Manoj Kumar Mishra vs Atul Dattatray Banginwar

Kuldip Kumar Kareer, Member (Judicial))

The above captioned I.A. 1807 of 2022 is filed by Mr. Manoj Kumar Mishra, Resolution Professional of Trimurti Foodtech Pvt. Ltd. under Section 60(5) of the Insolvency and Bankruptcy Code 2016 (“Code”) seeking following reliefs:

a. To be pleased to declare the MSME Registration by the Respondent as null, illegitimate and void ab initio.

b. To grant an appropriate punishment and penalty on the Respondent for using illegitimate means to pass out as a Prospective Resolution Applicant, for violating the Moratorium Period and for attempting to usurp the powers granted by the Hon’ble tribunal to the Applicant.

c. To pass such other or further order, as this Hon’ble Tribunal may deem fit in the facts and circumstances of the case and in the interest of justice and equity.

The Applicant submits that the present application is filed by the Resolution Professional of Trimurti Foodtech Pvt. Ltd. ("the Corporate Debtor") who was appointed as the Interim Resolution Professional (IRP) vide order dated 11.08.2021 and consequently, regularised as the Resolution Professional (RP) in the 4th Meeting of the Committee of Creditors (CoC) dated 22.02.20222. Thereafter the Applicant carried out the CIRP of the Corporate Debtor as prescribed in the Insolvency and Bankruptcy Code, 2016 and received Resolution Plans.

The first Resolution Plan was received from Mr. Jitendra Bhandari, a prospective Resolution Applicant, who had deposited an amount of Rs. 3 Crores and followed the necessary due diligences. Another Resolution Plan was received from Mr. Atul Banginwar ("the Respondent") and four other Co-Applicants through email and by hard copy on 22.05.2022 and 24.05.2022 respectively and had neither followed the prescribed time limit of the Expression of Interest nor any compliances. Due to which, Mr. Atul Banginwar was not selected as the Prospective Resolution Applicant.

Thereafter, on the insistence of the CoC to evaluate the two resolution plan including that of the Respondent, in its 8th COC Meeting, the Applicant opened both the Resolution Plans and came to know that the Respondent being the suspended director of the Corporate Debtor had wrongfully and illegally registered the Corporate Debtor as an MSME on 21.05.2022 i.e. during the Corporate Insolvency Resolution Process (CIRP), without the knowledge of the Applicant to evade the ineligibilities of Section 29A of the Code.

Subsequent to the above, the CoC in its 9th Meeting, authorised the Applicant to make an application against the Respondent that the MSME Registration is the clear violation of the moratorium period which began from 11.08.2021.

Hence this Petition, to declare the MSME Registration on 21.05.2022 as null and void.

Findings:-

Heard the Counsel appearing for the Applicant and perused the records.

The Bench is of the considered view that, on 11.08.2021, Trimurti Foodtech Pvt. Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) by this Bench under Section 7 of the Insolvency and Bankruptcy Code 2016, and Mr. Manoj Kumar Mishra, was appointed as Interim Resolution Professional(“IRP”), Hence the moratorium period began from 11.08.2021.

On the initiation of the moratorium period, the IPR or RP steps in the shoes of the Management and the management of the Corporate Debtor remains suspended during the CIRP and the Resolution Professional takes over the management of the Corporate Debtor on “as is” basis. However, in the present case the Suspended director, Mr. Atul Dattatray Banginwar of the Corporate Director, without the knowledge of the Applicant had registered the Corporate Debtor as MSME on 21.05.2022 i.e. during the CIRP period which is clear violation of Section 14 of the Code and the same cannot be considered as the act of management of the Corporate Debtor since the director of the suspended Board of Directors were not competent to carry out the management of the Corporate Debtor during the Moratorium Period. The registration of the Corporate Debtor on MSME seems to have been done to avoid the rigors of Section 29-A of the Code and to qualify the suspended Board of Directors to submit a resolution plan. In these circumstances it has to be held that the respondent has illegally got the Corporate Debtor registered as MSME and the registration is liable to be set aside.

Accordingly, IA 1807/2022, is allowed and disposed of with an order that the MSME registration of the Corporate Debtor is illegal and is hereby set aside. A copy this order to be sent to the registering authority of MSME for compliance of this order.