Dr. Goli Nagasaina Rao vs M/s. Mangalagiri Textile Mills Private Limited & Anr.

This company appeal has been preferred by the suspended director of M/s. Mangalagiri Textile Mills Private Limited, wherein the Appellant has challenged the proceedings under Section 7 of the I & B Code, 2016, which stood initiated at the behest of the State Bank of India, the Financial Creditor, by filing the company petition on 30.05.2022, before the Ld. NCLT, Amaravati, on the ground that there was a defaulted amount of payment which was required to be paid, which was said to be outstanding to the tune of Rs 31,85,80,393.72/- (Rupees Thirty One crore Eighty Five Lakhs Eighty Thousand Three Hundred And Ninety Three And Seventy Two Paise only) as on 30.04.2022.

As a consequence of the aforesaid motion, the company petition was allowed, consequent to which the CIRP proceedings was directed to be commenced and an IRP was appointed to undertake the process. When the company appeal was taken up at the admission stage, we had issued notices to the Respondents for filing the Counter Affidavit, and the company appeal remained pending as such ever since then.

Today, when the matter was taken up, a joint statement was made by the Ld. Counsels for the Parties, and particularly the Appellant himself, that subsequent to passing of the impugned order dated 25.07.2024, which is under challenge in the instant Company Appeal, the Appellant himself has submitted his resolution plan before the Resolution Professional. This, itself establishes that he has accepted the propriety of the impugned order dated 25.07.2024. The said fact of the Appellant having submitted the plan is a fact which is not disputed by the Ld. Counsels for the Respondents.

Owing to the fact that the parties are agreeable to the aforesaid fact and since admittedly the Appellant has already submitted the resolution plan to be considered by the Committee of Creditors (CoC) after the Corporate Debtor was placed under the CIRP, for all practical purposes, according to the Ld. Counsel for the Parties, the company appeal challenging admission of Section 7 application and commencement of CIRP proceedings does not survive to be adjudicated on merits. It goes without saying that whatsoever consequences are drawn from the plan submitted by the Appellant, that will have its own recourses to be resorted to in accordance with law.

The 'company appeal' would accordingly stand 'dismissed' as having rendered 'infructuous'.