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Judgment
ORDER
These are two Company Appeals which had been preferred under Section 61 of Insolvency and Bankruptcy Code, 2016, the stage and circumstances at which both the Appeals are being been considered by this Tribunal, it happens to be similar. Hence, they are being decided together.
In Company Appeal (AT)(CH)(Ins) No.14 of 2024, challenges the order dated 29.11.2023, as it was passed by the Adjudicating Authority being the National Company Law Tribunal, Chennai, whereby the ‘Appellants’ IA/IBC/828/2023 as preferred in CP/1006/IB/2018 was dismissed, consequently it had been held that the shareholders lack locus standi to maintain the proceedings, and has observed that the locus standi to challenge an action or an order in a proceedings of liquidation would lie with the Directors, since the shareholders are excluded from agitating or participation or voting in the CoC, as they are represented in the proceedings only through Directors, at the most they can agitate their grievances only through Directors. As a result of the Impugned Order under challenge, the consequential effect was that the Appellants application as preferred under Section 60(5)of the Insolvency and Bankruptcy Code, 2016 seeking the following reliefs:
(i)pass an order thereby directing the first Respondent Resolution Professional to exclude the amount of interest claimed by the Respondents 2 & 3 towards the outstanding dues of the Corporate Debtor for the period of 01.06.1999 to 31.12.2016 as the Corporate Debtor was a sick undertaking and proceedings were pending BIFR as the contract stood suspended under Section 22 of SICA and consequently declare that the amount claimed by the Financial Creditors before the RP with usurious rate of interest is not valid;
(ii)Pass an order thereby directing the first Respondent Resolution Professional to exclude claim of the fourth Respondent IARC from the list of Financial Creditors of the Corporate Debtor and consequently directing her to declare the fresh list of the Financial Creditors with their revised percent of voting rights in the CoC and for further other reliefs.
(iii)Pass such further or other orders as this Hon’ble Tribunal may deem fit and proper to grant to the Applicants such further relief in the circumstances of this case and in the interest of justice and thus render justice.” has been rejected to be granted by the Adjudicating Authority, on the pretext that in the light of the ratio propounded by the Hon’ble Apex Court dealing, with the limited rights which the shareholders have in the affairs of the Company. It has been found that the founding principles the shareholders will have no locus to challenge the decision of an approval of the Resolution Plan.
In the connected Company Appeal (AT)(CH)(Ins) No.14 of 2014 K. Narayanasamy vs Karthiga, it puts challenge to the order of 29th November 2023, as it was rendered by the Learned Adjudicating Authority being the National Company Law Tribunal, Chennai Bench where Appellants Application being IA/IBC/828/2023 in CP/1006/IB/2018 which was dismissed on the same principles as to what foundational right under the Insolvency and Bankruptcy Code, 2016, the shareholder would have to agitate a cause as against the Resolution Plan, either upon its acceptance or rejections. This Appeal two is almost foundationed on the same ratio based upon the precedence laid down by the Hon’ble Apex Court, wherein it has been propagated that the shareholders have no locus to challenge the approval of the Resolution Plan as they are only marginal investors in the Company it will amount to disturbing very foundational principles of the Insolvency and bankruptcy Code and more particularly when as already observed above their interest is being safeguarded by the Committee of Creditors and the Resolution Professional.
But, during the course of argument, we have been faced with a new fact, it has been as pointed out by the Respondent’s Counsel, who had contended, that for all judicial purposes this Company Appeals have been rendered infructuous. Because of the fact that he submitted that the Resolution Plan, as it was submitted, has already been approved on 20th March 2024 and the aspect of approval of Resolution Plan is apparent owing to the inputs provided by Respondent Counsel and particularly because of the fact that its approval is an aspect, which has not been denied by the Learned Counsel for the Appellant. The Learned Counsel for the Appellant had pressed upon that merely granting an approval of the Resolution Plan on 20th March 2024, cannot be taken as a ground to not to venture on the issue as raised in the instant Company Petitions, but owing to the very vitality of the matter, since the Resolution Plan as of now has been approved and the same has to be only executed in accordance with the provisions of the Insolvency and Bankruptcy Code, for all practical purposes the instant Company Appeals, where the challenge has been given to the Impugned Order of rejecting the application as against the approval of the Resolution Plan by the Shareholders, apart from the fact it was not maintainable in the light of the Judgment of the Hon’ble Apex Court as referred to Para 44 of the Judgment as rendered in the matters of Dr. Ravishankar Vedham vs Tiffin Battys Asbestos and Co. Ltd. (supra) which in turn was based upon the Judgment Arun Kumar Jagatranak V Jimble Steels and Power. Ltd. as reported in 2021, based on the aspect of sustaining the proceedings at the behest of the shareholders the status which the Appellants enjoy as on date, apart from the fact that the Appeal will not be tenable at their behest, but couple with the fact that since now the Resolution Plan has already been approved and the proceedings insolvency has reached to a much advanced stage. No legal purpose would be solved to adjudicate the appeals on its merit due to the subsequent approval of the Resolution Plan, no lis as of now survives and that too at the behest of the shareholders, consequently the Company Appeals lacks merit and the same is accordingly dismissed.