Nipun Gupta vs Praveen Bansal

Justice Rakesh Kumar Jain:

This appeal is directed against the order dated 04.07.2022, passed by the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench) by which an application bearing I.A.(IBC)/339/KB/2022 filed by the present Appellant in CP No. (IB) 522/KB/2018 has been dismissed.

Shorn of unnecessary details, the facts given to us in the Court are that an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short ‘Code’) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short ‘Rules’) was filed by the State Bank of India as a lead bank in the consortium of Central Bank of India and Canara Bank for an amount of Rs. 151,19,70,185.24/- which includes principal sum and interest at the contractual rate as on 31.12.2017. The application was filed against the Silverton Spinners Limited, Kolkata (Corporate Debtor). The application was admitted on 08.11.2019 and Praveen Bansal was appointed as Interim Resolution Professional (IRP) and later on confirmed as Resolution Professional (RP). The order of admission was challenged by the Suspended Directors by way of an appeal bearing CA (AT) (Ins) No. 1378 of 2019. In the said appeal, an interim order was passed on 29.11.2019 to the effect that “Interim Resolution Professional is directed not to constitute Committee of Creditors, till next date of hearing, if not yet constituted”. However, the aforesaid appeal was finally dismissed on 20.09.2021 with the following two orders “(i) there is no substance in the appeal, the appeal is dismissed. (ii) Interim order passed in this appeal dated 29.11.2019 does not survive. The period from 29.11.2019 till today will be excluded for the purpose of Section 12 of IBC”

According to the Appellant, 1st meeting of the CoC was held on 07.10.2021. Thereafter, Form G was issued on 31.10.2021 followed by Form A dated 11.11.2021. The Expression of Interest (EOI) was given by the Appellant on 12.11.2021, which was acknowledged by the RP on 19.11.2021. Provisional list of Prospective Resolution Applicants (PRA) was released on 26.11.2021 with the Appellant being the sole PRA. It is submitted that Information Memorandum (IM) was given on 03.12.2021 and information from the Virtual Data Room (VDR) of the Corporate Debtor was shared on 10.12.2021. Counsel for the Appellant has submitted that after receipt of the information from the VDR, they wrote to the RP on 27.12.2021 that information is deficient and is not inconformity with Regulation 36 of CIRP Regulations. 2016. However, it is admitted that the last date for submission of plan was 31.12.2021. The RP himself extended the period by three days for submission of resolution plan on 03.01.2022.

On the other hand, Counsel appearing on behalf of the RP has submitted that the period was extended till 30.01.2022, however, it is an admitted fact that the 4th meeting of CoC took place on 07.02.2022 in which decision was taken for initiation of liquidation of the Corporate Debtor. Counsel for the RP has submitted that on 15.03.2022, the Appellant requested for refund of earnest money paid on the ground that they are no more interested in the process. The RP, vide its email dated 06.04.2022, informed the Appellant that the earnest money has been refunded on 04.04.2022 and reference of transaction was also given. It is submitted that despite that on 05.04.2022, the present application bearing I.A. No. 339/KB/2022 came to be filed by the Appellant in which prayers were made for seeking permission to submit their resolution plan within 15 days, extension of 90 days and exclusion of some period from the CIRP period so that their resolution plan can be considered by the CoC.

We have given all these facts because of the reasons that these facts have not been noticed by the Adjudicating Authority in the impugned order. The application bearing I.A. No. 339/KB/2022 has simply been dismissed by the Adjudicating Authority on the ground that it is misconceived because the application for extension of time could have been filed only by the RP and not by the Appellant (PRA). It is also noticed that even Counsel for the Appellant did not put in appearance but in later part of the impugned order it is observed that while the order was being dictated, the Counsel for the appellant put in appearance.

In the backdrop of aforesaid facts and circumstances, Counsel for the Appellant has submitted that though the application for extension of period of 90 days might not have been within the purview of Appellant but the Appellant could have asked for the permission of Adjudicating Authority to submit the resolution plan within 15 days which could have been decided by giving reasons. It is further submitted that the Appellant was though available at the time of hearing but because of technical hitch his voice was not audible to the bench as it was virtual hearing but once he was connected with the hearing then opportunity should have been given to him at least to explain the facts of the case.

On the other hand, Counsel for the Respondent has submitted that there is no error in the impugned order because the period of extension is not within the domain of the Appellant to seek and if the Appellant himself did not choose to appear when the matter was being heard, there was no option for the Adjudicating Authority but to pass the order.

It is further submitted that the Appellant had deposited the participation money of Rs. 5 Lacs as a prospective resolution applicant which was withdrawn by them on 15.03.2022 on the ground that they are no more interested in the process and the said money was refunded on 04.04.2022, whereas the Application was filed on 05.04.2022. It is thus submitted that once the participation money was withdrawn and the Appellant himself alleged that they have no interest in the resolution process, the Application at their instance filed on 05.04.2022 was totally misconceived and has rightly been dismissed.

We have heard Counsel for the parties and perused the record with their able assistance.

There is no disputed about the facts mentioned hereinabove. The precise question is as to whether the application, dismissed by the Adjudicating Authority was maintainable even for seeking permission to submit resolution plan within 15 days after withdrawing from the resolution process?

In this regard, we may refer to email dated 15.03.2022 sent by the Appellant and email dated 06.04.2022 sent by the Corporate Debtor which are reproduced as under:

“From: Nipun Gupta nipungupta@gmail.com

Sent: Tuesday, March 15, 2022 1:00Pm

To: Silverton Spinners silverton.spinners@pbinsolvency.com

Subject: Re: Extension of last date for submission of resolution plan

Dear Sir,

Pls. refund our amount of earnest money paid, since we are now not interested in the process.

Thanks

Nipun gupta”

“From: Silverton Spinners silverton.spinners@pbinsolvnecy.com

Sent: Wednesday, April 6, 2022 03:19:06 PM

To: Nipun Gupta nipungupta@hotmail.com

Subject: Re: Extension of last date for submission of Resolution Plan

Dear Sir,

This is to inform you that your participation money deposit has been refunded on 04.04.2022.

The reference number of the transaction is 1496681949.

Let us know in case of any queries.

Tanks and Regards

Adv. Gauri Sharan”

Once,  the  Appellant  himself  showed  their  disinclination  in  the resolution process and requested for the refund of earnest money as back on 15.03.2022 and the same was returned on 04.04.2022 as has been mentioned in the email dated 06.04.2022, it does not lie in their mouth to seek further extension of time of 15 days to submit the resolution plan as they were no more part of the process.

Thus, in our considered opinion, there is no merit in this appeal and the same is thus dismissed. No costs.