Vitol S.A. vs Mr. Abhishek Nagori & Ors.

[Per; Shreesha Merla, Member (T)]

Aggrieved by the Order dated 29.05.2020 passed by the Learned Adjudicating Authority (National Company Law Tribunal, Indore Bench at Ahmedabad, Court – I), in I.A. – 212/2019 in I.A. 458/2018 in TP 161/2019 in CP (IB) 19 of 2017, preferred by M/s. Vitol S.A. seeking to intervene in the proceedings filed by the Liquidator of the ‘Corporate Debtor’ vide I.A.458/2018, which was filed by the Liquidator seeking clarification as to whether he is allowed to scrutinise and investigate the transactions executed by the Directors of the ‘Corporate Debtor’ beyond two years prior to the date of ICD and also to see the relevant documents from the Promoters. Learned Adjudicating Authority, by the Impugned Order dated 29.05.2020 rejected the prayer for impleadment on the ground that there was no provision in the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as ‘The Code’) that enabled ‘Operational Creditors’ other than those who trigger the CIRP to be impleaded as parties and the same was already decided by the Adjudicating Authority vide Order dated 06.11.2017 in I.A.230/2017.

It is the case of the Appellant/Applicant that there is an established case of fraud committed by the suspended Board of Directors of the ‘Corporate Debtor’ and placed reliance on the International Arbitration Award dated 11.01.2011 against the ‘Corporate Debtor’ which was made enforceable by the Hon’ble Bombay High Court vide Order dated 15.09.2014. It is also submitted that by Order dated 29.09.2016, the Division Bench of the Hon’ble Bombay High Court upheld the Order of the Single Bench holding that the ‘Corporate Debtor’ has indulged in Fraudulent Transaction of his business undertakings to defeat the Rights of Creditors. Learned Counsel argued that this is further supplemented by the findings of the Interim Forensic Report prepared by M/s. KPMG, the Forensic Auditors. It is argued that the Appellant is a proper and necessary party as it has a vested right in the present proceedings being the single largest Creditor of the ‘Corporate Debtor’. The Appellant has complete knowledge of all the Fraudulent activities committed by the ‘Corporate Debtor’ and hence their impleadment is absolutely necessary.

Learned Counsel for the Director Mr. Amardeep Singh Bhatia vehemently argued that Vitol S.A. is a necessary party nor proper party and that the submissions made by them in their Application have no bearing on the issues raised in this Appeal and that there is no provision in the Code that enables the Creditors other than those who trigger the CIRP to be impleaded as a party and therefore the Adjudicating Authority has rightly rejected their Application.

Learned Counsel for the Appellant/Applicant relied upon the following Judgements in support of his contentions:

Respondents 3, 4, 6 & 8 have also submitted that the Hon’ble Supreme Court in a catena of judgements has laid down that at an Interlocutory Stage, no such relief shall be granted beyond the scope of the main suit.

It is significant to mention that the execution of an Arbitral Award passed in favour of Vitol S.A. by the Hon’ble Bombay High Court, has been challenged and is pending before the Hon’ble Supreme Court by way of Civil Appeal No. 5694/2018.

We do not find any illegality in the observation of the Learned Adjudicating Authority that there is no provision in the Code, with respect to impleadment of any Creditor apart from the Creditors who have triggered the CIRP. Needless to ad, the Appellant is at liberty to pursue other legal remedies, if so advised.

For all the aforenoted reasons, we do not find it a fit case to discuss the elaborate Judgements filed by the Counsel for the Appellant in support of his argument regarding ‘fraud’ and ‘forgery’. For the ongoing reasons, this Appeal is dismissed accordingly. No Order as to costs.