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Judgment
ORDER
Per: Manoj Kumar Dubey, Member (Technical)
The present Petition has been filed on 11.04.2023 u/s 60(5) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘IBC/Code’) r/w Rule 11 of the National Company Law Tribunal Rules,2016 by M/s.South Teckpark LLP (hereinafter referred to as ‘Impleading Applicant’) with a prayer to permit the applicant who holds 20.41% of shares in the Corporate Debtor to implead and come on record as a party in the main petition CP IB 97 OF 2022.
Brief facts of the application are given hereunder:
The impleading applicant is a registered Limited Liability Partnership which involved in the business of real estate development holds 20.41% of shares in the Respondent No 2.
The initial partners of the impleading applicant included (i)Mr.Ravindra Panemangalore Pai,(ii) Mr. Ashwin Panemangalore Pai,(iii) Dr.Panemangalore Dayanand Pai (iv) Mr.Panemangalore Satish Pai (hereinafter referred as “initial partners’).It is stated that initial partners and other persons by name Sri Dharmesh Ranka and Late Sri.Dinesh Ranka who deceased on 20.07.2022, wherein each of them hold 6.33% shareholding in Respondent no 2 Company, had jointly owned lands totally measuring about 63 acres 37 1/2 guntas in several survey numbers at Agara Village and Jakkasandra Village, Begur Hobli Bangalore South Taluk (hereinafter “the said lands”) through certain entities created/ incorporated by them, namely M/s Soumya Enterprises & Finance,M/s Chandrika Development and Investment,M/s Bharani Investments and Promoters,M/s Tara Builders & Developers,Township Creators Pvt.Ltd,Akshay Property Developers Pvt Ltd,M/s Ajantha Housing & Finance Company, M/s Anurag Builders & Developers as well as M/s Ramya Housing Development Company. The said lands held them as a composite block with the common object of commercially exploiting it as a single block of land.
It is stated that the initial partners, Sri Dharmesh Ranka and the deceased Sri Dinesh Ranka were keen to develop an extent of 63 acres 37 ½ guntas by eatablishing a software park/ integrated infrastructure to realize its commercial value, accordingly they proposed the said project at the Global Investors Meet(GIM) organised by the Government of Karnataka and the said project is sanctioned by the Government of Karnataka under an Order bearing No.CI.97 SPI 2000 dated 6.07.2000.
On December 2003, the initial partners, Sri Dharmesh Ranka and the deceased Sri Dinesh Ranka incorporated a special purpose entity called ‘Manipal ETA Infotech Limited’ (presently the respondent no 2 herein).
During early 2004, initial parties along with Sri.Dharmesh Ranka and the deceased Sri.Dinesh Ranka were considering collaboration with reputed builders for undertaking the construction of the said project, Mr,Sushil P.Mantri, the Managing Director and two other directors of the Mantri Developers(P) Ltd who were known to Pai Group, approached them and offered to develop the said property, several meetings were held between them and they discussed all the terms and conditions of the proposal to develop the said property.
The Mantri Group resorted to indiscriminate borrowings from various financial institutions by entering into agreements, which were absolutely unilateral and adverse to the interest of the impleading applicant, including Pai Group and the execution of the project on the said property.
It is stated that the Respondent no 2 due to mismanagement by the Mantri Group was involved in litigation due to non- compliance of various laws and the National Green Tribunal (NGT) vide its order dated 04.05.2016 had completely stalled the project envisaged by the parties aforesaid. During the period from 2014 to 2019 there were no development activities due to the order passed by NGT. However, the Petitioner in collusion with the Mantri Group sanctioned a loan for construction purposes on 29.01.2018 on a stalled project when the NGT order was in force.
It is stated that the Respondent no 2 Company was used by the Respondent no 1 and the Mantri Group to route money with an intention to evergreen the loan taken by Mantri Developers (P) Ltd of Mantri Group.
The loan sanctioned has the approval of the Respondent Company No.2 through its General Meeting and none of such approvals have been made involving the impleading applicant or other members of Pai Group.The Mantri Developers (P) Ltd has illegally and without any authorization entered into a Memorandum of Understanding dated 06.01.2020 (MOU) with M/s Prestige City Properties, agreed to assign all its rights to assign under the Shareholders Agreement and have received huge sums of money without the knowledge of Pai Group only to service the loan illegally sanctioned by the Respondent no 1.
The actions of the Respondent no 1 and Mantri Group is clearly prejudicial to the interest of the impleading applicant and Pai Group. Accordingly this application has been filed to impead the applicant in the main petition i.e., CP (IB) No.97 of 2022.
The respondent no 1/Financial Creditor has filed its reply vide diary no 2832 dated 31.05.2023 and submitted that the Applicant has no locus to approach this Adjudicating Authority seeking impleadment in the CP (IB) NO.97 of 2022 as it is a settled law that no person who is not a party to the main petition, such as Applicant herein, claim a right to be heard in a pre-admission stage of a petition under Section 7 of the Code, 2016. To support this contention, the Financial Creditor/Respondent No 1 has placed reliance on following the citations :(i) DEB Kumar Majumder and Ors v. State Bank of India and Ors 2019 SCC Online NCLAT 26,(ii)Vekas Kumar Garg v.DMI Finance Pvt Ltd and Anr 2021 SCC Online NCLAT 72,(iii)Prayag Polytech Pvt Ltd v. Hind Tradex Ltd 2019 SCC Online NCLAT 1029, (iv)Axis Bank Ltd v.Lotus Three Developments Ltd and Ors 2018 SCC Online NCLAT 914,(v) Nirej Vadakkedathu Paul and Ors v.Sunstar Hotels and Estates Pvt Ltd and Anr 2023 SCC Online NCLAT 102.
Heard Learned Counsel for the Petitioner and , learned Senior Counsel for the Respondent and perused the pleadings on record.
We observe that in an application filed under Section 7 of the Code,2016 the Applicant Financial Creditor and the Corporate Debtor alone are the necessary parties. In the pre-admission stage is only required to satisfy the requirements under section 7 i.e., there being Financial debt and default on the part of the Corporate Debtor. Hence there is no requirement for impleading application of any other party before admission of an application under section 7 of the Code, 2016. The judgement cited by the Financial Creditor as mentioned above also make the extant provisions of law clear on this matter.
In view of the aforesaid facts and circumstances, IA 353 OF 2023 stands dismissed.