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. 105 of 2023 to intervene in Comp. App (AT) (CH) (INS.) No. 4 of 2023.

According to the Petitioner in IA No. 105 of 2023 in Comp. App (AT) (CH) (INS.) No. 4 of 2023, the `Liquidation Order’, does not merit any interference because of the fact that in the instant case, the `Committee of Creditors’, by means of 97.7% majority took a `commercial decision’, to `Liquidate’ the `Corporate Debtor’. Also that, the `commercial wisdom’ of the `Committee of Creditors’, is not amenable to `Judicial Review’, and as such, the `Liquidation Order’, passed by the `Adjudicating Authority’, is not to be `displaced / dislodged’, by this `Tribunal’. Furthermore, the `Corporate Debtor’ was IA No. 105 of 2023 in Comp. App (AT) (CH) (INS) No. 4 of 2023 registered as an `MSME’, only on 19.04.2021, much after the filing of the `Insolvency Application’, by the `Federal Bank’.

It is represented on behalf of the Petitioner that, in the instant case, the `Consolidated Corporate Insolvency Resolution Process’, is not feasible or viable / beneficial, either to `Corporate Debtor’ or its `Stakeholders’.

It is averred in IA No. 105 of 2023 in Comp. App (AT) (CH) (INS.) No. 4 of 2023 that the emphasis of the `Appellant’ is that, the `Corporate Debtor’, is an `MSME’, and 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 the `Corporate Insolvency Resolution Process’ / `Liquidation Process’ of the `Corporate Debtor’.

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’.

According to the Petitioner, 97.70% of the `Committee of Creditors’, had voted in favour of the `Resolution’ and despite issuance of two Form Gs, only one `Expression of Interest’, was received, and that too from the `Appellant’, whose `Plan’, had serious discrepancies and provided for a payment, which is not `viable’, as per the `commercial decision’ of the `Committee of Creditors’.

The Learned Counsel for the Petitioner points out that against the `Petitioner’, various allegations are made by the `1^st Respondent’ / `Appellant’, including, but not limited to the alleged non-payment of Compensation to the `Appellant’ and `Systemic Fraud’, having been committed by the `Petitioner’, for which, a `First Information Report’ dated 15.02.2020 under `Sections 406, 420, 465, 471 and 34 of the Indian Penal Code’, 1860 was registered under the `Petitioner’.

According to the Petitioner / Intervenor, the Hon’ble High Court of Kerala had allowed Crl. MC No. 4828 of 2020 (Quash Petition), filed by it and the `First Information Report’, was quashed on 29.11.2022, against which, `Special Leave’ to `Appeal’ (`Crl’.) No(s) 766 and 767 of 2023 were filed and the same were dismissed on 27.01.2023, by the Hon’ble Supreme Court of India. As such, the allegations made by the `1<sup>st</sup> Respondent’ / Appellant’ are legally, `untenable’ and `unsubstantiated’ one.

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. 105 of 2023 in Comp. App (AT) (CH) (INS.) No. 4 of 2023’ (seeking to `implead’ in the main `Appeal).

Conversely, it is the contention of the `1<sup>st</sup> Respondent’ / Appellant’ that the `Corporate Debtor’, was a non-exclusive Dealer of BMW India Private Limited, involved in the Business of selling BMW Cars in Kerala State and BMW India, is one of the `Financial Creditors’ of the `Corporate Debtor’, having a Voting Share of 9.48% in the `Committee of Creditors’. Before the `Adjudicating Authority’, the `Liquidator’, filed an `Application’, for passing an `Order of Liquidation’, of the `Corporate Debtor’ and the `Adjudicating Authority’, passed an `Order of Liquidation’, on 30.09.2022, resulting in the instant Comp. App (AT) (CH) (INS.) No. 4 of 2023, projected by the `1<sup>st</sup> Respondent’ (`Petitioner / Appellant’).

It comes to be known that before the `Adjudicating Authority’, the `Appellant’, had appeared and filed a `Reply’, objecting to the `Liquidation’ of the `Corporate Debtor’, on the premise that the `Corporate Debtor’, is an `MSME’ and since the `Debts’ are duplicated in both the `Corporate Debtors’, the `Appellant’, may be permitted to submit a `combined Resolution Plan’, qua both the `Corporate Debtors’, before the `Committee of Creditors’, and direct them to reconsider the same.

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.

Apart from the above, the `Petitioner’ in IA No. 105 of 2023 in Comp. App (AT) (CH) (INS.) No. 4 of 2023, cannot be permitted to be `impleaded’, as one of the `Respondents’ to the main Comp. App (AT) (CH) (INS.) No. 4 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. 105 of 2023 in Comp. App (AT) (CH) (INS.) No. 4 of 2023, sans merits and it fails.

In fine, IA No. 105 of 2023 in Comp. App (AT) (CH) (INS.) No. 4 of 2023 is dismissed. No costs.