Saurabh Kumar Tikmani Vs

Bhaskara Pantula Mohan, Actg. President

This is an application filed under Rule 16(d) of the NCLT Rules, 2016 filed by the common Resolution professional appointed in both C.P. (IB) 923 of 2020 pending before Bench II of NCLT Mumbai and CP (IB) 1056 of 2020 pending before Bench IV of NCLT Mumbai with the following prayers:

(a)  "Pass order (s) and/ or direction (s) for transfer, listing and hearing of C.P. (IB)923 of 2020 alongwith its connected matters/applications and C.P. (IB)1056 of 2020 alongwith its connected matters/applications by one and same bench of NCLT Mumbai; and

(b)  Pass such other and further necessary orders that this Hon 'ble Tribunal may deem fir and necessary. "

The facts in brief are that separate Corporate Insolvency Resolution Process for the two promoter group entities (i) Talkwalkars Healthclubs Limited (Corporate Debtor-1) and (ii) Talkwalkars Better Value Fitness limited (Corporate Debtor-2) was initiated on 11.01.201 r/w corrigendum Order 18.01.2021 and 09.03.21 respectively by different benches of NCLT, Mumbai i.e., Bench IV and Bench-II in the Company Petitions as stated above; both being filed by the Financial Creditor viz., Axis Bank (Financial Creditor). It is stated that the Corporate Debtors 1 and 2 are public listed companies engaged in gym/fitness and wellness industry. The NCLT Mumbai approved vide Order dated 21.12.2017 the Scheme of Arrangement between the Corporate Debtors.

The reason given by the Applicant for transfer is that the Financial Creditor to both the companies initiated Corporate Insolvency Resolution Process. Both the companies being operationally internlinked therefore, common Interim Resolution Professional was proposed for synchronizing, value maximization of the resolution process. The Applicant has stated Operational interlinkages are as under:

(i)  Eight properties which are owned by Corporate Debtor-2 at various locations such as Mumbai, Kolkata etc are utilized by the Corporate Debtor-1 for gym operations(although the commercial arrangement between the two in relation has expired)

(ii)  Corporate Debtor-2 used to predominantly operate out of the gyms run by the Corporate Debtor-1.

(iii)  Some of the assets owned by Corporate Debtor-2 are being utilized by the Corporate Debtor-1 at various locations.

(iv)  There are common stakeholders involved in both the Corporate Debtors.

(v)  The Term Loan Agreements of Corporate Debtor-2 were assigned to Corporate Debtor-1 as part of demerger.

(vi)  Both the Corporate Debtors continue to be inter-dependent on each other for their business.

Further, it is stated it is difficult for the Resolution Professional to demarcate and ascertain the assets and liabilities as the Demerger was not implemented properly. Due to the lack of clarity there is intermingling of assets which makes it difficult to ascertain the ownership of assets of the Corporate Debtors and transfer them to prospective Resolution Applicant during the resolution Process. Further, the basis for bifurcation of revenue between the two entities has not been provided by the suspended Board of Directors till date thus RP was constrained to file application under Section 19(2) of IBC seeking effective cooperation from the common pool of suspended Board of Directors and erstwhile promoters of both the Corporate Debtors. It also stated that the Committee of Creditors of both the Corporate Debtors have a significant number of common members/creditors (i.e., more than 66%) and hence, it is imperative that CIRP in both the matters are consolidated.

It is further submitted that both the matters be heard by one and same Bench for facilitating the hearing and to avoid conflicting Orders and also to consolidate the matter which may not be possible without being heard by one and same Bench.

In view of the facts and circumstances of this case, it is directed to transfer C.P. (IB) 923 of 2020 pending before Bench-II of NCLT Mumbai to Bench- IV of NCLT Mumbai for the sake of transparency and for effective adjudication. It is further directed that all connected applications in C.P. (IB) 923 of 2020 be heard by Court IV of NCLT Mumbai. The Court II of NCLT Mumbai bench is directed to transfer all the files concerning the aforesaid cases to Court IV of NCLT Mumbai at the earliest.

Accordingly, this transfer petition is allowed and stands disposed off.