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Judgment
PER BENCH
This is an application filed by the Resolution Professional/Chairman of the Monitoring Committee (hereinafter referred to as ‘RP’) under Section 33(3) and Section 60(5) of ‘The Insolvency and Bankruptcy Code, 2016’ (hereinafter referred to as ‘IBC’) read with Regulation 39(9) of The IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 praying this Adjudicating Authority to order liquidation of ‘M/s. Mata Energy Limited’ (hereinafter referred to as ‘Corporate Debtor’). It was submitted that the Respondent herein failed to adhere to the terms of the approved Resolution Plan and hence, it was resolved by the Monitoring Committee to Liquidate the Corporate Debtor by forfeiting the amounts paid by the Respondent till date.
According to the applicant, the Corporate Debtor was put into ‘Corporate Insolvency Resolution Process’ (hereinafter referred as ‘CIRP’) vide order dated 04.03.2022 in C.P. (IB) NO. 103/7/HDB/2020 basing on the Petition filed by the State Bank of India under Section 7 of IBC and appointed Mr. B Naga Bhushan (Applicant herein) as Interim Resolution Professional vide the same order.
It was submitted that during the first meeting which was held on 06.04.2022, the ‘Committee of Creditors’ (hereinafter referred as ‘CoC’) resolved to appoint the Applicant herein as the Resolution Professional of the Corporate Debtor.
It was further submitted that the CoC of the Corporate Debtor voted the Resolution Plan submitted by the ‘Consortium of M/s Varma Steels Private Limited and Mr AVP Varma’ (Respondent herein) with a 100% voting. Pursuant thereto, the Applicant issued a Letter of Intent to the Respondent and advised the Respondent to remit 10% of the Resolution Plan amount. The Respondent issued a Performance Bank Guarantee to the Applicant herein and accepted the Letter of Intent issued by the Applicant.
It is further submitted that, thereafter the Applicant filed I.A. No. 194/2023 on 25.01.2023 before this Adjudicating Authority for obtaining the statutory approval in terms of Section 30(6) and 31 of IBC for the Resolution Plan submitted by the Respondent (Successful Resolution Applicant) and this Adjudicating Authority vide order dated 27.02.2023 in I.A. No. 194/2023 in C.P. (IB) NO. 103/7/HDB/2020 approved the Resolution Plan submitted by the Respondent.
It is further submitted that as per the approved Resolution Plan, the Respondent was to make an upfront payment of Rs 1.82 Crores by 29.03.2023, but the same was paid by 31.03.2023. However, the CoC accepted the said delayed payment made by the Respondent. It was submitted that the final tranche payment of Rs 2.50 Crores under the Resolution Plan was to be paid by 29.08.2023 and the same has not been paid till date, contending that the land of the Corporate Debtor is under encroachment by third parties and the Dharani Portal (Online Platform for Land Records in the State of Telangana) also do not reflect the entire land covered by the Resolution Plan which was shown to be in the name of Corporate Debtor. In this regard, the stand taken by the Applicant is that in the Information Memorandum (IM) and Request For Resolution Plan (RFRP) in respect of the Corporate Debtor, in clear terms have stated that before submitting the Resolution Plan, the Prospective Resolution Applicants are to conduct their own due diligence including site inspection of the Corporate Debtor. It was submitted that at such point of time, no query in this regard was raised by the Respondent herein. It was submitted that endeavour was made by the sole Financial Creditor and the Applicant herein to protect the property from encroachments and that complaints were also made to the respective Land Revenue Officers in this regard.
It was submitted that at the instance of the Respondent herein, the Monitoring Committee has extended the timelines for making the final payment of Rs.2.50 crores but that the Respondent failed to make the payment even then. It was submitted that though there was a notice sent to the Respondent by way of an email dated 02.03.2024 in respect of the 8th Meeting of the Monitoring Committee of the Corporate Debtor to be held on 05.03.2024, the Respondent failed to attend the said meeting. It was submitted that keeping in view the non-payment of the amounts by the Respondent as per the approved Resolution Plan and the inordinate delay that took place in implementing the approved Resolution Plan, it was resolved by the Monitoring Committee in the 8th Meeting held on 05.03.2024 to cancel the approved Resolution Plan and Liquidate the Corporate Debtor.
In the above backdrop, the Applicant herein filed the present Application seeking the Liquidation of Corporate Debtor under Section 33(3) of IBC and also an order to forfeit the amounts paid by the Respondent till date.
This Adjudicating Authority vide order dated 31.05.2024 ordered for Liquidation of the Corporate Debtor. Aggrieved by the said order, the Respondent herein, being the Successful Resolution Applicant (SRA) approached the Hon’ble ‘National Company Law Appellate Tribunal, Chennai Bench’ (hereinafter referred as ‘NCLAT’) by way of an Appeal vide Company Appeal (AT) (CH) (Ins.) No. 242/2024, and the Hon’ble NCLAT vide order dated 15.07.2024 quashed the order of this Tribunal dated 31.05.2024 by ordering as below;
“In these eventualities, instead of venturing into the merits of the matter any further, exclusively on the ground that the Judgment is perverse because of the non-consideration of the pleadings, and non-reference of the name of the Appellant and considering the argument dated 02.04.2024, the Impugned Judgment would be perverse and non-sustainable in the eyes of law and the same is accordingly hereby quashed, and the matter is remitted back to the Learned Adjudicating Authority i.e., National Company Law Tribunal, Hyderabad Bench – I, to decide the matter as a fresh case after considering the respective contentions including the contention raised by the Appellant by way of counter affidavit that was filed on 01.04.2024.”
Pursuant thereto this Adjudicating Authority has once again on 09.09.2024, has taken up the matter for fresh hearing in terms of the order of the Hon’ble NCLAT, and passed the following order.
“Learned senior counsel Mr Avinash Desai along with the counsel on record Mr Sathakarni for SRA present through Video Conference.
Mr B Nagabhushan, Resolution Professional/ Chairman of Monitoring Committee present physically.
Learned Counsel Mr Ramesh Babu, for Resolution Professional present physically.
The order of this Tribunal dated 31.05.2024 has been set aside by Hon’ble NCLAT, on the grounds “Non-consideration of the pleadings and non-reference of the name of the appellant”.
It is therefore imperative on the part of this Tribunal to ensure about compliance of the order of Hon’ble NCLAT and dispose of the present application.
Learned senior counsel Mr Avinash Desai had made submissions stating that though the SRA had filed counter on 01.04.2024, the same was not considered at all by this Tribunal, while passing the order in IA No 5/2024 dated 31.05.2024. At this stage the Court officer had stated that physical copy of the counter is not filed till date as such the same cannot be traced in the record. Therefore, while giving liberty to both sides to file written submissions by 13.09.2024. For orders on 18.09.2024.”
The Respondent herein filed written submissions on 13.09.2024 enclosing the Counter Affidavit to the present Application with the same.
The Ld. Counsel for the Applicant reiterated his submissions relying on the averments as made in the application and also by contending that the said averments remain unrebutted by the respondent by not ‘filing’ any counter.
In support of the said contention Ld. Counsel relied on Rule 28 of The NCLT Rules (as clarified by the Principle Bench Vide proceedings dated 09.10.2023) and contented that mere uploading the counter in the e-portal, without filing the physical copy of the same in terms of Clause 4 of the above Rule, does not tantamount to compliance of above rule and in the case on hand the respondent merely uploaded the counter on 01.04.2024 in the e-portal and till date the respondent has not filed the physical copy of the counter as such this Adjudicating Authority rightly proceeded with the mater while passing the order dated 31.05.2024. Ld. Counsel further states that the statement made before the Hon’ble NCLAT, as recorded in the order dated 15.07.2024 that, “The Appellant and the Respondents are represented by their respective counsels. The Learned Counsel for the Appellant has submitted that (i) He had filed his Counter Affidavit in the proceedings as mentioned above before NCLT, Hyderabad, by e-filing the same on 01.04.2024 and the same was accepted on record.’’, is nothing but a deliberately made false statement before Hon’ble NCLAT.
Per Contra, the Ld. Sr. Counsel for the respondent at the outset contended that the respondent since filed its counter, this Adjudicating Authority ought to have considered the contentions raised in the counter, however allowed the application without considering the same, hence the contentions as put forth in the counter are to be considered and a fresh order on merits be passed in terms of the remand order passed by the Hon’ble NCLAT.
In order to properly appreciate the rival submission as made above, we wish to first refer to the following portion of the order of The Hon’ble NCLAT dated 15.07.2024, which is as below:
“The Appellant before this Tribunal is a Successful Resolution Applicant (SRA). In the instant Company Appeal preferred under section 61 of I & B Code, 2016, he has put a challenge to the Impugned Order dated 31.05.2024 that has been passed in IA(IBC)(Liquidation) No.5/2024 in CP(IB) No.103/7/HDB/2020. The Appellant and the Respondents are represented by their respective counsels. The Learned Counsel for the Appellant has submitted that
(i)He had filed his Counter Affidavit in the proceedings as mentioned above before NCLT, Hyderabad, by e-filing the same on 01.04.2024 and the same was accepted on record.
…………………..
The argument of the Learned Counsel for the Appellant is that, when the matter was argued on 02.04.2024, the counter affidavit filed by him was already on record and in fact he had participated in the proceedings as can be confirmed by the order sheet and that orders were reserved on 31.05.2024. But ultimately when the order was delivered on 31.05.2024, he found that it does not observe his presence and does not even take into consideration, the pleadings which have been preferred by him by way of Counter Affidavit filed before the Learned Adjudicating Authority. Accordingly, he proceeds to argue that there has been failure on part of the Learned Adjudicating Authority is not taking into consideration, the pleadings raised by the Appellant, and is not showing him as a party Respondent in the Impugned Order and the pressure of his counsel therein and this ground alone, it will render the Impugned Judgment under challenge to be perverse on account of failure to provide a reasonable effective opportunity of hearing.”(Emphasis is ours)
However, on perusal of the records in I.A. (IBC) (Liq.) NO. 5/2024 in C.P. (IB) NO. 103/7/HDB/2020 (both the e-filing and physical filing), Counter Affidavit claimed to have been filed by the respondent was not taken on record till date. Hence on inquiry, this Adjudicating Authority was informed by the Registry that two documents were e-filed on 01.04.2024 (titled as Reply and Proof-of-Service) by the Respondent, and in respect of the Reply (Counter), physical filing was not done.
Here for better understanding the facts and events relating to filing of counter by the respondent, we wish to refer to our orders dated 27.03.2024 and 01.04.2024, which are as below:
Order in IA (IBC) (Liquidation) 5/2024 dated 27.03.2024
“Mr Naga Bhushan, Resolution Professional present through Video Conference. Learned Senior Counsel Mr A Venkatesh for the counsel on record Mr Sathakarni K, for Successful Resolution Applicant present through Video Conference. Learned Counsel Mr Sathakarni K, for SRA who is present through Video Conference states that he has been instructed by the SRA to take notice on behalf of them and also copy of the application has been received. Counter should be filed on or before 01.04.2024. For hearing, matter adjourned to 02.04.2024.”
Order in IA (IBC) (Liquidation) 5/2024 dated 02.04.2024
“Mr Naga Bhushan, Resolution Professional present through Video Conference. Learned Counsel Mr Sathakarni K, for Successful Resolution Applicant present through Video Conference.
Learned Counsel Mr Ramesh Babu, for Resolution Professional present physically.
Matter passed over.
Matter called again. Heard. For orders on 31.05.2024.”
We also find it appropriate to quote Rule 28 of The National Company Law Tribunal Rules, 2016 which is as follows:
“28. Endorsement and scrutiny of petition or appeal or document.
(1)The person in charge of the filing counter shall immediately on receipt of petition or appeal or application or document affix the date stamp of Tribunal thereon and also on the additional copies of the index and return the acknowledgement to the party and he shall also affix his initials on the stamp affixed on the first page of the copies and enter the particulars of all such documents in the register after daily filing and assign a diary number which shall be entered below the date stamp and thereafter cause it to be sent for scrutiny.
(2)If, on scrutiny, the appeal or petition or application or document is found to be defective, such document shall, after notice to the party, be returned for compliance and if there is a failure to comply within seven days from the date of return, the same shall be placed before the Registrar who may pass appropriate orders.
(3)The Registrar may for sufficient cause return the said document for rectification or amendment to the party filing the same, and for this purpose may allow to the party concerned such reasonable time as he may consider necessary or extend the time for compliance.
(4)Where the party fails to take any step for the removal of the defect within the time fixed for the same, the Registrar may, for reasons to be recorded in writing, decline to register the pleading or document.”
It is also pertinent to note that Registrar of the National Company Law Tribunal, by order of the Hon’ble President NCLT, had communicated the following clarificatory order on Rule 28 of NCLT Rules to all Deputy/Assistant Registrars of NCLT Benches.
As already observed, though e-filing of the counter was done on 01.04.2024, physical filing of the counter has not been done either by 02.04.2024 or till date. According to the Registry, since no physical copy of the counter has been filed, the e-filed copy of the counter was not scrutinised and hence the same was never placed before the Bench to take the same on record.
We, therefore find force in the submission of the Ld. Counsel for the applicant that the respondent has not filed its counter either by 02.04.2024 or even till date in terms of Rule 28 of NCLT Rules, supra, as such, the submission made before the Hon’ble NCLAT, that “He had filed his Counter Affidavit in the proceedings as mentioned above before NCLT, Hyderabad, by e-filing the same on 01.04.2024 and the same was accepted on record” is a false statement made before the Hon’ble NCLAT.
It is pertinent to note that even after the directions of Hon’ble NCLAT in its order dated 15.07.2024 to decide the present Application afresh by taking the contentions of the Respondent in its Counter, the Respondent has not taken the required steps to bring the physical copy of the counter on record. Strangely, the respondent annexed a copy of the counter to the written submissions filed on 13.09.2024 i.e. post completion of the oral hearing of this application.
In view of our observations as above, the directions of the Hon’ble NCLAT to decide the present Application as a fresh case based on the contentions of the Respondent is not capable of being complied in the facts and circumstances as explained above.
Needless to say, that, in the absence of pleading, the oral submissions made and the written submissions filed on behalf of the Respondent raising counter pleas cannot be considered. Reliance in this regard can be placed on the ruling of The Hon’ble Supreme Court of India, in Bachhaj Nahar vs. Nilima Mandal & Anr, 2008 INSC 1072, wherein in para 8&9, it was held that as follows:
“8.The High Court, in this case, in its obvious zeal to cut delay and hardship that may ensue by relegating the plaintiffs to one more round of litigation, has rendered a judgment which violates several fundamental rules of civil procedure. The rules breached are:
(i)No amount of evidence can be looked into, upon a plea which was never put forward in the pleadings. A question which did arise from the pleadings and which was not the subject matter of an issue, cannot be decided by the court.
(ii)A Court cannot make out a case not pleaded. The court should confine its decision to the question raised in pleadings. Nor can it grant a relief which is not claimed and which does not flow from the facts and the cause of action alleged in the plaint.
(iii)A factual issue cannot be raised or considered for the first time in a second appeal.
Civil Procedure Code is an elaborate codification of the principles of natural justice to be applied to civil litigation. The provisions are so elaborate that many a time, fulfillment of the procedural requirements of the Code may itself contribute to delay. But any anxiety to cut the delay or further litigation, should not be a ground to 6 float the settled fundamental rules of civil procedure. Be that as it may. We will briefly set out the reasons for the aforesaid conclusions.
9.The object and purpose of pleadings and issues is to ensure that the litigants come to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. Its object is also to ensure that each side is fully alive to the questions that are likely to be raised or considered so that they may have an opportunity of placing the relevant evidence appropriate to the issues before the court for its consideration. This Court has repeatedly held that the pleadings are meant to give to each side intimation of the case of the other so that it may be met, to enable courts to determine what is really at issue between the parties, and to prevent any deviation from the course which litigation on particular causes must take.
10.The object of issues is to identify from the pleadings the questions or points required to be decided by the courts so as to enable parties to let in evidence thereon. When the facts necessary to make out a particular claim, or to seek a particular relief, are not found in the plaint, the court cannot focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue. As a result, the defendant does not get an opportunity to place the facts and contentions necessary to repudiate or challenge such a claim or relief. Therefore, the court cannot, on finding that the plaintiff has not made out the case put forth by him, grant some other relief. The question before a court is not whether there is some material on the basis of which some relief can be granted. The question is whether any relief can be granted, when the defendant had no opportunity to show that the relief proposed by the court could not be granted. When there is no prayer for a particular relief and no pleadings to support such a relief, and when defendant has no opportunity to resist or oppose such a relief, if the court considers and grants such a relief, it will lead to miscarriage of justice. Thus, it is said that no amount of evidence, on a plea that is not put forward in the pleadings, can be looked into to grant any relief.
11.The High Court has ignored the aforesaid principles relating to the object and necessity of pleadings”.
Even, assuming that the contentions put forth in the counter of the respondent can be considered, the grievance of the Respondent appears to be that the revival of the Corporate Debtor is solely dependent on the handing over of the immovable properties of the Corporate Debtor and in the absence of the same, the Resolution of Corporate Debtor cannot be done, since the major portion of the lands wherein mining permissions are available to the Corporate Debtor in respect of the entire business activities of the Corporate Debtor are encroached by third parties and the Applicant herein failed to take the control over these assets of the Corporate Debtor and handover the possession of the same to the Respondent. It was submitted that as per the approved Resolution Plan, the Corporate Debtor is to be taken over by the Respondent as a going concern along with all the assets during the implementation of the Resolution Plan.
Therefore, according to the respondent the failure of the Monitoring Committee consisting the Financial Creditor and the erstwhile Resolution Professional in handing over the immovable properties of the Corporate Debtor to the SRA, resulted in non-payment of the final tranche amount of Rs.2.50 crores and that this failure of non-implementation of the approved Resolution Plan is solely attributable to the Financial Creditor and erstwhile Resolution Professional of the Corporate Debtor.
Here we wish to refer to the Information Memorandum and Request For Resolution Plan (RFRP) issued in respect of the Corporate Debtor which are as follows: Information Memorandum dated 21st July, 2022
“10. Any Other Information
The Resolution Applicants are requested to kindly conduct their own due diligence in the following aspects pertaining to the properties of the Corporate Debtor: …………………………
•The land mortgaged to the Bank includes mining land. The Resolution Applicant is advised to make an independent assessment/enquiry submit the rules and provisions in regards to mining of the minerals/ores and usage of the mining land and also transfer of land to the Successful resolution applicant as per the provisions of IBC with the Department of Mines & Geology as well as other relevant Government departments.”
REQUEST FOR RESOLUTION PLAN (RFRP)/ PROCESS DOCUMENT
“DISCLAIMER
……………………………
Each Resolution Applicant(s) should conduct its own investigations, diligence, and analysis and should check the accuracy, adequacy, correctness, reliability and completeness of the assumptions, assessments, statements and information contained in this document and obtain independent advice from appropriate sources. ……………………..
2.2. Site Visit:
……………………….
(h)The Resolution Applicant (s) may carry out its own comprehensive due diligence in respect of the Corporate Debtor and shall be deemed to have full knowledge of the condition of the Corporate Debtor, assets, relevant documents, information, etc. whether or not the Resolution Applicant(s) actually inspects or participates in the Site Visit or verifies the documentation provided by the Resolution Professional.
(i)The Resolution Applicants shall be deemed to have conducted due diligence with respect to all aspects of the Corporate Debtor, including Site Visit, when they submit the Resolution Plan. No claims, allegations or otherwise shall be entertained by the Resolution Professional/COC on account of the Resolution Applicant (s) not taking the Site Visit.”
Thus, from the above, it is clear that the Respondent herein was put on clear notice to make an independent assessment / enquiry submit the rules and provisions in regards to mining of the minerals/ores and usage of the mining land and also transfer of land to the Successful resolution applicant as per the provisions of IBC with the Department of Mines & Geology as well as other relevant Government departments.” besides to conduct due diligence in respect of the lands of the Corporate Debtor before submitting the Resolution Plan. Moreover, the plea of ‘alleged encroachment’ over the lands of the corporate debtor has been made only when the final tranche of payment was to be made. We therefore, find the above plea of the respondent is nothing but an afterthought, hence unacceptable and untenable.
The present Application is filed under Section 33 (3) of IBC and Regulation 39(9) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which is as follows:
“Section 33 of IBC. Initiation of liquidation
(1)Where the Adjudicating Authority, --
(a)before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; or
(b)rejects the resolution plan under section 31 for the non-compliance of the requirements specified therein, it shall--
(i)pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter;
(ii)issue a public announcement stating that the corporate debtor is in liquidation; and
(iii)require such order to be sent to the authority with which the corporate debtor is registered. …………………………………
(3)Where the resolution plan approved by the Adjudicating Authority under section 31 or under sub-section (1) of section 54L, is contravened by the concerned corporate debtor, any person other than the corporate debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1)
(4)On receipt of an application under sub-section (3), if the Adjudicating Authority determines that the corporate debtor has contravened the provisions of the resolution plan, it shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1) …………………
Regulation 39(9) of The IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Approval of Resolution Plan
……………..
(9)A creditor, who is aggrieved by non-implementation of a resolution plan approved under sub-section (1) of section 31, may apply to the Adjudicating Authority for directions.”
In the 8th Meeting of Monitoring Committee of Corporate Debtor dated 05.03.2024 the following resolutions have been passed by the lone Financial Creditor for filing an application seeking liquidation of the Corporate Debtor and cancellation of the approved resolution plan:
“RESOLVED THAT the approved resolution plan of the successful Resolution Applicant viz., Verma Steels Pvt. Ltd. In consortium with Mr AVP Varma which was approved by Hon’ble NCLT vide order dt. 27.02.2023 be cancelled as the SRA has not complied with the terms of the plan by not paying the residual plan amount of Rs 2.50 crores by August 29, 2023 and that the amount of Rs 1.50 Crores paid till date be forfeited.”
“RESOLVED FURTHER THAT the Corporate Debtor may be Liquidated under Section 33(3) of IBC 2016 as the Successful Resolution Applicant has contravened the implementation of the approved resolution plan.”
“RESOLVED FURTHER THAT the performance bank guarantee for Rs 40 Lacs provided by the SRA be invoked and forfeit the amount already paid.”
“RESOLVED FURTHER THAT the Resolution Professional and Chairman of the meeting Mr. B. Naga Bhushan be and hereby authorized to make an appropriate application before the Hon’ble NCLT under section 33(3) read with Regulation 39(9) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.”
Basing on the above stated resolution, the Applicant herein filed the present application seeking Liquidation of the Corporate Debtor. We also observe that though a notice was sent, the Respondent was not present during the 8th Monitoring Committee Meeting in which the resolution for Liquidation of Corporate Debtor was passed.
In view of the above discussion, we are satisfied that it is a fit case to pass an order under section 33(3) of IBC.
In so far as the prayer (c) of this application which is to pass an order forfeiting the amounts paid by SRA till date, is concerned, we have carefully perused the RFRP and the resolution plan submitted by the Respondent and we do not find any clause or condition in these documents, which stipulate forfeiture of amount already paid by the Respondent. However, regulation 36B (4A) provides that if the resolution applicant fails to implement or contributes to the failure of implementation of the plan, the performance security shall stands forfeited. We reproduce here under Regulation 36B(4A) of The IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016:
“(4A) The request for resolution plans shall require the resolution applicant, in case its resolution plan is approved under sub-section (4) of section 30, to provide a performance security within the time specified therein and such plan, after its approval by the Adjudicating Authority, fails to implement or contributes to the failure of implementation of that plan in accordance with the terms of the plan and its implementation schedule. Explanation I - For the purposes, of this sub-regulation, “performance security” shall mean security of such nature, value, duration and source, as may be specified in the request for resolution plans with the approval of the committee, having regard to the nature of resolution plan and business of the corporate debtor. Explanation II - A performance security may be specified in absolute terms such as guarantee from a bank for Rs. X and Y years or in relation to one or more variables such as the term of the resolution plan, amount payable to creditors under the resolution plan, etc.”
In addition to the above stated provision, Para No 6 and 8 of the Letter of Intent dated 10.01.2023 which has been received and accepted by the Respondent also provides for the forfeiture of performance bank guarantee in case of failure of implementation of resolution plan or in case of any breach of the Letter of Intent.
Keeping in view, Regulation 36B (4A) of The IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and also terms contained in the letter of intent, we hereby decide that performance bank guarantee given by Respondent can be invoked and the liquidated. However, keeping in view that there are no supporting provisions in RFRP and approved resolution plan to forfeit the other instalments/amount (other than performance bank guarantee) paid by Respondent, we are of the view that the erstwhile Resolution Professional (Applicant herein) should return the amount of Rs 1.82 Crores to the Respondent.
In the above back drop, we pass the following directions: -
We allow the liquidation of M/s. Mata Energy Limited, the Corporate Debtor herein, which shall be conducted in the manner as laid down in Chapter III of Part II of the Code, 2016.
We allow invocation and forfeiture of performance bank guarantee of Rs. 40,00,000/- provided by the SRA.
We do not allow forfeiture of Rs. 1.50 Crores paid by the SRA other than the Performance Bank Guarantee and therefore resolution professional and CoC is directed to return the said amount to the SRA.
Shri Kasi Srinivas, having Registration No: IBBI/IPA-003/IPN00237/2019-2020/12840; Mobile No. 8008022887; e-mail: [email protected] ; is hereby appointed as Liquidator;
He shall issue public announcement stating that the Corporate Debtor is in liquidation in terms of Regulation 12 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016;
The moratorium declared under Section 14 of the Code shall cease to have effect from the date of the order of liquidation;
Subject to Section 52 of the Code, 2016, no suit or other legal proceedings shall be instituted by/or against the Corporate Debtor. This shall however not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
All the powers of the Board of Directors, Key Managerial Personnel and partners of the corporate Debtor shall cease to have effect and shall be vested in the Liquidator.
The Liquidator shall exercise the powers and perform duties as envisaged under Sections 35 to 50 and 52 to 54 of IBC read with The IBBI (Liquidation Process) Regulations, 2016.
Personnel connected with the Corporate Debtor shall extend all assistance and co-operation to the Liquidator as would be required for managing its affairs.
The Liquidator shall be entitled to such fees as may be specified by the Board in terms of Section 34(8) of the Code.
The applicant is directed to serve the copy of this order to Registrar of Companies, Regional Director, Official Liquidator of Hyderabad, Registered Office of the Corporate Debtor for information and compliance.