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Judgment
02.05.2025 Heard Learned Counsel for the Appellant as well as the Learned Counsel appearing for the Respondent.
This Appeal has been filed by Suspended Director challenging order dated 27.02.2025 by which I.A. No. 955/2025 filed by the Appellant has been rejected.
The Appellant is Suspended Director of the Corporate Debtor who file the I.A. making following prayer:
“IA-955/2025:
The prayer made in the captioned application reads thus:
"a. Allow the present Application, and
b. Direct the Respondents to provide relevant documents/Resolution Plan and allow the applicant to participate in discussion and deliberation on Resolution Plan in the ongoingCIRP of the Corporate Debtor, and/or;
c. Exclude the time period from 8th CoC meeting held on 21.01.2025 till the disposal of this Application and/or;
d. Pass any other orders in favor of the Applicant to secure the ends of justice.”
The Adjudicating Authority rejected the Application, in para 2 has made following observations:
“….
2.Having referred to the judgment of Hon'ble Supreme Court in Vijay Kr. Jain vs. Standard Chartered Bank &Ors. (Civil Appeal No. 8430 of 2018). The Ld. Counsel for the Applicant submitted that the Applicant being Suspended Director to Corporate Debtor is entitled to resolution plan. Mr. Sumant Batra, Ld. Counsel for the Resolution Professional opposed the prayer by espousing that Mr. Jaspreet through whom SRA, J.M. Hydraulics Solution Pvt. Ltd had submitted the resolution plan had furnished forged bank guarantee. According to him, Mr. Jaspreet is nephew of Mr. Joginder, who has sought to submit a resolution plan. In his submission, the present Applicant namely Hardeep Singh is also uncle (Mama) of Jaspreet. According to Mr. Batra, the Applicant is not entitled to copy of resolution plan for the simple reason that their relative Mr. Jaspreet has already committed forgery qua the present process. He also opposed the prayer for supply of copy of resolution plan to the Applicants i.e. the Suspended Directors also on the ground that his brother namely Mr. Joginger has also sought to submit a resolution plan and his nephew, Mr. Jaspreet, who committed forgery was SRA previously. To buttress his plea, Mr. Sumant Batra relied upon the judgment of Hon'ble NCLAT of Company Appeal (AT) (Insolvency) NO. 1906 of 2024, Yashdeep Sharma vs. Tara Chand Meenia, Resolution Professional &Ors. Para-17 of the judgment reads thus:
"At this juncture, we would like to add that we have no quarrelwith the proposition of law laid down by the Hon’ble Apex Court in Vijay Kumar Jain supra that the suspended management has a right to participate in the CoC meetings and entered to documents including resolution plan since Regulation of CIRP Regulations recognizes the vital interest of the suspended management in a resolution plan. This judgment of the Hon’ble Supreme Court which has been relied upon by the Appellant is however not applicable in the facts of the present case since here in light of the distinguishing fact that suspended management had also staked their claim as a Resolution Applicant. In the present case, when it is an admitted fact that the Appellant was also a competing Resolution Applicant, no copy of the resolution plan of other PRAs could have been shared in advance with the Appellant as it would have triggered conflict of interest. Even though the resolution plan of the Appellant had been rejected, since the Appellant was admittedly in the fray until 22.05.2024, it cannot be ruled out that an element of bias would arise while considering the resolution plan of another competing Resolution Applicant.”
Learned Counsel for the Appellant challenging the order submits that Appellant, a suspended director was entitled to participate in all meeting of the Committee of Creditors and was also entitled for copy of resolution plan, which in spite of email sent to the RP was not provided, hence, breach was committed by the RP. In view of the judgment of Hon’ble Supreme Court in Vijay Kumar Jain vs. Standard Chartered Bank and Ors. (Civil Appeal No. 8430 of 2018), Appellant was entitled for the copy.
Mr. Sumant Batra, appearing for the RP submits that after receiving the email from the Appellant. A reply was sent on 04.02.2025, asking the Appellant to give undertaking that neither the Appellant nor any of related party will submit a resolution plan. It is submitted by RP that no undertaking was given by the Appellant, hence plan was not provided to the Appellant.
It is further submitted by Mr. Batra that brother of Appellant Joginder Singh has expressed intention to submit a plan and he was also allowed to submit a plan, which could not be submitted and ultimately I.A. for seeking a direction has been rejected and Company Appeal filed by Joginder Singh being Company Appeal (AT) (Insolvency) No. 619 of 2025 has also been dismissed by order of the court today.
We have considered submission of Counsel for the parties and perused the record.
The Appellant as a Suspended Director was entitled to participate in meeting of the Committee of Creditor. The question as to whether he was entitled for copy of resolution plan needs to be answered which is the issue raised in the present appeal.
The Learned Counsel for the RP has referred to the email dated 04.02.2025, which was sent to the Appellant, which is as follows:
“Hardeep Singh From: Debashis Nanda <[email protected]> Sent: Tuesday, February 4, 2025 6:11 PM To: [email protected] Cc: SBI STRESSED ASSETS MANAGEMENT BRANCH DELHI (50950); AGMCL5 50950; BIFR Section; ARM-II BRANCH DELHI; [email protected]; JSSI.ACCOUNTS; [email protected]; Sanjay Sharma Subject: Re: Notice of the 11th Meeting of the Committee of Creditors in the matter of JSSI Hydraulics Private Limited Dear Sir, Please refer to our email dated 25th January 2025, sent at 09:05 PM, wherein the RP had categorically mentioned why you should not be present during the Committee of Creditors (CoC) meetings when the resolution plans submitted by other resolution applicants are being opened. In that email, it was also clearly mentioned that you could be provided a copy of the resolution plan, or witness opening of the plan of other PRAs subject to submitting an undertaking that neither you nor any of your related party will submit a resolution plan. As of today, we have not received any such undertaking from your side. Hope this addresses your concern. On Tue, Feb 4, 2025 at 5:33 PM Hardeep Singh <[email protected]> wrote: Subject: Unlawful Actions During the 11th CoC Meeting-04.02.2025”
The present is a case, the brother of the Appellant Joginder Singh has expressed intention to submit a plan who was also allowed time to file a plan by 03.02.2025, which we have noticed in the Company Appeal (AT) (Insolvency) No. 619 of 2025 decided today. When the brother of the Appellant was submitting a plan, the RP was well within his rights to ask the Appellant to give undertaking that neither the Appellant nor any of related party shall submit the resolution plan.
Giving the resolution plan to Appellant who was suspended director when his brother was intending to file resolution plan would have been opening the all relevant facts and the copy of the resolution plan. Hence, we are of the view that RP was right in asking the undertaking which was never given by the Appellant.
The Adjudicating Authority has considered the submissions of the Appellant and has not committed any error in rejecting the I.A. No. 955/2025. We do not find any merit in this Appeal. Appeal is dismissed.