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Judgment
ORDER
18.01.2022: The Instant Appeal has been filed on behalf of the Appellant being aggrieved and dissatisfied by the Order dated 27.02.2020 passed by the Learned Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad, Court- 2) in IA 168 of 2020 in C.P. (IB) No. 53/ NCLT/ AHM/ 2017. Whereby, the application was filed by the Applicant under Section 60(5) of the Insolvency & Bankruptcy Code, 2016 and the Learned Adjudication Authority had passed the following order :-
“Learned Lawyer appearing on behalf of the liquidator is present and fairly submitted that the claim of Applicant to the tune of Rs. 6,87,63,879/- has already been admitted. Hence, nothing remains in the instant application. However, with regard to the prayer B, the Applicant has prayed for direction upon the liquidator to disburse the above said amount within 30 days from the date of adjudication. The instant prayer is totally vague. Otherwise also the Applicant will get amount only after adjudication and in waterfall mechanism as prescribed under Section 53 of the IB Code. In view of the above observation, the instant application stands disposed-off.”
The Instant Appeal was filed on 17.06.2021 and thereafter on 06.07.2021 Learned Counsel for the Respondent No. 1 & 2 had appeared and waive Notices and they were directed to file Reply Affidavit and the matter was directed to be listed on 09.08.2021.
On 09.08.2021 Learned Counsel for the Respondent No. 1 was directed to file hard copy of short affidavit. On 20.07.2021 Respondent No. 1 had filed an Affidavit indicating stage of the liquidation process as liquidation process was commenced on 24.04.2021. In Para 19 of the Affidavit, it was submitted that the liquidation process is still continuing and the Liquidator is making all the efforts to complete the same.
The matter was again listed on 17.09.2021 and the matter was adjourned to 24.11.2021 because the Learned Senior Counsel for the Appellant Mr. Pradeep Rai was having some personal difficulty. The matter was listed on 24.11.2021 and Learned Proxy Counsel for the Appellant prayed for a short adjournment because the Learned Senior Counsel Mr. Pradeep Rai was having some personal difficulty and the matter was adjourned to 10.12.2021.
On 10.12.2021 when the case was called out Learned Proxy Counsel for the Appellant again prayed for a short adjournment but by way of last chance this matter was adjourned to 18.01.2022 i.e. today.
Heard Learned Counsel for the Appellant. He submitted that although the Impugned Order was passed on 27.02.2020 but the claim amount was received much earlier. So, a prayer was made to direct the liquidator to release the admitted claim amount of Appellant in the interest of justice and equity.
Further, Learned Counsel for the Respondent No. 1 filed an Affidavit, wherein, it was submitted that the Appellant who is an operational creditor of the Corporate Debtor is attempting to receive its admitted claim in priority over and above the other creditors of the Corporate Debtor by way of the present Appeal. The relief sought in the Appeal under reply i.e. payment to the Appellant in preference over other creditors is clearly impermissible under the provisions of the Code.
It was further submitted that Regulation 42 of the Liquidation Regulations lays down the manner in which distribution of the proceeds from the sale of the liquidation assets has to be done by the Liquidator.
Learned Counsel for the Respondent No. 2 stated in his Reply Affidavit that during October 2019 to August 2020, the Respondent No. 2 conducted five (5) e-auction processes for the sale of the assets of the Corporate Debtor. However, the all the e-auction processes failed, and Respondent No. 2 was able to sell only two flats of the Corporate Debtor by way of these e-auction processes.
It was further stated in the Affidavit that whatever sale proceeds realised from the sale of the assets of the Corporate Debtor have been distributed among the workmen and financial creditors as per section 53 of the Code. It is pertinent to state that any distribution of the sale proceeds has to be in compliance of the waterfall mechanism under section 53 of the Code.
After hearing both the parties and going through the pleadings, we do not find any irregularities in the Impugned Order and there is no merit in the Appeal. The Impugned Order dated 27.02.2020 passed by Learned Adjudicating Authority is hereby affirmed and there is no merit in this Appeal. Hench, the Appeal is accordingly dismissed.
The Registry is directed to upload this Order on the website of this Appellate Tribunal.
Registry is directed to send a copy of the Order to the National Company Law Tribunal, Ahmedabad Bench.