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Judgment
ORDER
PER: RAHUL BHATNAGAR, MEMBER (TECHNICAL)
This petition has been filed by Bank of Baroda, through Authorised Signatory of Financial Creditor, Mr. Shivam, Senior Manager, to initiate Corporate Insolvency Resolution Process (“CIRP”) against M/s. Ultimate Infovision Private Limited under Section 7 of the Insolvency and Bankruptcy Code 2016 (hereinafter referred to as “the Code”) for the alleged default on the part of the Respondent in repayment of debt of Rs. 11,17,38,792/- (Rupees Eleven Crores Seventeen Lakhs Thirty-Eight Thousand Seven Hundred Ninety-Two) as on 30.09.2022. The details of transactions leading to the filing of this application as averred by the Applicant are as follows:
That in 2014, one M/s Vardhaman Buildtech Pvt. Limited (Principal Borrower), had approached the Applicant Bank for availing credit facility in the form of Performance Bank Guarantee for an amount of Rs. 11,00,00,000/-
That M/s Vardhaman Buildtech Pvt. Limited (In Joint Venture i.e. Jai Krishna JV) had undertaken a Work’s Contract (Construction Project) for Development of a Township with the Director of Town and Country Planning Department, Govt. of Haryana.
That in order to execute this Construction Project, Bank Guarantees of around 11 Crores were to be submitted by M/s Vardhaman Buildtech Pvt. Limited in favour of the Director of Town and Country Planning Department, Haryana.
That M/s Vardhaman Buildtech Pvt. Limited (Principal Borrower) and M/s Ultimate Infovision Pvt. Ltd. (Corporate Debtor) had the same shareholders and Directors.
That the Corporate Debtor agreed to become a Corporate Guarantor for M/s Vardhaman Buildtech Pvt. Limited and also agreed to mortgage its property situated at Industrial Plot No. 12A, Sector KP-03, Greater Noida Industrial Development Area, Gautam Buddh Nagar, Uttar Pradesh, by executing a Contract of Guarantee, in favour of the Applicant Bank.
That the borrower availed the facility by executing the requisite documents. The “Corporate Debtor/Guarantor guaranteed the repayment, evidenced by an Agreement of Corporate Guarantee on September 25, 2014. To secure the Bank Guarantee Facility availed by it, the Corporate Guarantor established a legal mortgage on their property at Industrial Plot No. 12A, Sector KP03, Greater Noida Industrial Development Area, Gautam Buddh Nagar, Uttar Pradesh, after obtaining requisite permission from the GNOIDA.
The Borrower requested Bank of Baroda for two performance-based bank guarantees totaling INR 10,39,73,000/-. The guarantees were issued in favor of the Director of Town and Country Planning Department, Haryana.
That on 22.05.2017 and 24.05.2017 the Directorate of Town and Country Planning, Haryana- (Beneficiary) wrote two letters to the Applicant Bank stating that 'It may please be considered as written confirmation for the purpose of encashment/revocation of the said bank guarantee if the same is not renewed before its expiry'.
The Applicant Bank forwarded the said letters to M/s Vardhman Buildtech Pvt. Ltd. through email with a request to renew/ revalidate the aforesaid Bank Guarantees. However, even after repeated requests/reminder of the Applicant the said Bank Guarantees were not renewed before its expiry by the Borrower. Thus, as a result of non-renewal of both the Bank Guarantees within the existence of their term, the Applicant Bank was constrained to treat the Bank Guarantees as invoked/en-cashed. The Beneficiary requested that Bank for enhancement of the Said BGs vide its letter dated 24th November 2017. Thus based on such request the BGs amount was duly remitted to the Beneficiary on 30th Day of November 2017.
That between December 2017 and February 2018, the Applicant Bank called upon the Borrower and "Corporate Debtor/Guarantor to repay the amount due but they failed to pay the same.
That the Applicant issued a demand notice u/s 13(2) of SARFAESI Act, 2002 on 31st March 2018 calling upon the CD/Guarantor and Borrower to pay Rs, 8,21,47,651/- along with interest within 60 days.
That in June 2018 the applicant bank filed an Original Application for recovery of Debt before DRT, Delhi vide IA/1161/2018.
That the CD challenged the encashment/invocation of the said BGs before DRT vide SA No 232/2018 however the DRT rejected the plea of the Corporate Debtor. xiv. Thereafter the CD offered One Time Settlement (OTS) to the Applicant Bank in August 2019. The same was accepted by the Applicant Bank.
That out of total outstanding amount of Rs. 9.89 Crores the CD paid only Rs. 2.25 Crores. The Bank has not been able to recover the loan hence the present application is filed.
The Corporate Debtor filed its reply in which the following contentions were made:
That on 23.04.2014, the Petitioner sanctioned a conditional bank guarantee facility with the limit of Rs. 11 cr. in favour of Director General of Town & Country Planning, Haryana [Hereinafter referred to as DTCP] for the purpose of IDC and EDC for grant of license for the development of the Residential Group Housing Colony from DTCP.
That the aforesaid bank guarantee limit of Rs. 11 cr. was secured by the Corporate Debtor by the way of an equitable mortgage of the secured asset i.e. Industrial Plot No. 12A, admeasuring 38014.54 sq. mtrs. Sector KP-03, situated at Greater Noida, Industrial Development Authority, District Gautam Budh Nagar, Uttar Pradesh.
That the said Bank Guarantees were raised and given by the 'Principal Borrower' solely with the reason that they shall be accepted as developer by DTCP and granted permission/ license to develop the said project. However, DTCP never granted any permission to M/s. Vardhman Buildtech Pvt. Ltd./ Ltd./ Principal borrower to develop the said project. Therefore, the very invocation of Conditional Bank guarantee by the Petitioner without the grant of license appears to be shady, as no liability to encash the Bank guarantee in favour of DTCP can arise when DTCP itself has failed to complete its part of the agreement.
It was due to this reason, that the collaboration agreement had to be cancelled vide letter dated 10.04.2017 [By M/s. Jai Krishna Artec JV]. The said termination was duly intimated to DTCP.
That despite having been duly informed of the termination of the collaboration agreement dated 11.11.2013 entered into between M/s. Vardhman Buildtech Pvt. Ltd. and JV and Land-owning companies, DTCP sent the purported letters dated 22.05.2017 and 24.05.2017 to the Petitioner herein requesting for encashment/ revocation of bank guarantee.
That the Petitioner has in an attempt to mislead this Adjudicating Authority has suppressed the aforesaid letters from this Tribunal. The said letters form part of the record before DRT.
That bare perusal of the letter[s) dated 22.05.2017 and 24.05.2017 would reveal that the said letters cannot be said to be a valid invocation of Bank guarantees. Rather, the said letters were a formal request for renewal of the said Bank Guarantees. Thus, it is submitted that the very fact of encashment of the said Bank Guarantees appears to be shady and is invalid in the eyes of law.
That the Petitioner even acted upon the request made by DTCP [Vide letter[s} dated 22.05.2017 and 24.05.2017] to renew the said bank guarantees. That the Petitioner responded to DTCP vide letter dated 07.10.2017, wherein DTCP was informed that necessary information is sought from the 'Principle Borrower' to enable the Bank/ Petitioner to renew the said Bank Guarantees.
In pursuance to the request made by DTCP, the Petitioner on 09.10.2017 sent an email to the 'Principle Borrower' requesting certain documents so that the said bank guarantees can be renewed.
Further on 16.10.2017, the bank/ Petitioner was duly intimated that the said bank guarantees have already expired and thus, there is no question of renewal of the same. However, the Petitioner bank maintained that the said bank guarantees are still valid even after the date of expiry and can be renewed. In this background, the Corporate Debtor sent a letter dated 26.10.2017. Thus, the stand taken by the Petitioner that the bank guarantees were encashed due to non- renewal is false and incorrect.
xi.That the Financial Creditor has conspicuously failed to annex any document invoking the said Corporate Guarantee against the Corporate Debtor. Invocation of a Corporate Guarantee is essential to raise any claim qua the Corporate Guarantor [as alleged]. That without proper invocation of Guarantee, the right to sue does not arise.
xii.That Bank has illegally by resorted to invoke Bank Guarantees in favor of the 'Beneficiary'/ DTCP by acting hand in glove with them.
xiii.That the Corporate Debtor was to secure the payments made by the bank on encashment of the bank guarantees by DTCP/ beneficiary on fulfilment of the terms of the agreement. The alleged invocation of Bank Guarantees by the Bank in favour of DTCP is erroneous and thus cannot fasten any liability upon the Corporate Debtor due to the following reasons:
a. The Bank Guarantees could not have been invoked and enchased post expiry period. The Bank Guarantee bearing No. 0586IGPER000215, dated 08.01.2015, for an amount of Rs. 1,56,49,000/- was valid from 08.01.2015 to 07.07.2017 [Hereinafter referred to as the 'First bank Guarantee']. Further, the second Bank Guarantee bearing No. 0586IGPER000515, dated 13.01.2015, for an^ amount of Rs. 8,83,24,000/- was valid from 13.01.2015 to 12.07.2017. Thus, the invocation and encashment of the aforesaid bank guarantees post the expiry date on 30.11.2017 is erroneous.
b. The conditional Bank Guarantees cannot be enchased without fulfilment of the condition specified. That present is not a case of unconditional bank guarantees but conditional ones. In a case of conditional bank guarantee, the beneficiary cannot have an unfettered right to invoke the bank guarantee without fulfilling the conditions/ considerations as specified under the bank guarantees. The fact that the Bank Guarantees in the present case were conditional is evident from the very first para, the same is reproduced hereunder: -
"1.In consideration of the director, agreeing to grant license to the owner/ developer on his request to take up development works [Roads, Sewerage, SW Drains, water supply, and Horticulture) in the group housing colony under the Haryana Development and Regulation of Urban Areas rules, 1975 (herein after referred to as the act] on the land earmarked of the group housing on the fulfillment of all the conditions of Rule 11 of the rules and agreement, the bank do hereby guarantee to the government that:..." Thus, the bank guarantee could not have been encashed by the Petitioner bank without the grant of license by the beneficiary/ DTCP to the principal borrower, which was admittedly not issued.
c. That there is no 'Debt' or 'Default' due qua the Financial Creditor. That no debt accrued upon the principal borrower due to wrongful encashment of the said bank guarantees by the Petitioner bank.
d. That Corporate Insolvency Resolution Process (CIRP) was initiated against the principal borrower by the Adjudicating Authority, Principal Bench, New Delhi vide order dated 29.01.2019 passed in CP [IB] No. 1383 (PB) 2018. Further, a Resolution Plan was approved by the Committee of Creditors ['COC'] on 15.10.2019.I that it was only upon approval of the resolution plan by COC, the Petitioner herein filed a claim form under Form- C before the Resolution Professional on 28.03.2019. Be that as it may, the Resolution Professional (of principle borrower) outrightly rejected the claim filed by the Petitioner because of the wrongful invocation of bank guarantee by the Petitioner. Further on 28.01.2022, the Resolution Plan was approved by the Adjudicating Authority, Principle Bench, New Delhi vide order dated 28.01.2022 passed in CP [IB] No. 1383 [PB]/ 2018.
It is a well settled principle of law that liability of the Guarantor/ Surety is co-extensive with that of the principal borrower. In the present case, there was no subsisting liability of the principal borrower [Evident from the rejection of claim filed before the Resolution Professional], thus, any liability cannot be fastened upon the Guarantor by the virtue of Section 125 of the Contracts Act
e. That the Petitioner in the present case is a person having only security interest over the assets of Corporate Debtor and thus would stand outside the definition of 'Financial Creditors' as defined in Sec 5(7] of Insolvency and Bankruptcy Code, 2016. In fact, the Petitioner is not a creditor of any nature whatsoever of the Corporate Debtor. The Petitioner has no right of recovery of any debt from the Corporate Debtor and has a limited right of enforcing and realising the value of its securities.
We have heard the Ld. Counsel appearing for the Petitioner and the Respondent and perused the averments made in the application and reply filed on behalf of the parties.
Admittedly, the Applicant Bank sanctioned a Credit Facility (Non-fund Based - Bank Guarantee) of Rs. 11,00,00,000/- on April 23, 2014 to M/s Vardhaman Buildtech Private Limited for which M/s Ultimate Infovision Pvt. Ltd (Corporate Debtor) has given Corporate Guarantee and also mortgaged its asset in favour of the Applicant Bank.
The encashment of the aforementioned Bank Guarantees (BGs) was done by the Beneficiary vide their office letter no. DGTCP/AO(III)/2017/486 dated 22.05.2017 and vide office letter no. DGTCP/AO(III)/2017/497 dated 24.05.2017, which has been admitted by the Corporate Debtor in its reply.
The issues which need to be adjudicate by this Adjudicating Authority are as under: -
I. Whether the Bank Guarantee was conditional and whether invocation of bank guarantee was illegal?
II. Whether there is no debt and default in the present case?
III. Whether the Corporate Guarantor is discharged from its liability as the claim of the petitioner filed was outrightly rejected by the RP of Principal Borrower?
As far as the conditionality of the Bank Guarantee is concerned, the Corporate Debtor has stated that the said bank guarantee is conditional on the issuance of a license to the CD. However, nowhere in the said bank guarantee is the word ‘conditional’ used. Furthermore, in paragraph 1, which was referred to by the CD in its reply, the relevant extract is reproduced below:
"1.In consideration of the director, agreeing to grant license to the owner/ developer on his request to take up development works [Roads, Sewerage, SW Drains, water supply, and Horticulture) in the group housing colony under the Haryana Development and Regulation of Urban Areas rules, 1975 (herein after referred to as the act] on the land earmarked of the group housing on the fulfillment of all the conditions of Rule 11 of the rules and agreement, the bank do hereby guarantee to the government that:..." Even if we consider and accept the CD's submission that the said BGs were conditional, the conditionality would at best involve agreeing to grant a license to the owner/developer. The said BGs are silent on whether the license was actually granted, and it is undisputed that the beneficiary agreed to grant the license. Furthermore, it was alleged by the CD that the beneficiary illegally invoked the bank guarantee, the issue of invocation of Bank Guarantee was challenged before the Ld. DRT in SA No 232/2018 and the Ld. DRT vide its order dated 24.10.2018 in para 6 has held as under: -
6.The basic issue raised by the Applicant is that the BGs were not invoked in time before their expiry. Bank Guarantees are universally acceptable for the sole reason that they are paid on demand without demure. Any dispute between the customer requesting issue of a Bank Guarantee and the beneficiary thereof does not have an iota of effect on the liability of issuing Bank. The issuing Bank is not privy to the underlying contract between both the said parties, but merely assumes financial liability in case of non-performance or failure to meet a financial commitment on the part of its client. A notice by the beneficiary within the validity period or extended actionable claim period triggers the liability of the issuing Bank. Further in Para 7 it was stated that 'In the instant case, it is clear that the Respondent no 2 had invoked the BGs vide their letters dated 22.05.2017 and 24.05.2017, well before the expiry dates of the respective BGs and even in terms of the restrictive clause no. 6 of the said BGs, it was proper notice to the issuer of the irrevocable BGs issued i.e. the Respondent no 1/Bank. All the indulgence shown by the Respondent no 1, in accommodating its client- the Respondent no 4, was in the normal course of business to allow them to get them renewed/ revalidated. However, the passage of time did not render the notice in writing of invocation of the BGs as invalid or improper and they all through remained as deemed to have been invoked. The late remittance to beneficiary i.e., Respondent no 2 was on account of seeking the original BGs to be surrendered and it does not render the payment to have been made after the expiry of the validity of the BGs.' From the above judgement of Ld. DRT, it is clear that the issue of invocation of Bank Guarantee was taken up and decided on merits. Hence, we are unpersuaded by the submission of the Corporate Debtor that the invocation of Bank Guarantee was illegal.
As far as the second issue is concerned regarding Debt and Default, in August 2019, the Corporate Debtor offered One Time Settlement (OTS) to the Financial Creditor, which was accepted by the FC. The OTS dated 03.09.2019 was executed between FC and CD. However, the Corporate Debtor/Guarantor failed to fulfill the terms and conditions of the settlement. The OTS, being a formal acknowledgment of the outstanding debt, implies an admission of debt. Consequently, any subsequent non-payment in accordance with the agreed settlement terms shall be construed as a default. Reliance can be placed upon the judgement of Hon’ble NCLAT in the matter of Hrushikesh Balakrishna Paranjape vs Canara Bank and Another (2022 SCC OnLine NCLAT 4995) (Company Appeal (AT) (Insolvency) No. 685 of 2022) wherein it was held that:
“Learned Counsel for the Appellant submits that the Corporate Debtor has approached the Bank for OTS, and it was under consideration when the admission order was passed. Learned Counsel for the Bank submits that the Bank has never accepted the OTS proposal, and debt and default are admitted. Hence the Adjudicating Authority did not commit any error in admitting Section 7 Application. It is submitted that CoC is also proceeding with the Resolution Plan under consideration.
After hearing the learned Counsel for the parties, we are of the view that, in view of the fact that debt and default are admitted, the case of the Appellant that OTS was submitted, itself pre-supposes admission of the debt. We thus do not find any error in the order passed by the Adjudicating Authority, admitting Section 7 Application. We only observe that it is always open for the Appellant and Bank to enter into a settlement, and in the event if any settlement is arrived, the route of Section 12A of IBC is open to the parties.” The invocation of Bank Guarantee and OTS by Corporate Debtor itself confirms the debt and its subsequent default.
Now turning towards the third issue that whether the CD is discharged from its liability since RP has rejected the claim of the Applicant Bank, it is observed that the specific contract of Corporate Guarantee dated 25.09.2014 was entered into between the Corporate Debtor/Corporate Guarantor with the bank (BoB). In the Corporate Guarantee it was stated as under: -
3.In the event of any default on the part of the Borrower in payment/repayment of any of the moneys referred to above or in the event of any default on the part of the Borrower to comply with or perform any of the terms, conditions, and covenants contained in the Loan Agreements, the Guarantors shall, upon demand, forthwith pay to BOB without demur all of the amounts payable by the Borrower under the Loan Agreements.
4.The Guarantors shall also indemnify and keep BOB indemnified against all losses, damages, costs, claims and expenses whatsoever which BOB may suffer, pay or incur by reason of or in connection with any such default on the part of the Borrower including legal proceedings taken against the Borrower and/or the Guarantors for recovery of the moneys referred to in Clause (2) above
15.The liability of the Guarantors under this guarantee shall not be affected by: -(I) Any change in the constitution or winding up of the Borrower or any absorption, merger or amalgamation of the Borrower with any other company, corporation or concern; or (II) Any change in the management of the Borrower or take-over of the management of the Borrower by Central or State Government or by any other authority; or (III) Acquisition or nationalisation of the Borrower and/or of any of its undertaking(s) pursuant to any Law; or (IV) Any change in the constitution of BOB; or (V) Any change in the set up of the Guarantors which may be by way of change in (constitution, winding up, voluntary or otherwise, absorption, merger or amalgamation or otherwise; (VI) The absence or deficiency of powers on the part of the Guarantors to give guarantees and/or Indemnities or any irregularity in the exercise of such powers.
16.BOB may enforce the guarantee contained herein and any other security created by the Borrower in favour of BOB simultaneously…….. ”
Further, as per Section 128 of the Contract Act, 1872 the obligation of the guarantor is coextensive with that of the principal borrower to defray the debt, as predicated in Section 128 of the Contract Act. The status of the Principal Borrower has no effect/bearing on the rights of the Applicant Bank to proceed against the Corporate Guarantor. Further the Applicant Bank filed an application before the NCLT Principal Bench to consider the claim against the borrower M/s Vardhman Buildtech Pvt. Ltd. the Hon’ble NCLT Principal Bench vide order dated 18.12.2023 held as under: -
“The prayer made in the captioned IA is for direction to the RP to issue claim acceptance letter to Bank of Baroda and to release the share of the bank i.e. the Applicant. It is also the prayer made in the application that the audit of entire CIRP be directed. Nevertheless, during the course of hearing, Ld. Counsel appearing for the Applicant (BoB) could draw our attention to the decision taken by the RP, pursuant to our order dated 14.11.2022 passed in IA3957/2022 and submitted that in the wake of the order of approval of resolution plan, the applicant i.e. BoB would not be in a position to recover its money by disposing of the securities pledged to it by CD as the CD could take such stand/defence before DRT. We make it clear that in terms of the provisions of Section 31 (3) (a) of IBC, 2016 on approval of resolution plan, moratorium cease to operate and neither the aforementioned decision taken by RP nor the approval of plan would come in the way of the Petitioner to recover the amount paid by it to DTCP on invocation of bank guarantee, given by it at the instance of CD, by disposing of the securities pledged with it by CD. With such clarification, the present application stands disposed of.”
The Coordinate Bench was also of the view that there is no bar on Applicant Bank to recover the bank guarantee by disposing the security pledges with it with the CD. Therefore, we see no reason why the Corporate Debtor should be discharged from its liability, in the light of Corporate Guarantee dated 25.09.2014.
A mere reading of the provision under Section 7 of the IBC shows that in order to initiate CIRP under Section 7, the Applicant is required to establish that there is a financial debt and that a default has been committed in respect of that financial debt. The Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication regarding the occurrence of default before admitting the application. The material on record clearly shows that there was a debt, and the CD has committed a default in the repayment of the outstanding debt amount which was admitted by the Corporate Debtor.
We are satisfied that the present application is complete in all respects and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt.
In light of the above and in terms of the acceptance of the existence of debt and its default by the Corporate Debtor in its reply to the present application, this Tribunal admits this petition and initiates CIRP on the Corporate Debtor with immediate effect.
Sub-section (3) (b) of Section 7 mandates the Financial Creditor to furnish the name of an Interim Resolution Professional. In compliance thereof the applicant has proposed the name of Ms. Reshma Mittal for appointment as Interim Resolution Professional having registration number IBBI/IPA-001/IP-P00297/2017-2018/10541. However, from the website of IBBI it is observed that the proposed IP does not have a valid AFA. Therefore, from the panel of Insolvency Professional(s) (IPs) valid for the period 1st January, 2024 to 30th June, 2024 issued by IBBI in terms of Section 16(4), this Adjudicating Authority, appoints, Mr. Bharat Bhushan Sethi having registration number IBBI/IPA-002/IP-N00650/2018-2019/12034 (Email – [email protected]), to act as Interim Resolution professional in the matter. He shall take such other and further steps as are required under the statute, more specifically in terms of Section 15, 17 and 18 of the Code. The IRP is directed to file its consent and valid AFA within 7 days from today.
We direct the Applicant to deposit a sum of Rs. 2 lacs with the Interim Resolution Professional, namely Mr. Bharat Bhushan Sethi to meet out the expenses to perform the functions assigned to him in accordance with regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within one week from the date of receipt of this order by the Financial Creditor.
In pursuance of Section 13 (2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 7 of the Insolvency & Bankruptcy Code, 2016.
We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d) of the Code. Thus, the following prohibitions are imposed:
“(a)the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
(b)transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;
(c)any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
(d)the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.”
It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14 (3) (b) of the Code.
The Interim Resolution Professional shall perform all his functions contemplated, inter-alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the day to day affairs of the ‘Corporate Debtor’. In case there is any violation committed by the ex-management or any preferential/ undervalued/ tainted/illegal transaction by ex-directors or anyone else, the Interim Resolution Professional shall make an application to this Adjudicating Authority (Tribunal) with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the ‘Corporate Debtor’ as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations.
The office is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, NCT of Delhi & Haryana at the earliest possible but not later than seven days from today. The Registrar of Companies shall update its website by updating the status of ‘Corporate Debtor’ and specific mention regarding admission of this petition must be notified to the public at large.
Let copy of the order be served to the parties.
This is an application filed by the Financial Creditor under Section 22(3)(b) of the Insolvency and Bankruptcy Code, 2016 seeking appointment of Ms. Reshma Mittal as RP in place of the IRP, Mr. Bharat Bhushan Sethi.
Learned Counsel for the Applicant submits that in the 2nd CoC meeting held on 10.11.2025, the CoC resolved with 93.89% voting share, to appoint Ms. Reshma Mittal, having Registration No. IBBI/IPA-001/IP-P00297/2017-2018/10541, as the Resolution Professional in place of the IRP. It is further submitted that by the same resolution, the Applicant was authorized to file the present application. The valid AFA and consent of the proposed RP are on record.
In view of the above, Ms. Reshma Mittal is appointed as the Resolution Professional, replacing the IRP.
Accordingly, IA stands disposed of.