1. The instant application is filed by the Applicant under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 read with Section 424 of the Companies Act read with Rule 11 of the NCLT Rules, 2016 for seeking necessary directions from Adjudicating Authority.
2. The fact of the case is that CP(IB) No. 04 of 2017 was filed by Gujarat Oleo Chem Ltd. under Section 10 of IBC (hereinafter referred to as "the Code") read with Rule 7 of the Insolvency and Bankruptcy Rules, 2016 (hereinafter referred to as "the Rules"). The said petition was admitted on 13.04.2017.
3. It is submitted that the Applicant being a Board constituted by the Government of India under the provisions of the Technology Development Board Act, 1995 for assisting and disbursing loan to the Companies/Organisations engaged in development and commercialization of indigenous technologies and adaptation of imported technologies for wider domestic applications.
4. It is further submitted that for the recovery of loan given by the Applicant to the company under liquidation, the matter was referred to Arbitrator, wherein vide award dated 20.02.2013, the Hon'ble Arbitral Tribunal awarded an amount of Rs. 10,73,15,150/- along with interest at 15% in case of default payable w.e.f. 28.04.2009.
5. It is further submitted that in pursuance to the order dated 13.04.2017 passed in CP(IB) No. 04 of 2017, the Adjudicating Authority appointed Mr. Rakesh Chaturvedi as IRP and was continued as RP.
6. It is submitted that, on constitution of the CoC, the Applicant lodged his claim, wherein, the Applicant was part of the same having 14.54% of voting share in 4th CoC meeting of 19.09.2017.
7. It is further submitted that the Liquidation order was passed on 17.01.2018 and the Respondent No. 1, Mr. Anil Goel was appointed as liquidator. It is further submitted that the Corporate Debtor i.e. GOCL filed a complaint against the National India Assurance (NIA) for rejecting their insurance claim before the National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred as "NCDRC") in the year 2007 for an amount of Rs. 5.21 Crores, wherein, the Applicant is the beneficiary in respect of the said Insurance Policy along with other Respondent Nos. 3, 4 and 6. The said application was disposed of by National Consumer Disputes Redressal Commission (hereinafter referred to as "NCDRC") directing the Respondent Insurance Company to deposit an amount of Rs. 2,43,06,000/- along with interest @ 10% from 01.02.2006 with the Registry of Hon'ble NCDRC as an interim measure, which is required to be released on furnishing adequate security by the Complainant.
8. It is further submitted that, subsequently Andhra Bank filed an application in the month of July 2008, seeking its impleadment and a direction that the amount should be released to it as beneficiary under the Insurance policy. Andhra Bank did not inform the Hon'ble Tribunal i.e. NCDRC that there were other beneficiaries also for the policies, neither did the Liquidator and thus the Hon'ble NCDRC by interim order released an amount of Rs. 3,07,87,681/- inclusive of interest in favour of Andhra Bank. It is submitted by the Applicant that despite the Applicant being beneficiary of the said Insurance Policy, the Andhra Bank withheld the amount which was released to it wrongly by way of interim arrangement as per order of NCDRC.
9. It is further submitted that it is the established principle of law that the interim/interlocutory orders are never final and they merge in the final orders.
10. It is further submitted that in the Minutes of the Lenders Meeting dated 16.01.2015, the Andhra Bank had assured for necessary compliance for sharing the amount so received from New India Insurance Company, in wake of its consent for actions under SARFAESI and to get its share from sale proceeds.
11. It is further submitted that pending the said litigation, the Gujarat Oleo Chem Ltd. (GOCL) went into liquidation, the said fact has been informed to NCDRC and R-1 showed its interest in pursuing the said litigation on behalf of the Corporate Debtor.
12. The Applicant further submitted that on 25.02.2019 during the proceedings before the NCDRC, the counsel of the complainant requested the Liquidator to take instructions from the erstwhile Committee of Creditors as to whether they are ready to accept the payment in terms of the assessment made by the surveyor along with the interest @ 9% p.a, w.e.f. six months from the date of submissions of the complaint till the date on which the said amount was deposited with the NCDRC.
13. It is further submitted that on 24.05.2019, the counsel of the complainant informed the commission i.e. NCDRC that the erstwhile Committee of Creditors were not agreeable to accept the payment in terms of proposal of 25.02.2019.
14. It is further submitted that during the course of hearing before the commission, the committee/members of stakeholders informed the NCDRC that the statement made on behalf of the Liquidator on the last date of hearing accepting Rs. 2,60,20,785/- along with appropriate interest is not acceptable. Thus NCDRC directed the parties opposing settlement to obtain appropriate direction from the Adjudicating Authority to the Liquidator on this matter of following instructions of the Committee of Creditors or else in absence of any direction from this Tribunal to the Liquidator, the NCDRC will be passing the final order in the said matter. In support of the contention, the Applicant has annexed as Annexure-K & L.
15. It is submitted that the Liquidator is acting against the committee of stakeholders by accepting the proposal of settlement as the committee of stakeholders is of the opinion that the Liquidator should proceed on the merits of the case instead of accepting the settlement.
16. On receipt of the notice the Liquidator appeared and filed his reply denying submissions so made in the application as misconceived and devoid of merits.
17. It is submitted by the Liquidator that the liquidation order was passed on 17.01.2018 and by virtue of the said order, the answering Respondent/Liquidator is obliged to complete the liquidation of the Corporate Debtor in a time bound manner.
18. It is further submitted that the Applicant has grossly misconceived the relevant provisions of the Insolvency and Bankruptcy Code and has negligently filed the instant application without referring Section 35(2) of the Insolvency and Bankruptcy Code, read with Regulation 8 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, which enables the Applicant to consult any of the stakeholders and entitle to a distribution of the proceeds under Section 53 of the Code subject to the condition that such consultation shall not be binding on him.
19. The Liquidator further submitted that the complaint was filed before the NCDRC sometime in the year 2007 for claiming insurance on the loss incurred by the Corporate Debtor in a fire. Such claim was of an approximate amount of Rs. 15 Crores against New India Assurance Company Limited, and the said matter was pending since 2007. Since, substantial amount of time had been consumed in the proceedings prior to Corporate Insolvency Resolution Process with no material outcome. As such, after taking charge of the Corporate Debtor, he analyzed the entire litigation, took note of the factual background and thought that it will be beneficial for that the matter be settled with the Insurance Company. Considering the fact that, the process of the CIRP and liquidation is to be completed in a time bound manner.
20. During the course hearing, the NCDRC, the Hon'ble Bench proposed a settlement offer. In view of that the Liquidator discussed the proposal with the stakeholder. However, the stakeholder was of the view that the amount of assessment of loss along with the interest rate should be higher.
21. It is further submitted that the Gujarat State Financial Corporation (GSFC), who is one of the creditors having 15.28% voting share in the erstwhile CoC accorded its complete acceptance in favour of the settlement offer, vide e-mail dated 16.09.2019, which is read as under:
"With reference to your e-mail dated 16.09.2019, we have to inform you that the Liquidator has already conferred the power of settling the matter via Insolvency and Bankruptcy Code, 2016 and the balance of convenience lies in the favour of accepting the settlement offer. We think that consent of the Stakeholder is not necessary. You may proceed further in the interest of the secured creditors."
22. And as such, the Liquidator settled the matter on the following reasons:
(a). Absence of supplementary affidavits for the documents to be relied on,
(b). Absence of witness to substantiate the documents,
(c). The Tribunal is of the view that the litigation is being prolonged without any cause.
23. It is further submitted that the answering Respondent has complied all the relevant provisions of the Code, applicable on the said proceeding before giving its affirmation for accepting the settlement offer as stakeholders meeting were conducted timely wherein the stakeholders were apprised about every new development and advice was also sought from the stakeholders.
24. Gone through records and heard both sides. On perusal of the record it is found that the prayer so made by the Applicant i.e. prayer no. (b) and (d) are itself contradictory to each other. In paragraph (b) of the prayer, the Applicant prayed that "a direction be given to the Respondent No. 1 to act in accordance with the derision of the Committee of stakeholders and to pursue the Consumer Case No. 04 of 2007 before NCDRC on merits in accordance with law without according or giving any consent to any kind of settlement." On the other hand, in prayer (d), the Applicant has prayed for "
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direction upon the Respondent No. 1 to maintain status quo and further seeking direction upon the Respondent No. 1 not to pursue the Consumer Case No. 04 of 2007 before the National Consumer Disputes Redressal Commission (NCDRC) and/or to accord or to act or give any consent for any kind of settlement." 25. Thus, on plain reading, it is found that, in one place the Applicant is seeking direction upon liquidator to pursue the Consumer Case No. 04 of 2007 and on the other hand, seeking direction upon the Respondent No. 1 (Liquidator) not to pursue the Consumer Case No. 04 of 2007. 26. Under such circumstances, it is difficult to make out actual grievances of the Applicant. However, for the interest of justice, it is observed that the Liquidator is expected to act as per the decision of the stakeholders. 27. Accordingly, the instant application i.e. IA 746 of 2019 in CP(IB) No. 04 of 2017 is partially allowed and stands disposed of with the above observations and is directed to conclude the liquidation process as early as possible so as to keep sanctity of the IB Code.