BMW India Financial Services Pvt. Ltd. vs Ashique Ponnamparambath & Anr.

Justice M. Venugopal, Member (Judicial):

The `Petitioner’ / `BMW India Financial Services Pvt. Ltd.’ (`Financial Creditor’ / `Original Financial Creditor’ of the `Corporate Debtor’) has filed IA No. 106 of 2023, to intervene in Comp. App (AT) (CH) (INS.) No. 22 of 2023.

According to the Petitioner in IA No. 106 of 2023 in Comp. App (AT) (CH) (INS.) No. 22 of 2023, the `Liquidation Order’, passed by the `Adjudicating Authority’, does not merit any interference in the instant case, because of the fact, by way of 100% majority, the `commercial decision’, was taken to `Liquidate’ the `Corporate Debtor’ and the said decision of the `Committee of Creditors’, was supported by reasons, as per `9<sup>th</sup> Meeting’ of the `Committee of Creditors’, which took place on 25.07.2022 and 28.07.2022.

Also that, the `commercial wisdom’ of the `Committee of Creditors’, is not amenable to Judicial Review and hence, the `Liquidation Order’, passed by the `Adjudicating Authority’, is not to be interfered with, in the present proceedings.

Moreover, the plea of the `Appellant’ that the `Corporate Debtor’ is an `MSME’, and hence, all endeavours are to be taken to review the `Corporate Debtor’, is a mere gimmick of the `Appellant’ to derail and delay the outcome of `Corporate Insolvency Resolution Process’ / `Liquidation Process’ of the `Corporate Debtor’.

That apart, the `Corporate Debtor’, was registered as an `MSME’, only on 19.04.2021, much after the filing of `Insolvency Application’, by the Petitioner on 12.10.2020.

It is projected on the side of the Petitioner that various allegations were made by the `Appellant’, against the `Petitioner’, including, but not limited to the alleged non-payment of Compensation to the `Appellant’, and `Systemic Fraud’, committed by the `Petitioner’, for which, a `First Information Report’, was filed under `Sections 406, 420, 465, 471 and 34 of the Indian Penal Code, 1860’, was registered against it.

It is brought to the notice of this `Tribunal’, the Hon’ble High Court of Kerala, by an Order dated 29.11.2022, had allowed Crl. MC No. 4828 of 2020 (Quash Petition – filed by the `Petitioner’) and the `First Information Report’, was quashed by an `Order’ dated 29.11.2022, against which, `Special Leave’ to `Appeal’ (Crl.) No(s). 766 and 767 of 2023, were filed and they got `dismissed’ on 27.01.2023. As such, the allegations against the `Petitioner’, are baseless, legally `untenable’ and `unsubstantiated’ one.

It is version of the `Petitioner’, in the present case, the `combined Resolution Plan’ of the `Appellant’, for `Platino Classic’, and the `Corporate Debtor’, is legally untenable and ought to be `dismissed’.

The stand of the Petitioner / Intervenor is that, pursuant to the `Liquidation Order’, the `Petitioner’, has filed its `Claim’, before the `Liquidator’ of the `Corporate Debtor’, which as on the `Liquidation Commencement Date’ i.e., 30.09.2022 is to an extent of INR 31,89,07,008.69, and in full, the `Claim’, was admitted by the `Liquidator’.

Moreover, it is the Plea of the Petitioner, that the continuation of the `Liquidation Process’, is in the best interests of all the `Stakeholders’ of the `Corporate Debtor’, and the `Balance of Convenience’ in the present case, is in favour of the `Petitioner’ and against the `Appellant’.

The Learned Counsel for the Petitioner / Intervenor points out that the valid `Claim’ of the `Petitioner’, `Stakeholders’ of the `Corporate Debtor’ and the `Claim’ of the other `Creditors’, is sought to be defeated by the `Appellant’ (`1^st Respondent’), by derailing the `Proceedings’, as envisaged under the `Code’.

It is the version of the Petitioner that any delay in the `Liquidation’ of the `Corporate Debtor’, will significantly deplete the `Asset Maximisation’, thereby, impacting all the `Stakeholders’ of the `Corporate Debtor’, and therefore, prays for `Allowing’ the `IA No. 106 of 2023 in Comp. App (AT) (CH) (INS.) No. 22 of 2023’ (seeking to `implead’ in the main `Appeal).

In response, it is the submission of the `1<sup>st</sup> Respondent / Appellant’, that the `Appellant’ in the capacity of `Managing Director’ of the `Corporate Debtor’, had opened two Show Rooms in the State of Kerala, till the year 2011, as per the specifications of BMW, etc.

Further, the `Appellant’, on behalf of the `Corporate Debtor’, and its Group Companies were shocked to see the conduct of the BMW India FS and the `Systemic Fraud’, which was perpetrated by the BMW Group and hence, filed a `First Information Report’ dated 15.02.2020, under various `Sections’ of the `Indian Penal Code’, and under `Section 154’ of the `Criminal Procedure Code’, before the Judicial First Class Magistrate Court.

According to the Appellant, the largest Claimant in both the `Corporate Debtors’, is the BMW Group for the very same debt as the present `Corporate Debtor’, was added as a `Co-borrower’ for the same debt, which was owed by the `Group Company’ of the `Corporate Debtor’, to the BMW Group. Further, the `Corporate Debtor’, is an `MSME’, and the endeavours, is to be taken for reviving the `Corporate Debtor’, as per the objectives of the `Code’.

The stand of the Appellant is that, the combined value of both the `Corporate Debtors’, is approximately to an extent of Rs.41 Crores and that the total `combined Financial Creditors Claims’ (without duplicating the Claims of BM Group is Approx. Rs.49 Crores, and the `Appellant’ in its objections, improved its Offer, under the proposed Combined Resolution Plan to Rs. 42 Crores.

The Learned Counsel for the Appellant points out that the Appellant is willing to submit an` improved proposal’, before the `Committee of Creditors’, and the `proposed Combined Offer’, which is more than the `Liquidation Value’ of the Corporate Debtor’.

The version of the 1^st Respondent / Appellant is that, BMW Group is controlling the `Committee of Creditors’ of both the `Corporate Debtors’, as well as `Koyenco Autos Private Limited’, having 68.15% and 74.80% `Voting Shares’, respectively.

The objection of the 1^st Respondent / Appellant is that, the `Petitioner’ in IA No. 106 of 2023 in Comp. App (AT) (CH) (INS.) No. 22 of 2023, cannot be permitted to be `impleaded’ as one of the `Respondents’ to the main Comp. App (AT) (CH) (INS.) No. 22 of 2023 and further that, according to the `Petitioner’, its `Claim’, was fully admitted by the `Liquidator’, and therefore, it is not a proper and necessary Party to the main `Appeal’.

This `Tribunal’, on going through the respective contentions advanced on either side, taking into account of the facts and circumstances of the instant case, in a conspectus fashion and also keeping in mind the full `Claim’ of the `Petitioner’, was admitted by the `Liquidator’, this `Tribunal’ comes to a consequent conclusion that the `Petitioner’ / `Intervenor’, is not a necessary or a proper `Party’, to be arrayed as one of the `Respondents’ (Viz. proposed 3<sup>rd</sup> Respondent) and even without the Petitioner’s presence, this `Tribunal’, is enjoined to `dispose of’ the main `Appeal’. Viewed in that perspective, the IA No. 106 of 2023 in Comp. App (AT) (CH) (INS.) No. 22 of 2023, sans merits and it fails.

In fine, IA No. 106 of 2023 in Comp. App (AT) (CH) (INS.) No. 22 of 2023 is dismissed. No costs.