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Judgment
20.05.2025: These two appeals have been filed against the same order dated 29.04.2025 passed by Adjudicating Authority in IA. No. 233/2025 filed by the Suspended Management of the Corporate Debtor. The CIRP against the Corporate Debtor - Jaiprakash Associates Ltd. is underway. The CoC in 10th and 11th meeting has taken certain decisions. Respondent No.1, the Suspended Director, filed an IA No.233/2025 praying for different prayers, as has been extracted in Para 1 of the order. The Adjudicating Authority proceeded to hear the application and directed for issue of notice to Resolution Professional to file reply within a period of two weeks and fixed the matter to 26.05.2025 and directed that status quo be maintained till further orders. National Asset Reconstruction Company Ltd. (NARCL) which is assignee of 85% debts of the banks as well as the Resolution Professional aggrieved by the said order have come up in these appeals.
We have heard Shri Arun Kathpalai, learned senior counsel for the NARCL, Shri Gopal Jain and Shri Krishnendu Datta, learned senior counsels appearing for Resolution Professional and Shri Abhijeet Sinha, learned senior counsel appearing for the Respondent Suspended Management.
It is submitted by learned counsel for the Appellant that the Adjudicating Authority has not given any reasons in the impugned order for passing the order of status quo whereas reasons, if any, were only for issuing notice which are contained in Para 25. It is submitted that there has to be reasons for passing interim order including irreparable loss, balance of convenience and prima facie case for passing of interim order which has effect of staying the process of CIRP which is a time bound process. It is submitted that the process was undertaken as per Regulation 29 of the CIRP Regulation with respect to Jaiprakash Power Ventures Limited (JPVL) and Jaypee Fertilizers & Industries Limited.
Shri Gopal Jain, learned senior counsel submits that the Resolution Professional has issued invitation only for inviting bids for finding out/exploring the price discovery. Thus, the process under Regulation 29 has to be undertaken thereafter.
Shri Kathpalia, learned senior counsel submits that in so far as Jaiprakash Associates Ltd., there are no encumbrances and encumbrances with respect to Jaiprakash Power Ventures Limited will also be taken care after price discovery is undertaken. It is submitted that in so far as non-compliance of Regulation 28 is concerned, the intimation of assignment was given to the CoC on 19.03.2025 for reconstitution of CoC which was although with delay of two days but for Regulation 28, there was substantial compliance and no illegality can be imputed and period of two days was directory requirement.
Shri Abhijeet Sinha, learned senior counsel submits that in the application the Suspended Director has raised issues which clearly reflect the provisions of CIRP Regulations are not being followed. The Suspended Director has filed the application for appropriate direction of the Adjudicating Authority for compliance of Regulations of the CIRP Regulations.
We have considered the submissions of learned counsel for the parties and perused the record.
We notice that the Adjudicating Authority has fixed 26.05.2025 for consideration of the application. Both learned counsel for the Resolution Professional and learned counsel for the CoC submits that they shall submit their reply within two days, which may be done by the Resolution Professional as well as the CoC. The application having been fixed for 26.05.2025, we request the Adjudicating Authority to consider the application as well as the reply submitted by the Resolution Professional and CoC to take a decision with regard to further process without being influenced by any observation made in the impugned order. Looking to the facts that CIRP is a time bound process, the Adjudicating Authority shall endeavour to dispose of the application on the date fixed or as early as possible. Rejoinder, if any, may be filed by the Suspended Management before the date fixed.
We make it clear that we have not expressed any opinion on the respective submissions of the parties.