National Company Law Appellate Tribunal (NCLAT): Justice A.I.S Cheema (The Officiating Chairperson) and Dr. Alok Srivastava (Technical Member)while allowing an appeal, quashed NCLT’s order and rejected the Resolution Plan so approved along with the consequences which would have arisen thereafter.
The pertinent matter was filed against the impugned Order of NCLT, Mumbai Bench, Mumbai, where the Resolution Plan so approved made provision of transfer of personal properties of the Appellants. It was contended that the Resolution Plan has to be with respect to the property of the Corporate Debtor and cannot enforce action against the properties of Shareholders/ Directors or Guarantors without proceeding against them. The Resolution Professional had contended that the Adjudicating Authority and the Appellate Tribunal had limited judicial review available with regard to the commercial decision taken by the Committee of Creditors and that the Memorandum did not include personal assets.
While referring to State Bank of India v. Ramakrishnan, the Tribunal made it clear that personal properties of the Corporate Debtor cannot be realised by sale/ transfer in the CIRP of the Corporate Debtor without resorting to proceeding before appropriate authority under the existing enactment before portion of Part-III has been applied to the Personal Guarantors of Corporate Debtor.
The Coram while quashing the Order stated, “All actions taken in consequence of the impugned order approving the Resolution Plan shall stand set aside. As the Insolvency Resolution Process period under Section 12 of the IBC is already over, the matter is remitted back to the Adjudicating Authority to pass appropriate order of liquidation under Section 33 of the IBC”.
Nitin Chandrakant Naik v. Sanidhya Industries LLP, Company Appeal (AT) (Insolvency) No. 257 of 2020, decided on 26-08-2021]
Agatha Shukla, Editorial Assistant has reported this brief.
Counsel for the Parties:
Mr. Abhishek Anand, Mr. Kunal Godhwani, Mr. Parthik Choudhury, Mr. Rahul Adlakha, Advocates
Mr. Rohit Kumar Singh, Mr. Samrat Nigam, Mr. A Chandra, Advocate for R1.
Mr. Ajay K Jain and Mr. Atanu Mukherjee, Advocates for R3.
Mr. Krishnendu Datta, Senior Advocate with Mr. Ashish Porwal, Mr. Kushank Sindhu, Mr. Tushar Bhardwaj, Mr. Abhinav Goyal, Ms. Seeta Swamy, Advocates for R4 & 5.
CA Raghunath S for R4 & 5