29 April 2022 7:22 AM GMT
The National Company Law Tribunal ("NCLT"), Kolkata Bench, comprising of Shri Rajasekhar V.K. (Judicial Member) and Shri Balraj Joshi (Technical Member), while adjudicating an interim application filed in Beni Gopal Singhi v EMC Ltd., has held that the Chairman of Monitoring Committee has the locus to file an application before the Adjudicating Authority to give a fresh lease of life...
The National Company Law Tribunal ("NCLT"), Kolkata Bench, comprising of Shri Rajasekhar V.K. (Judicial Member) and Shri Balraj Joshi (Technical Member), while adjudicating an interim application filed in Beni Gopal Singhi v EMC Ltd., has held that the Chairman of Monitoring Committee has the locus to file an application before the Adjudicating Authority to give a fresh lease of life to Corporate Insolvency Resolution Process ("CIRP").
The order was passed on 20.04.2022, touching upon various aspects of insolvency such as locus standi of Chairman of the Monitoring Committee, law relating to disclosure of confidential information, commencement of fresh CIRP, punishment for contravention of resolution plan, impudent affidavits filed before Adjudicating Authority and Indian judicial process being taken on a ride by Successful ResolutionApplicant. The other aspects of the Order have been dealt with in separate news articles.
Facts Of The Case
A petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC") was filed by Mr. Beni Gopal Singhi ("Operational Creditor") against EMC Limited ("Corporate Debtor") before the NCLT, Kolkata Bench ("Adjudicating Authority"). On 12.11.2018 the Corporate Debtor was admitted into CIRP. After deliberations, the resolution plan of Almas Global Opportunity Fund SPC ("Successful Resolution Applicant"/"SRA"), a Segregated Portfolio Company (SPC) incorporated in the Cayman Islands, was approved by the Committee of Creditors (CoC) with 80.18% votes. The Plan was also approved by the Adjudicating Authority on 21.10.2019. Following which, the CoC was dissolved and a Monitoring Committee was appointed to supervise the implementation of the Resolution Plan.
The SRA failed to implement the Plan as per the stipulated timelines. Therefore, on 23.11.2020 the Chairman of the Monitoring Committee moved an application under Section 60(5) of the IBC before the Adjudicating Authority, seeking cancellation of the Resolution Plan of the SRA and commencement of fresh CIRP. The application was opposed by the SRA on the point that the Chairman of Monitoring Committee has no locus to file the same.
Decision Of The Adjudicating Authority
The Adjudicating Authority held that under Section 33(3) of the IBC, in the event of contravention of the Resolution Plan, 'any person' other than the Corporate Debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order. It was emphasized that the use of the phrase 'any person other than the Corporate Debtor' clearly indicates the will of the legislature that except the Corporate Debtor itself, any person whose interests are being prejudicially affected from the breach of the Resolution Plan could file the application for liquidation.
It was further observed that if the SRA fails to implement the Plan within a stipulated time, it is the Monitoring Committee's duty to ensure that the interests of the stakeholders are safeguarded. The Bench held that the Chairman of the Monitoring Committee is in the best possible position to determine whether there has been a contravention of the approved Resolution Plan, therefore, it has locus to maintain the present application, with or without a resolution to this effect being passed by the Monitoring Committee.
Case title: Beni Gopal Singhi v EMC Limited, CP (IB) No.1237/KB/2018.
Counsel for Applicant: Sr. Adv. Mr. Joy Saha, Adv. Pratik Mukhopadhyay, Adv. Saptarishi Mandal.
Counsel for Respondent: Sr. Adv. Ratnanko Banerji, Adv. Soorjya Ganguli, Adv. Ms. Shreya Choudhary.
Click Here To Read/Download Order