Allegation Of Fraud In Appointment Of IRP As RP Is No Ground For Rejection Of Resolution Plan Under Section 30(2)(e): NCLT Mumbai
LIVELAW NEWS NETWORK
24 May 2023 7:00 AM GMT
The National Company Law Tribunal, Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), while adjudicating an application under Section 60(5) of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in Mr. Amit Sangal vs Prince MFG Industries Private Limited has held that the ground that the IRP had filed false and...
The National Company Law Tribunal, Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), while adjudicating an application under Section 60(5) of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in Mr. Amit Sangal vs Prince MFG Industries Private Limited has held that the ground that the IRP had filed false and fabricated documents to show himself appointed as the RP is no legal ground to reject the Resolution Plan under section 30(2)(3) of IBC, 2016
Background Facts
It was contended by Amit Sangal (“Operational Creditor”) that the Resolution Professional (“RP”) had committed fraud and perjury and thus must be punished in accordance with the law. It was contended that the IRP had not been appointed as the RP in the first meeting of the Committee of Creditors (“CoC”) but the RP intentionally filed false and fabricated documents of showing himself as an appointed RP of Prince MFG Industries Private Limited (“Corporate Debtor”). It was contended that the Resolution Plan approved by the CoC needs to be rejected as the RP obtained all orders by playing fraud and submitting false documents.
On the contrary, it was contended by the RP that the contentions of the Operational Creditor were based on the documents which the Operational Creditor did not have legal access to. It was further contended that the grounds of fraud cannot be the basis of rejection of Resolution Plan under section 30(2)(e) of IBC, 2016.
Findings of the Tribunal
It was observed by the Tribunal that the objection of the Operational Creditor related to a matter occurring much before the issuance of FORM G. Thus these grounds cannot be considered for rejection of Resolution Plan under section 30(2)(e) of IBC, 2016. The legal implementation of the Resolution Plan was not impacted by the Corporate Insolvency Resolution Process followed in the First CoC meeting.
It was further observed that in relation to the misconduct of the RP, the appropriate authority to deal with the matter is IBBI.
With the aforesaid observations, the Tribunal dismissed the petition.
Case:
Mr. Amit Sangal vs Prince MFG Industries Private Limited
Case No.
IA/3525/2022 In CP(IB)934/MB/2020
Counsels for the Applicants
Adv. Adv. Shreyashi Panda
Counsel for the Respondent
Resolution Professional, Mr. Kairav Anil Trivedi (In Person)
