AI Structured Summary
Not yet generated for this judgment
Judgment
PER: BENCH
The present Application is filed by Vemuri Ramkoteshwar (herein after referred as ‘Applicant’) against Mr. D. Surya Ramakrishna Saibaba (herein after referred as ‘Respondent’) Under Section 141 of the Insolvency and Bankruptcy Code, 2016 r/w section 60(5) Insolvency and Bankruptcy Code, 2016 r/w Rule 11 of National company law Tribunal Rules, 2016, for seeking to permit the Applicant to travel abroad for its employment purpose after due intimation to Respondent from time to time.
It is averred that M/s. GKC Projects Limited, the Principal Borrower had availed loan facilities from various lenders. The Applicant along with other two members stood as Personal Guarantors to secure the repayment of financial assistance availed by the Principal Borrower. Due to default in payment of Rs. 825,51,94,147.02 (including a bank guarantee of Rs. 44,35,83,824/-) CIRP was initiated against the Principal Borrower.
Further, it is averred that during the CIRP, Resolution Plan was submitted by M/s. SMC Infrastructures Private limited and paid an amount of Rs. 34,28,56,360.54 and bank guarantee protection for Rs. 160,08,38,463/-.
It is averred that Financial Creditor issued a demand notice for the balance amount after the payment by Resolution Applicant and subsequently filed an application CP(IB) No. 225/95/HDB/2020 under section 95 of IBC, 2016 before this Tribunal and the Application was admitted on 30.11.2021 for Insolvency resolution process.
Further, it is averred that due to rejection of the repayment plan by the CoC during the PIRP. RP filed an Application IA no. 928 /2022 for seeking to provide liberty to Creditors to file an application under section 121-123 for initiating Bankruptcy process against the Applicant.
Subsequently, an application CP(IB) No. 23/123/HDB/2023 under section 123 of IBC, 2016 was filed before this Tribunal. It was admitted by this Tribunal on 11.12.2023 and initiated the Bankruptcy process against the Applicant.
It is averred that Respondent put up a resolution for early discharge of the Applicant from bankruptcy process as the Applicant does not have any further assets to be realized and all the liquid assets already have been realized. The CoC rejected the resolution for early discharge of Applicant.
It is averred that the Applicant has applied and attended interviews for job in Providence India Insurance Broking. Subsequently The Providence India Insurance Broking selected and sent an offer letter for the position of Vice President to the Applicant (The copy is attached as Annexure 2)
It is submitted that in the said offer letter it was required to undertake travel abroad frequently viz. various countries in North America, Europe and Asia Pacific and represent the company from time to time.
It is submitted that due to the pendency of Bankruptcy process it is required to take permission from this Authority to travel abroad and also further submitted that all the realizable assets of the Applicant are already realised and that the Applicant is ready to furnish any undertaking as required by this Authority and shall also intimate the details of travel, address to the Respondent from time to time.
Case of Respondent:
It is averred that bankruptcy process was initiated against the Applicant on 11.12.2023 and is still ongoing. Moreover, as per para 15 of the order dated 11.12.2023 by this Authority the Applicant is subjected to disqualifications and restrictions as prescribed under section 140 and 141 of the IBC, 2016.
It is averred that the offer letter dated 01.08.2024 issued to the applicant was offered for the position of “vice president – Global Market Relation” which attracts the disqualification under section 141(1)(a) of IBC, 2016 and that no document has been filed to show the offer of employment was accepted by the Applicant.
It is averred that Creditors have conducted a meeting on 20.08.2024 to discuss on the reliefs sought by Applicant and resolved to advise the lenders legal counsel as the overseas travel should be for specific period and not perpetual, full particulars of his departures, arrival travel itinerary and residence proof overseas may be provided and suitable undertaking/indemnity/surety may be provided.
In the light of the aforesaid factual matrix the point that arises for our consideration is:
Point: Whether the Applicant be permitted to travel abroad?
We have heard the learned counsel Mr. G Bhupesh, for the Applicant and Learned counsel Mr GP Yash Vardhan along with Ms Kushi singh, for Respondent and perused the record.
On perusal of the record, we observe that the Applicant received an offer letter dated 01.08.2024 from the Executive Vice President, Mr. P. Vijay Kumar of Providence India Insurance Broking Private Ltd for the position of ‘Vice president – Global market Relations’ wherein the role of the Applicant as a Vice President is to capture reinsurance market both in India and Abroad and the said role requires the Applicant to travel across various countries in North America, Europe and Asia pacific.
On bare reading of the section 141(1)(a) of IBC it is clear that a bankrupt shall not act as a director of any company and is restricted to take part in the promotion, formation or management of a company either directly or indirectly. The section 141(1)(a) of IBC, 2016 is extracted below:
“Section141. Restrictions on bankrupt. — (1) A bankrupt, from the bankruptcy commencement date, shall—
(a)not act as a director of any company, or directly or indirectly take part in or be concerned in the promotion, formation or management of a company; ….”
Relying on section 141(1)(a) of IB Code learned counsel for the Respondent would contend that in terms of position of Vice president attracts the restriction under section 141(1) (a) of IBC, 2016.
Learned counsel for the Applicant submitted that the Applicant was selected for a role of Vice president - Global market Relations which is a position for marketing of the products of the Company only and the appointment is not concerned in the promotion, formation or management of a company nor he is offered the position of Director of the Company.
Admittedly, the Applicant was selected for a position of “vice President – Global Market Relations” which is neither a position of director nor a position that would directly or indirectly involved in the promotion, formation or management of a company as mentioned under section 141(1)(a) of the IBC, 2016. The role of a Marketing personnel is quite distinguishable with those of the personnels who can be called as the Key Managerial Persons or the Directors who directly or indirectly are concerned in the promotion, formation or management of the company. Moreover, a Marketing Personnel has no role in dealing with the management of the company and is only designated to deal with the marketing strategies of a product and in this case particularly the focus of Applicant is to focus on HNIs/ Corporates and identification of Reinsurance needs of the customers. Therefore, the contention of the Respondent that a bar in terms of Section 141(1)(a) of IBC attracts the case of the Applicant is un sustainable.
It is pertinent to note that the bankruptcy process, in this case was initiated on 11.12.2023 and the Bankruptcy Trustee, wanted the CoC to discuss and approve for early discharge of the Applicant, as the Applicant does not have any further assets to be realized and all the liquid assets have already been realized.
Therefore, in the light of our discussion as above, we are of the view that, permission to travel abroad by the petitioner during the pendency of the Bankruptcy Resolution Process, exclusively for the purpose of discharging his duties and responsibilities as Vice President of the Providence India Insurance Broking, is hereby granted, subject to the following terms and conditions mentioned herein:
Applicant is entitled to travel abroad pursuant to the written order/directions/instructions of his employer namely, Providence India Insurance Broking, which order shall specifically state the place and the country to which the petitioner is required to travel in order to dischargef his functions/duties, as vice president.
The Applicant shall immediately upon receiving order/direction/instruction and before leaving for abroad, shall file an undertaking memo before this Tribunal, marking a copy of the same to the creditors, duly undertaking and declaring that;
The intended travel is pursuant to the order/directions/instructions of his employer and for the purpose of discharge of his functions as Vice President of the Providence India Insurance Broking.
The full itinerary, the contact details of the petitioner while in abroad including address, contact number, duration of the stay etc.,
Undertaking that the Applicant would not go to any other country other than the country to which he has been directed or instructed by his employer.
We make it clear that in the event of breach of any of the conditions above, the permission granted herein to travel abroad stands revoked and necessary legal action which is deemed fit and proper under these circumstances may be initiated against the Applicant.