Mr. Joseph Jayananda vs Mr. Rosy Rego
IA No. 371 of 2022 C.P. (IB)No.324/BB/2019
Facts:
1.Company Petition No. 324/BB/2019 was filed by Respondent No.2 (Operational Creditor) for initiating CIRP against the Corporate Debtor under Section 9 and CIRP was initiated by this Tribunal vide order dated 29.05.2020.
2.Upon the public announcement of Form G for invitation of expression of interest, Respondent No.4 had submitted the Resolution Plan along with the Affidavit under section 29A to Respondent No.1. Further, in the 8th Meeting of the CoC of the Corporate Debtor held on 20.02.2021, the Resolution Plan submitted by Respondent No. 4 was approved by 99.95% majority with Respondent No.2 carrying the voting share of 91.78%.
3.Application is filed inter alia seeking to set aside I.A 297 of 2021 filed by the Resolution Professional of the Corporate Debtor for approval of the Resolution Plan and to invite fresh Applicants for submitting the Resolution Plan of the Corporate Debtor.
Issue: Whether the application can be allowed?
Arguments:
Applicant:
1.Counsel submitted that Respondent No.3, who in addition to being the Director of the Resolution Applicant was also the person responsible for the day-to day affairs and management of the corporate debtor when the CIRP of the corporate debtor was initiated. Respondent No.3 along with Respondent No. 2 were alleged of concealing facts causing for initiation of CIRP by this Tribunal. Moreover, the name of Respondent No. 2, “Navalmar (UK) Limited” resembles very closely to name of Resolution Applicant Company “M/s Navalmaruk Services India Private Limited
2.Cousnel submitted that respondent No. 3 was appointed as the Director of Resolution Applicant on 14.09.2018 and was also the erstwhile Director on the Board of Corporate Debtor from 18.03.2022 to 01.04.2019. it is submitted that Respondent No. 3 was the Director and also the part of management and control of both the Corporate Debtor as well as Respondent No.4 at the same time, from 14.09.2018 to 01.04.2019, and falls within the ambit of the definition of “connected person”.
3.Counsel stated that as per Section 29-A(g) of IBC, Respondent No. 4 is disqualified to proposed a Resolution Plan as Respondent No. 3 was responsible for all the decisions in respect of affairs of the Corporate Debtor including the alleged fraudulent and undervalued transactions that took place during his tenure as a Director of the Corporate Debtor
Respondent:
1.Counsel submitted that application was filed more than a year and half after the resolution plan was approved by the CoC with no explanation whatsoever for such enormous delay. Moreover, applicant No. 2 attended the CoC meeting held on 20.02.2021 and did not raise any objections to the resolution plan at any prior point of time or even during the said meeting.
2.It was also submitted that Respondent No. 3 is not disqualified in terms of the conditions laid down under Section 29A(a) to (i) of the Code and hence, the disqualification under Section 29A(j) of the Code would not be applicable to the Respondent No.4. Counsel for Respondent No. 3 and 4 have filed their objections inter alia submitting that the Resolution Plan along with affidavit 29A filed by Respondent No. 4 was approved by CoC as provided under the Code, thus the CoC has applied its Commercial wisdom for approval of the Plan. Moreover, although Respondent No. 3 was the Director of the Corporate Debtor, he was not responsible for the affairs of the Corporate Debtor.
Decision: NCLT dismissed the application.
Rationale:
1.NCLT noted that as per Master data of Respondent No. 3 wherein it is observed that Mr. Andrea Colombo, Respondent No. 3 was the director of “Navalmar Shipping (India) Private Limited”, the Corporate Debtor and Navalmaruk Services India Private Limited, the Resolution Applicant during the same period.
2.It held that the Respondent No.3 was the Director of the Corporate Debtor for more than 17 years from 18.03.2002 to
01.04.2019 and this petition was filed on 19.08.2019 i.e., merely 4 ½ months after he left the Directorship of the Corporate Debtor. It is contended by the Applicant that this was the period during which the default took place on the part of the corporate debtor and he was also responsible for the day to day running of the affairs of the corporate Debtor.
3.It held that Respondent No.3 was appointed as a Director of the Resolution Applicant on 14.09.2018 when he was still continuing as a Director of the Corporate Debtor upto 01.04.2019. Therefore, necessarily the Resolution Applicant being the Respondent No.4 is to be treated as a related party of the Corporate Debtor having common directors for a considerable period of time.
4.It held that as per the provisions of Section 29A of the Code, specifically under Regulation 36 A (8) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016, it was the responsibility of the Resolution Profession (‘RP’) to conduct the due diligence and file the report in order to satisfy that the Prospective Resolution Applicant complied with the provisions of the Section 29A of the IBC, apart from the other conditions mentioned in Reg.36A(8).
Order:
