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Judgment
ORDER
As Per Mr. Deep Chandra Joshi, Member (Judicial)
This Interlocutory Application (‘IA’) bearing the IA No. 642/JPR/2022 is filed by Expo India International through its proprietor Mr. Shubham Yadav (‘Applicant’) under Section 60(5)(c) of Insolvency and Bankruptcy Code, 2016 (the ‘IBC’/ ‘Code’) for seeking directions to the Resolution Professional (‘Respondent’) of the Corporate Debtor to consider and accept the Applicant’s Expression of Interest (‘EOI’), include the Applicant in the list of prospective resolution applicants and further permit the Applicant to submit a resolution plan.
This Adjudicating Authority vide order dated 25.05.2022 commenced the Corporate Insolvency Resolution Process (‘CIRP’) of M/s V.R. Trading Co. under section 9 of the Insolvency and Bankruptcy Code (‘IBC’) and Mr. Arun Chadha has been appointed as Interim Resolution Professional (‘IRP’) thereafter a resolution has been passed to replace the IRP and appoint Mr. Vikram Bajaj Respondent herein appoint as Resolution Professional (‘RP’). Copy of the order dated 25.05.2022 is annexed as Annexure A-1 of the Application.
The Applicant has moved the present Application on the following set of facts:
The Applicant submits that an email dated 12.07.2022 has been sent to the IRP of the Corporate Debtor, expressing its interest in submitting a Resolution Plan and enquiring about the process and timelines for submitting the same. However, no revert has been received in response to the above-stated e-mail. Copy of the e-mail dated 12.07.2022 annexed as Annexure A-4 of the Application.
It is pertinent to note that in the meantime the IRP got replaced by another RP vide order dated 01.09. 2022. Subsequently, the Applicant has written a fresh e-mail dated 22.09.2022 to the Respondent for submitting its EOI and consequently a Resolution Plan. Copy of e-mail dated 22.09.2022 annexed as Annexure A-6 of the Application.
Thereafter the Respondent issued a public announcement under Regulation 36A(1) of the Insolvency and Bankruptcy Board of India Regulation, 2016 for inviting expressions of interest from interested and prospective resolution applicants. As per the public announcement, the last date for submission of EOI was 19.10.2022. Copy of public announcement annexed as Annexure A-7 of the Application.
Further the Respondent sent an e-mail dated 07.11.2022 wherein it is informed that a claim of Rs. 34,75,034/- (Rupees Thirty-Four Lakh Seventy-Five Thousand Thirty-Four Only) has been verified and provisionally admitted as operational debt. The Applicant submits that the said e-mail was sent to the Corporate Debtor after the issuance of the public announcement and even after the expiration of the deadline to submit an EOI i.e., 19.10.2022.
The Applicant submits that as per Regulation 36A, a claim has to be verified and admitted or rejected prior to the preparation of an information memorandum. The Applicant still has not received any information from the Respondent later the Applicant addressed another e-mail dated 21.11.2022 requesting to submit a resolution plan and the Respondent in revert it is said that the deadline for filing EOI has expired on 19.10.2022. Copy of the emails are annexed as Annexure A-10 and A-11 respectively.
Additionally, the Applicant relied on the following judgments:
I. Swiss Ribbons (P) Ltd. vs Union of India (2019) 4 SCC 17,
II. Essar Steel India Ltd. Committee of Creditors Vs Satish Kumar Gupta, (2020) 8 SCC 531
III. Punjab National Bank Vs Bhushan Power and Steel Ltd. 2018 SCC Online NCLT 3245
IV. Andhra Bank Vs Orcale Home Textile Ltd. 2019 SCC Online NCLT 3677
V. ICICI Bank Limited & Ors. Vs Unimark Remedies Ltd. 2018 SCC Online NCLT 31710
The Respondent filed its reply, vide Diary No. 18/2023 dated 04.01.2023, stating the following:
The Respondent submitted that Form-G has been published on 04.10.2022 for inviting expressions of interest from the prospective resolution applicant and the same is placed on the website of IBBI.
Further, the Respondent issued a final list of prospective resolution applicants on 31.10.2022. Resultantly the Respondent has received four (4) resolution plans and the same is deliberated and considered by the Committee of Creditor (‘COC’)
It is pertinent to note that the Applicant has not submitted his EOI in response to Form G published by the Respondent for the purpose of inviting expression of interest in order to submit the Resolution Plan. The Form-G has been published at the following places:
I. -Website of Insolvency and Bankruptcy Board of India
II. English & Vernacular Language Newspaper
The Respondent submits that in terms of Regulation 36A (5), the interested applicants are required to submit their expression of interest within the timeline prescribed under CIRP Regulation if any EOI is received after the timeline prescribed in Form-G is liable to be rejected.
The Applicant has failed to submit the EOI in terms of Form G. Further the Respondent submits that ignorance of the law is no excuse. In this regard, the Respondent relied on the Judgement passed by the Hon’ble Supreme Court in the matter of State of A.P. v. Twin City Jewellers Assn., (2005) 13 SCC 552, wherein it is held that ignorance of law is no excuse.
The Respondent submits that the Applicant is well aware of the fact that CIRP is initiated against the Corporate Debtor as the Applicant filed the claim before the IRP. Therefore, the Applicant at such a belated stage cannot come when the resolution plan has already been received.
The Respondent state that the Applicant has no Locus Standi to file the present Application as the Applicant has no vested right in the CIRP of the Corporate Debtor. Further the Respondent has relied upon the judgements of the Hon’ble NCLAT in the matter of IMR Metallurgical Resources AG Vs Ferro Alloys Corporation Limited & Ors. Company Appeal (AT) (Insolvency) No. 272 of 2020 and Interups Inc. vs Kuldeep Kumar Bassi, Company Appeal (AT) (Ins.) No. 1079 of 2022.
The Respondent further submits that the Applicant cannot plead ignorance of the law as entire details for submitting EOI were duly provided in Form-G. The Applicant has failed to provide any reason for not submitting EOI. The details for submitting the resolution plan will only be provided only if Applicant has submitted the EOI in terms of the timelines mentioned under the Regulations.
The Respondent submits that in terms of Regulation 36A(5), interested applicants are required to submit their EOI in terms of timelines prescribed in Regulation 36A (5) of the CIRP Regulation, 2016 and in terms of Regulation 36A(6) EOI if any received after the timelines prescribed in Form G is liable to be rejected.
The Respondent has filed its written submission vide Diary No. 185/2023 dated 19.01.2023 reiterating the same as mentioned in the reply. Additionally, the Respondent has relied on the judgement of Hon’ble NCLAT in the matter of KL Rathi Steels Limited Vs Mr. Ajit Kumar Jha, Resolution Professional, Company Appeal (AT)(Ins.) No. 592 of 2022.
We have closely gone through the facts of the case, documents placed on record before us, submissions made and arguments advanced we find that the RP in accordance with Regulation 36A of IBBI (Insolvency Regulation Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) published public announcement dated 04.10.2022 inviting Prospective Resolution Applicants (PRAs) to express their interest in submitting the Resolution Plan. The said public announcement contemplated 19.10.2022 as the cut-off date for submission of EOI.
In the present case the issue for consideration before us is whether the EOI can be considered at the belated stage once the last date for submission of the EOI has expired. To arrive at a definite and conclusive answer, we refer to Regulation 36A of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 (‘Regulation’) which deals with the methodology for Invitation for EOI.
As per Regulation 36A (6) the EOIs received after the time specified in the invitation under Clause (b) of sub-regulation (3) shall be rejected. The relevant portion of Regulation 36A is reproduced below:
“36A (1)…….
(3)The Form G in the Schedule shall –
(a)state where the detailed invitation for expression of interest can be downloaded or obtained from, as the case may be; and
(b)provide the last date for submission of expression of interest which shall not be less than fifteen days from the date of issue of the detailed invitation. ……..
(6)The expression of interest received after the time specified in the invitation under clause (b) of sub-regulation (3) shall be rejected.”
In the instant case, the Form-G for inviting EOI has been published on 04.10.2022 and is widely publicized at the following places:
I. Website of Insolvency and Bankruptcy Board of India
II. English Newspaper-Indian Express
III. Local Newspaper in Vernacular Language-Punjab Kesari
Further the Respondent submitted that pursuant to the publication of Form-G, Nine (9) prospective applicants expressed their interest. The respondent has received four (4) Resolution Plans which are being deliberated and considered by the Committee of Creditors.
Adherence to the specified timeline for resolution is the essence of the Code. In the present case, the last date for submission of EOI was 19.10.2022. The Applicant was afforded an equal opportunity to submit an EOI and Resolution Plan within the timeline prescribed under Form G whereas the same was not done. The Applicant has failed to provide any sufficient cause for delay in submitting its EOI.
The Applicant failed to abide by the prescribed timelines for submission of EOI. Therefore, we are not inclined to interfere in the procedure adopted by the Resolution Professional.
It is clarified that in case any of the four (4) resolution plans which are under consideration before the CoC are not affirmed, the process of inviting EOI under Regulation 36A shall be initiated afresh and the Applicant herein is at liberty to file its EOI before the Resolution Professional within the prescribed timeline.
In view of the foregoing, the Application preferred by the Applicant is rejected.