Resolution Professional vs Bscpl Infrastructure Limited And ...
2021 Latest Caselaw 1346 Tel

Item No.16


     THE HON'BLE THE CHIEF JUSTICE HIMA KOHLI
                                 AND
     THE HON'BLE SRI JUSTICE B. VIJAYSEN REDDY

                 WRIT APPEAL No.149 OF 2020

JUDGMENT: (Per the Hon'ble the Chief Justice Hima Kohli)


1.    The present appeal has been filed by the appellant

(respondent No.3 in W.P.No.19924 of 2019), who is a Resolution

Professional (for short 'RP') appointed by the NCLT in respect of

C&C Constructions Limited, praying inter alia for quashing and

setting aside the order dated 08.01.2020 passed by the learned

Single Judge in IA.No.1 of 2019, filed by the respondent No.1/writ

petitioner praying inter alia for issuing directions to the respondent

No.3/Axis Bank to restore the operations of the bank account of the

Joint Venture between it and C&C Constructions Limited pending

disposal of the writ petition.

2. In the impugned order, the learned Single Judge has observed

that the respondent No.1/writ petitioner is one of the partners of the

Joint Venture and is only seeking to restrain the appellant/RP from

violating the terms and conditions of the Joint Venture Agreement

dated 17.09.2010 on the ground that appointment of the RP in

respect of the Corporate debtor vide order dated 14.02.2019 passed

by the NCLT, cannot be a ground for him to obstruct the affairs of

the Joint Venture by calling upon the respondent No.3/Axis Bank to

freeze the accounts of Joint Venture, thereby jeopardising the

interest of the Joint Venture. The learned Single Judge has further

observed that at best, the RP would be entitled to take necessary

steps in terms of Sections 17 and 18 of the Insolvency and

Bankruptcy Code, 2016 (for short 'IBC') in relation to the company

in respect whereof he has been appointed, but not in respect of the

Joint Venture. We may note that Section 17 of the IBC sets out the

manner in which the IRP has to manage the affairs of the corporate

debtor and Section 18 elaborates the duties of the IRP.

3. Expressing a prima facie view that the terms and conditions

of the Joint Venture Agreement dated 17.09.2010 governing the

respondent No.1/writ petitioner and the corporate debtor

particularly, clause 4.1 thereof requires that the affairs of the Joint

Venture would be carried out by a Steering Committee to be

constituted in terms of clause 4 of Article IV under the title

'Management of the JV', the learned Single Judge has observed

that the said clause takes adequate care to ensure that one of the

partners of the Joint Venture does not take over the affairs of the

Joint Venture. In other words, the appellant/RP can only step into

the shoes of the Board of Directors of the corporate debtor before

the NCLT in the pending IBC proceedings, but he cannot obstruct

the affairs of the Joint Venture Company, which is a separate entity

and includes a third party, namely the respondent No.1/writ

petitioner. As a result, the respondent No.1/writ petitioner was

directed to file an undertaking before the court to the following

effect:

" a) The petitioner undertakes that the funds in all the Bank Accounts of the BSC - C & C Joint Venture (JV) would only be used for the projects / works being undertaken by the JV and would not be used for any other purpose.

b) The petitioner undertakes that the Resolution Professional would be given full access to the books of accounts as well as the statements of the JV, including all the expense statements and documents pertaining to the use of funds from the accounts of the JV.

c) The petitioner further undertakes that the petitioner will abide by the terms and conditions of the Joint Venture Agreement dated 17.09.2010 and ensure that no steps will be taken in breach of the said Agreement."

4. Mr. S.Niranjan Reddy, learned Senior Advocate appearing

for the respondent No.1/writ petitioner states that an undertaking

has already been filed by the respondent No.1 and further that the

respondent No.1 has been giving a two day's advance notice to the

appellant/RP representing the corporate debtor in the Joint Venture

before releasing any payments excluding those payments made in

usual course thus, giving adequate opportunity to the RP to raise

any objections.

5. In view of the fact that the impugned order has only worked

out an interim arrangement and the interim application moved by

the respondent No.1/writ petitioner has yet to be heard and decided,

which fact has also been noticed by the learned Single Judge while

passing the impugned order dated 08.01.2020, we do not see any

reason to entertain the present appeal. Mr. Salloori Ramesh,

learned Senior Advocate appearing for the appellant has argued that

no part of the cause of action has arisen in Hyderabad and the

respondent No.1/writ petitioner could not have filed the writ

petition in this court. If that is so, then it is for the appellant/RP to

move an appropriate application in the pending writ proceedings

raising an objection regarding the maintainability of writ petition on

the ground of lack of territorial jurisdiction. But that cannot be a

ground to file the present appeal.

6. We decline to go into the said aspect on the ground that the

interim application is still pending adjudication before the learned

Single Judge. The other pleas taken on behalf of the appellant/RP

to assail the impugned order are kept open for being adjudicated

upon when the interim application and/or the writ petition is

decided.

7. In view of the observations made hereinabove, the appeal is

dismissed along with the pending applications, if any.

_________________ HIMA KOHLI, CJ

______________________ B. VIJAYSEN REDDY, J 26.04.2021 Lur