.10.2023 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, Court-VI by which order I.A. No.678/ND/2023 filed by the Resolution Professional for approval of the Resolution Plan submitted by ACAIPL Investment and Financial Services Private Limited has been approved.
# 2. Company Appeal (AT) (Ins.) No.72 of 2024 has been filed by Protima Arora claiming to be Ex-Director of the Corporate Debtor. Company Appeal (AT) (Ins.) No. 129 of 2024 is filed by Pooja Film Company, who claim to have filed its claim as Financial Creditor in the CIRP of the Corporate Debtor. Company Appeal (AT) (Ins.) No. 204 of 2024 is filed by Pooja Entertainment and Films Limited, who also claim to filed its claim as Financial Creditor. Aggrieved by the order approving the Resolution Plan, there Appeals have been filed.
# 3. We need to first notice the brief facts of the case giving rise to these appeals:
Company Appeal (AT) (Ins.) No.72 of 2024
(i) An application was filed for initiation of CIRP against the Corporate Debtor on 19.07.2019. The application under Section 7 was filed by the Financial Creditor – Easy Trip Planners Limited claiming default of Rs.14,34,12,840/-.
(ii) Notice was issued by Tribunal and the Corporate Debtor filed its reply opposing Section 7 application. One of the grounds taken in the reply was that Section 7 application has been filed against a non-existent company. It is submitted that the company has already been struck off by the Registrar of Companies vide its notice dated 29.10.2019.
(iii) The Adjudicating Authority after hearing objection of the Corporate Debtor, by order dated 11.02.2022 admitted Section 7 application and appointed Ms. Maya Gupta as IRP. Ms. Maya Gupta was confirmed as Resolution Professional by order dated 29.03.2022.
(iv) Form G was published by the Resolution Professional in response to which ACAIPL Investment and Financial Services Private Limited submitted Expression of Interest. The Financial Creditor having found the Resolution Plan commercially viable approved the same by 100% voting share on 04.11.2022.
(v) An application being I.A. No.678/ND/2023 was filed by the Resolution Professional for approval of the Resolution Plan which has been approved by order dated 12.10.2023. Appellant-Protima Arora claiming to be Ex-Director of the Corporate Debtor has filed this appeal challenging the approval of Resolution Plan.
Company Appeal (AT) (Ins.) No.129 of 2024
(i) Appellant claim to have entered with the Corporate Debtor various Memorandum of Agreements (MOAs). Appellant claim to have filed claim in Form C on 10.04.2023 i.e. subsequent to approval of Resolution Plan by the CoC.
(ii) The Resolution Professional did not accept the claim of the Appellant.
(iii) Appellant filed an I.A. No.4047 of 2023 before the Adjudicating Authority seeking direction to accept the claim of the Appellant which claim was rejected by order dated 16.08.2023.
(iv) The Adjudicating Authority by order dated 12.10.2023 has approved the Resolution Plan of the Corporate Debtor, aggrieved by which order this Appeal has been filed.
Company Appeal (AT) (Ins.) No.204 of 2024
(i) Section 7 application against the Corporate Debtor was admitted on 11.02.2022. Appellant claim to file its claim in prescribed Form C on 10.04.2023.
(ii) Appellant aggrieved by order dated 12.10.2023 approving the Resolution Plan come up in this Appeal.
# 4. We have heard Shri Amar Dave, learned counsel appearing for the Appellant in Company Appeal (AT) (Ins.) No.72 of 2024. Ms. Shwetal Shepal, learned counsel has appeared for the Appellant in Company Appeal (AT) (Ins.) No.129 of 2024 and 204 of 2024. Shri Kunal Godhwani, learned counsel has appeared for the Resolution Professional.
# 5. Shri Amar Dave, learned senior counsel for the Appellant submits that the Corporate Debtor having been struck off by the Registrar of Companies, Delhi on 29.10.2019, the Corporate Debtor was no more in existence, hence, the whole exercise of approval of Resolution Plan of Corporate Debtor culminating into order dated 12.10.2023 is without jurisdiction and deserves to be set aside on this ground alone. It is submitted that the Appellant was Director of the Corporate Debtor from 18.07.2015 till it was struck off on 29.10.2019. It is submitted that no proceeding has been undertaken for revival of the Corporate Debtor, hence, Resolution Plan ought not to have been approved. Learned counsel further submitted that after Film Investment Agreement dated 23.02.2018 entered between the Corporate Debtor and the Financial Creditor, there has been Settlement Agreement dated 18.06.2018 between the Financial Creditor, Corporate Debtor and Respondent No.3 herein i.e. Super Cassettes Industries Private Limited, under which the dues of the Corporate Debtor were to be paid by the Respondent No.3 – Super Cassettes Industries Private Limited. Hence, there was no debt due on the Corporate Debtor. Appellant has also referred to Tripartite Agreement dated 21.06.2018, on stamp paper signed by Corporate Debtor, Financial Creditor and Respondent No.3.
# 6. Shri Kunal Godhwani, learned counsel for the Resolution Professional refuting the submissions of learned counsel for the Appellant submits that the Corporate Debtor in Section 7 application has raised objection regarding Corporate Debtor having been struck off from the list of Registrar of Companies, which objection was overruled by the Adjudicating Authority by passing order of admission dated 11.02.2022, which order was never challenged by the Corporate Debtor or anyone else. Hence, it is not open for the Appellant to raise objection regarding company being struck off. It is submitted that Respondent No.1 in its capacity as Chairperson of the Monitoring Committee has issued a letter to the Registrar of Companies requesting for restoration of name of the Corporate Debtor. The Respondent No.1 has submitted Form No.INC-20 to the Registrar of Companies. Respondent No.1 has also filed GNC-2 for placing on record request application for restoration of company as per the approved Resolution Plan. On the request made by Respondent No.1, the Registrar of Companies has restored the name of the Corporate Debtor and in the website of the Registrar of Companies, the company has been updated as ‘active’. It is submitted that there is no merit in the appeal. It is further submitted that the Tripartite Agreement dated 18.06.2021 and 21.06.2021 were all noticed by the Adjudicating Authority in the admission order and despite said agreements has directed for admission. It is submitted that the liability of the Corporate Debtor to make payment to the Financial Creditor shall not be wiped out by any agreement entered by the Corporate Debtor with Respondent No.3. It is further submitted that the settlement letter dated 18.06.2018 was never given effect to and no payments were made by the Corporate Debtor or Respondent No.3 to the Financial Creditor which is matter of record. It is submitted that there is no error in the approval of Resolution Plan by the Adjudicating Authority.
# 7. Learned counsel for the Appellant appearing in Company Appeal (AT) (Ins.) No. 204 of 2024 as well as Company Appeal (AT) (Ins.) No.129 of 2024 submitted that Appellants has also entered into Memorandum of Agreement with the Corporate Debtor under which the Appellants, Pooja Film Company and Pooja Entertainment and Films Ltd. have extended several financial benefits. It is submitted that the claim in Form C was filed on 10.04.2023 by Pooja Film Company as well as by Pooja Entertainment and Films Ltd. which were never admitted.
# 8. Learned counsel for the Resolution Professional opposed the submission of learned counsel for the Appellants in Company Appeal (AT) (Ins.) No. 204 of 2024 and Company Appeal (AT) (Ins.) No.129 of 2024. It is submitted that the claims filed by Pooja Film Company and by Pooja Entertainment and Films Ltd. were never admitted as they had filed the claim much after approval of the Resolution Plan by the Committee of Creditors on 04.11.2022. Hence, the claim has rightly not been accepted. It is submitted that Pooja Entertainment & Films Ltd. has also filed an application being I.A. No.4047 of 2023 seeking direction for admitting claim, which application was rejected by order dated 16.08.2023, which order has not been challenged and has become final.
# 9. We have considered the submissions of learned counsel for the parties and perused the record.
# 10. We may first notice the submission of Mr. Amar Dave, learned senior counsel that the Corporate Debtor having struck off on 29.10.2019 from the Register maintained by Registrar of Companies, the entire proceeding of CIRP against the Corporate Debtor is void and deserve to be set aside. Learned counsel for the Appellant has also referred to ‘Notice of Striking Off and Dissolution’ dated 29.10.2019, Annexure-6 to the appeal, which was published in pursuance of Sub-section (5) of Section 248 of the Companies Act, 2013. It is submitted that there is provision in the Companies Act, 2013 for revival of struck off company and no proceeding was initiated for revival of the company. The approval of Resolution Plan has to be set aside on this ground alone.
# 11. From the facts as pleaded by the Appellant itself it is clear that the Section 7 application by the Financial Creditor against the Corporate Debtor was filed on 19.07.2019. Thus, on the date when application was filed under Section 7, the company was very much in existence and subsequently, on 29.10.2019, the company was struck off by publication of notice under Section 248 Sub-section (5). Learned counsel for the Resolution Professional has referred to the order dated 11.02.2022 passed by the NCLT, New Delhi Bench, Court VI under Section 7 in CP No.(IB) 1804/(ND)/2019. The Corporate Debtor has opposed the admission of the application on the ground that the Company has been struck off. The said argument was noticed by the Adjudicating Authority after noticing the submission and has observed in Para 5 of the judgment that it is no longer res integra, IBC proceedings can still be initiated against the Corporate Debtor which is stuck off. The order dated 11.02.2022 admitting Section 7 application was never sought to be challenged and the ground that company is struck off has already been repelled by the Adjudicating Authority. As noted above, on the date when application was filed, the company was very much in existence and it was struck off in view of notice dated 29.10.2019 subsequently. We may notice the provision of Section 248. Section 248 Sub-section (7) of the Companies Act, 2013 provides as follows:
“248. Power of Registrar to remove name of company from register of companies.
(7) The liability, if any, of every director, manager or other officer who was exercising any power of management, and of every member of the company dissolved under sub-section (5), shall continue and may be enforced as if the company had not been dissolved.”
# 12. We have noticed the submission made by learned counsel for the Resolution Professional that the Resolution Professional has taken steps after approval of Resolution Plan as Chairman of the Monitoring Committee by filing necessary application and necessary form, in consequence to which the company has been now shown as ‘Active’ in the MCA records.
An Additional Affidavit dated 08.04.2024 has been filed by the Resolution Professional. In Para 12.1, 13, 14, 15, 16.1 and 17.1 following has been stated:
“12.1 say that on 18.01.2024, Respondent No. 1 in its capacity as chairperson of the Monitoring Committee which was formed for implementation of the Resolution Plan, issued a letter to the Registrar of Companies requesting for the restoration of the name of the Corporate Debtor in pursuance to the approval of the Resolution Plan approved vide order dated 12.10.2023. Copy of Letter dated 18.01.2024 is annexed herewith and marked as ANNEXURE R-4.
13. Subsequently, Respondent No. 1 in pursuance of the same, filed Form No. INC-28 with the Registrar of Company. Copy of Form No. INC-28 along with receipt is annexed herewith and marked as ANNEXURE R-5.
14. The Respondent No. 1 also filed Form No. GNL-2 for placing on record the requisite application for the restoration of the Corporate Debtor as per the approved Resolution Plan along with Form No. DIR- 12 placing on record the details of the newly appointed management. Copy of Form No. GNL-2 along with receipt is annexed herewith and marked as ANNEXURE R-6. Copy of Form No. DIR-12 along with receipt is annexed herewith and marked as ANNEXURE R-7.
15. Subsequently, the Registrar of Companies in view of the request made by Respondent No. I restored the name of the Corporate Debtor. In pursuance of the same, the status of the Corporate Debtor on the website of the Ministry of Corporate Affairs has also been updated to “Active”. Copy of the Master Data of the Corporate Debtor is annexed herewith as marked as ANNEXURE R-8.
16.1 say that the Resolution Plan has been duly implemented and Respondent No. I has been duly discharged by the members of the Monitoring Committee from her capacity as the Chairperson of the Monitoring Committee w.e.f. 12.02.2024.
17.1 say that the status of the company is has been updated to ACTIVE by the Registrar of Companies on the website of the Ministry of Corporate Affairs as the CIRP has been successfully concluded and the matter now stands completely resolved. Hence, the Appellants cannot now challenge the transaction by which CIRP was initiated.”
# 13. From the above it is clear that the company is now active in the Master Data of the Corporate Debtor in the records of the MCA, which has also been brought on record as Annexure-8 to the Additional Affidavit filed by the Resolution Professional. We, thus, do not find any substance in the submission of learned counsel on behalf of the Ex-Director of the Corporate Debtor that company having been struck off on 29.10.2019 the entire proceedings of the IBC need to be set aside. Company owed financial liability to the Financial Creditor and on default committed by the Corporate Debtor, Section 7 application was filed, as noted above. The same objection was taken by the Corporate Debtor before the Adjudicating Authority that company being struck off and the company being non-existent, application under Section 7 need to be rejected was repelled by the Adjudicating Authority which order has become final. In any view of the matter, the company has been revived. The liabilities of the company cannot be simply washed out by action of company of non-compliance of the provisions of Companies Act, non-filing of the relevant financial documents and other filings. If the submission is accepted of the Appellant that proceeding could not have been proceeded, the easiest thing for a company would be to get struck off to wash of its all liabilities, which submission cannot be accepted. In any view of the matter, the company being now revived and active, we are not satisfied with the submission of the Appellant that on this ground approval of Resolution Plan be set aside. A perusal of the ROC record indicates that last Balance Sheet was filed by the Company on 21.03.2016 and it appears that due to reason of non-filing of relevant balance sheet and other records, the company was struck off.
# 14. Now we may notice the submission of the Appellant that under the Settlement letter dated 18.06.2018 and Tripartite Agreement dated 21.06.2018, the liability of the Corporate Debtor was to be discharged by Respondent No.3 – Super Cassettes Industries Private Limited. Copy of letters have been brought on the record by the Appellant which indicate that letter dated 18.06.2018 was written to Super Cassettes Industries Private Limited signed by Protima Arora on behalf of the Corporate Debtor, Mr. Bhushan Kumar on behalf of Super Cassettes Industries Private Limited as well as by Mr. Nishant Pitti on behalf of Easy Trip Planners Pvt. Ltd. The letter dated 18.06.2018 is as follows:
“Date: 18 June 2018
To
Super Cassettes industries Pvt Ltd.
E-21/6, White House,
Darya Ganj, New Delhi
Dear Mr. Bhushan Kumar,
This has reference to our Settlement Deed dated 14 June 2018 between Kriarj Entertainment Pvt. Ltd. (Kriarj) and Super Cassettes Industries Pvt Ltd (T-series) wherein T-series is supposed to pay an amount of Rs.6,75,00,000/- (Six Crore Seventy Five Lacs Only) to Kriarj as per terms of the said Settlement Deed.
You are requested to kindly make this payment of Rs.6,75,00,000/- (Six Crore Seventy Five Lacs Only) as per terms of the said Settlement Deed to Easy Trip Planners Pvt. Ltd. instead of Kriarj Entertainment Pvt. Ltd on behalf of Kriarj.
We further confirm that Easy Trip Planners Pvt. Ltd. will withdraw all pending suits, appeals, complaints or other proceedings and cease and desist from initiating any fresh litigation against T-Series and any of its films in this regard, with immediate effect.
As per our discussion, you will give producer credit to Mr. Nishant Pitti as one of the nominee of Kriarj in the film “Batti Gul Meter Chalu” and “Fanney Khan”.
Pursuant to the mutual binding understanding as recorded herein above, Kriarj and Easy Trip Planners Pvt. Ltd. hereby confirm that all rights in the said films including but not limited to Batti Gul Meter Chalu and Fanney Khan shall vest solely with T-series with immediate effect and T-series shall be free to commercially exploit all the rights in the said films with out any encumbrances or interference by Kriarj and Easy Trip Planners Pvt. Ltd.
Easy Trip Planners Pvt. Ltd. has signed this letter as a token of their acceptance of the terms mentioned herein above i.e. the binding understanding. All parties have signed hereinbelow as a token of their acceptance.
For Kriarj Entertainment Pvt. Ltd
Agreed & accepted in toto
for Easy Trip Planners Pvt Ltd
Protima Arora
Nishant Pitti
Agreed & accepted in toto
For Super Cassettes Industries Pvt Ltd
Witness:
Bhushan Kumar
Prerna Arora
Aadhar Card No:”
# 15. The agreement dated 21.06.2018 signed by all the three parties is as follows:
“Date: 21.06.2018
TO WHOMSOEVER IT MAY CONCERN
On the basis of the settlement that has been arrived by and in between the Parties e., Super Cassettes Industries Private Limited, Kriarj Entertainment Private Limited and Easy Trip Planners Private Limited. The Parties have decided and agreed to withdraw all complaints, suits, appeals and or any other proceedings pursing before any authorities including but not limited to the following proceedings pending adjudication before the Hon’ble Delhi High Court:
a. CS (Comm.) No. 919 of 2018, titled as Easy Trip Planners Private Limited Vs Super Cassettes Industries Private Limited & Anr.
b. CS (Comm.) No. 919 of 2018, titled as Easy Trip Planners Private Limited Vs Super Cassettes Industries Private Limited & Anr.
c. FAO (OS) (Comm.) No. 122 of 2018, titled as Kriarj Entertainment Private Limited Vs Super Cassettes Industries Private Limited.
Further, the Parties undertake that they shall abide by the terms of the settlement arrived between them.”
# 16. Appellant himself has brought on the record notice/ letter dated 23.06.2018 which was sent to the Super Cassettes Industries Private Limited on behalf of Easy Trip Planners Pvt. Ltd. The notice take objection to various steps taken by the parties and the fact the parties have not abided by the Agreement dated 21.06.2018. It was clearly mentioned that all the understanding between the parties would stand nullified. Paras 7, 8 and 9 of the said notice are as follows:
“7. However, it is surprising to note that within 24 hours of the withdrawal of the Said Appeal and within a few days of entering into of the Said Settlement, Our Client has become aware of actions being taken by you, the Addressee, which are clearly in contradiction to the specific terms of the Said Settlement. It has come to the knowledge of Our Clients that You, the Addressee, are proceeding to release the teaser of the cinematographic film “Batti Gul Meter Chalu” without giving credit to Our Client.
8. Hence, it seems from your said actions, that the Said Settlement was entered into by You, the Addressee with the malafide intentions. It in fact appears that the representations and promises in pursuance of which the Said Settlement was executed, were made to commit fraud on Our Client, thereby inducing Our Client to enter into the Said Settlement. Whereas, now it appears from the conduct of You, the Addressee that you are not intending to abide by the terms of the Said Settlement.
9. In light of all of the above, we, on behalf of Our Client, hereby call upon You, the Addressee to (i) restrain yourself from committing any breach of the terms of the Said Settlement and (ii) issue a confirmation to Our Client that you will be abiding by the terms of the Said Settlement. We also apprise you that in case any step is taken by you to breach the Said Settlement, then all the understanding between the parties would stand nullified and we shall proceed to take appropriate legal action against You, the Addressee.”
# 17. The submission of the Appellant that under the settlement agreement dated 18.06.2018 and 21.06.2018 it was Super Cassettes Industries Private Limited who has to make payment of Corporate Debtor is no more available to the Appellant since one of the parties i.e. the Financial Creditor has already nullified all the understanding in writing within four days from the said settlement. Thus, we are of the view that liability of the Corporate Debtor to discharge its financial debt continues. More so, admission of Section 7 application on the basis of debt and default has become final and in the proceeding regarding plan approval it is not open for the Ex-Director of the Corporate Debtor to contend that there is no debt owed by the Corporate Debtor. We, thus are of the view that submission of the Appellant that debt is to be paid by Super Cassettes Industries Private Limited is fallacious and cannot be accepted. No other grounds have been pressed against order dated 12.10.2023 approving the Resolution Plan. It is well settled that approval of Resolution Plan can be interfered by the Adjudicating Authority or this Tribunal only on very limited grounds. The commercial wisdom of the Committee of Creditors in approving the Resolution Plan has been given paramount status. We may refer to the judgment of Hon’ble Supreme Court in K. Sashidhar vs. Indian Overseas Bank and Ors. – (2019) 12 SCC 150. In para 59 following has been held:
“59. In our view, neither the adjudicating authority (NCLT) nor the appellate authority (NCLAT) has been endowed with the jurisdiction to reverse the commercial wisdom of the dissenting financial creditors and that too on the specious ground that it is only an opinion of the minority financial creditors. The fact that substantial or majority per cent of financial creditors have accorded approval to the resolution plan would be of no avail, unless the approval is by a vote of not less than 75% (after amendment of 2018 w.e.f. 6-6-2018, 66%) of voting share of the financial creditors. To put it differently, the action of liquidation process postulated in Chapter III of the I&B Code, is avoidable, only if approval of the resolution plan is by a vote of not less than 75% (as in October 2017) of voting share of the financial creditors. Conversely, the legislative intent is to uphold the opinion or hypothesis of the minority dissenting financial creditors. That must prevail, if it is not less than the specified per cent (25% in October 2017; and now after the amendment w.e.f. 6-6-2018, 44%). The inevitable outcome of voting by not less than requisite per cent of voting share of financial creditors to disapprove the proposed resolution plan, de jure, entails in its deemed rejection.”
# 18. We, thus, are of the view that there are no grounds raised by the Appellant to interfere in the order dated 12.10.2023 approving the Resolution Plan.
# 19. Coming to the submission advanced by learned counsel for the Appellant in Company Appeal (AT) (Ins.) No. 204 of 2024 and Company Appeal (AT) (Ins.) No.129 of 2024. It is suffice to note that no claim filed by the Appellants was accepted in the CIRP of the Corporate Debtor. The claim according to the Appellant admittedly was filed subsequent to the approval of Resolution Plan by the Committee of Creditors. Pooja Entertainment & Films Ltd. has filed an application seeking admission of its claim being I.A. No.4047 of 2023, which was also got dismissed on 16.08.2023. Rejection of the I.A. No.4047 of 2023 has not further challenged. In both the Appeals Company Appeal (AT) (Ins.) No. 204 of 2024 and Company Appeal (AT) (Ins.) No.129 of 2024 no grounds have been made out to in interfere with the order dated 12.10.2022 approving the Resolution Plan of the Corporate Debtor.
# 20. We, thus, do not find any ground in the above appeals to interfere with the order dated 12.10.2023 approving the Resolution Plan of the Corporate Debtor. In result, Company Appeal (AT) (Ins.) No.72 of 2024, Company Appeal (AT) (Ins.) No. 129 of 2024 and Company Appeal (AT) (Ins.) No.204 of 2024 are dismissed.
Parties shall bear their own costs.
-------------------------------------------
No comments:
Post a Comment