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Judgment
O R D E R
07.09.2022: Heard Counsel for the parties. This appeal has been filed against the order dated 24.03.2022 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai, Court No. V) in I.A. No. 1729 of 2021 read with I.A. No. 13 of 2022.
I.A. No. 1729 of 2021 was filed by Resolution Professional, seeking adjudication of claim of ‘Umesh Suppliers Pvt. Ltd.’ (Appellant herein). Following prayers were made in the application:
“a. The Hon’ble Adjudicating Authority be pleased to examine the contents of the present Application, the claims submitted by the Respondent No. 1 USPL, the reports submitted by Mr. Vivek Thar, Thar and Company, the explanations and documents submitted by Respondent Nos. 1 and 4 and/ or call for any other relevant information as may be necessary to determine the status of the claim of Respondent No. 1 USPL in relation to the Corporate Insolvency Resolution Process of the Corporate Debtor Ahinsa Buildtech Pvt. Ltd. and after examining the same be pleased to issue appropriate directions to the Applicant with regards to the treatment of the said claim;”
I.A. No. 13 of 2022 was filed by the Appellant where following prayers have been made:
“a. That this Hon’ble Tribunal be pleased to direct Respondent to admit the Applicant’s Claim amounting Rs. 24,50,00,000/- as a Financial Debt in the CIRP of the Corporate Debtor and the Applicant be granted recognition as a Home Buyer/ Financial Creditor of the Corporate Debtor;
b. that pending the hearing and final disposal of this Application, this Hon’ble Tribunal be pleased to order and restrain the Respondent and COC from accepting any Resolution Plan and/or approve liquidation and/or stay the CIRP process of the Corporate Debtor;
c. that pending the hearing and final disposal of this Application, this Hon’ble Tribunal be pleased to order and direct Respondent to update the Information Memorandum/ List of Creditors/ Data Room etc. so as to reflect the Applicant’s Claim amounting Rs. 24,50,00,000/- as a Financial Debt in the CIRP of the Corporate Debtor and the Applicant as a Home Buyer/ Financial Creditor of the Corporate Debtor
d. that pending the hearing and final disposal of this Application, this Hon’ble Tribunal be pleased to order and direct the Respondent to provide the Applicant with copies of all minutes of the COC Meetings of the Corporate Debtor; and
e. That this Hon’ble Tribunal be pleased to pass such and other further orders as this Hon’ble Tribunal may deem fit and proper.”
Both the applications by the impugned order have been disposed of. By disposing of I.A. No. 1729 of 2021 Adjudicating Authority has issued direction that ‘Umesh Suppliers Pvt. Ltd.’ is a related party.
Mr. Arun Kathpalia, Learned Senior Counsel for the Appellant challenging the order contends that although the order runs in 22 paragraphs, no reasons have been recorded to hold the Appellants as a related party and I.A. No. 13 of 2022 has been dismissed. Mr. Arun Kathpalia, Learned Senior Counsel for the Appellant submits that firstly the Resolution Professional ought not to have filed the application invoking any advisory jurisdiction of the Adjudicating Authority.
Resolution Professional having admitted the claim of the Appellant there was no occasion to ask for any adjudication by the Adjudicating Authority.
He further submits that in any view of the matter the Adjudicating Authority has not given any reason or any consideration of any of the materials which were on the record while deciding both the applications. He submits that only conclusions has been given in para 21 of the order which conclusions have been arrived at without adverting to any materials on the record including the transaction audit report which contained so many caveats in the report itself.
The submission of the Appellant is that the financial debt was owed to the Corporate Debtor on account of amount of Rs. 24.5 crores which was issued for purposes of issuing convertible debentures which was never issued to the Appellant and in view of which subsequently the allotment letters were issued for flats.
He submits that the nature of the claim of the Appellant has not been considered by the Adjudicating Authority nor any reasons have been given as to why the Appellant has been held to be related party.
Counsel for the Respondent submits that although there are no detailed reasons in the order but there was relevant materials on the record to indicate that Appellant cannot be accepted as a Home Buyer and further he was a related party.
Para 21 of the order records following:
“Given the conspectus of the facts and law placed for consideration before us namely the transaction audit report, which indicate that Umesh Suppliers Pvt. Ltd. is a related party to the Corporate Debtor and the letter dated 15.06.2010 issued by Umesh Suppliers Pvt. Ltd. which clearly indicates that an amount of Rs. 20 crores was paid towards Optionally Compulsory Debentures and an amount of further would be paid is Rs. 30 crores towards the said Orbit Residency Park, this Bench has no hesitation to conclude that Umesh Suppliers Pvt. Ltd. is a related party and that the amounts lent by Umesh Suppliers Pvt. Ltd. is to be considered as “other debt”.”
After having considered the respective submission of the counsel for the parties and after going into the orders passed by Adjudicating Authority, we are of the view that there are no reasons for the conclusion arrived in Para 21 & 22 by the Adjudicating Authority.
There has been no consideration of the nature of the claim of the Appellant nor any reasons have been given as to why the Appellant has been treated as a related party.
Although Ld. Counsels for the parties have also tried to advance their submissions on merits but in view of the fact that Adjudicating Authority has not given any reasons and has passed an order without consideration of relevant materials, we are of the view that ends of justice be served in remitting the matter to the Adjudicating Authority for passing a fresh order on both the applications I.A. No. 1729 of 2021 and I.A. No. 13 of 2022.
We make it clear that we are not expressing any opinion on merits of the either of the party and it is for the Adjudicating Authority to consider and pass a fresh order on both these applications in accordance with law.
While entertaining this Appeal we had passed interim order on 17.05.2022 which order is to the following:
“Issue notice. Shri Arun Kathpalia, learned counsel appearing for the Appellant submits that the amount paid by the Appellant is not an issue and on the finding by the Adjudicating Authority that Appellant is a related party, his claim has been put as “other debt”. He submits that the consequence of the order is that he will lose his right on 27 flats for which advance amount was taken.
Learned counsel for the Home Buyers oppose the submission of counsel for the Appellant and submits that Appellant being a related party was not eligible to be allotted any flats, hence, the order passed by the Adjudicating Authority is correct and based on forensic reports which were relied by the Adjudicating Authority.
Learned counsel appearing for the Successful Resolution Applicant submits that the plan is under implementation. He submits that as per the plan if any allottee makes payments which are liable to be made then only claim for allotment can be considered.
The issue in this Appeal is as to whether the Appellant is allotee of 27 flats as against which advance payments were made, needs further consideration. However we permit the Appellant to make payment of balance amount as per the plan after due intimation by the Resolution Applicant, which shall be kept in a separate account by the Respondent and allotment to any other person shall not be made in respect to those 27 flats, for which appropriate decision shall be taken at the time of final disposal of the Appeal.
Respondents may file their Reply within two weeks. Rejoinder be filed within two weeks thereafter. List this Appeal on 11.07.2022.”
The protection which was granted to the Appellant shall continue till both the aforesaid I.A.s are disposed of. Looking to the nature of issue in these applications, we are of the view that plan being under implementation, the Adjudicating Authority shall endeavour to dispose of the applications as early as possible. In result, the impugned order dated 24.03.2022 is set aside and the appeal is disposed of with the directions as above.