The division judge bench of the National Company Law Appellate Tribunal in the case of Rakesh Gupta Vs Nitin Narang held that even after expiry of statutory period 90 days further time was granted but no resolution plan could be approved. In such situation the RP was having no alternative than to proceed with a petition under Section 33(2) of the IBC.
BRIEF FACTS
The factual matrix of the case is that the application was filed by the Punjab National Bank under the section of IBC. The Adjudicating Authority proceeded with the CIRP proceedings against the corporate debtor. Thereafter, in an application submitted under Section 7 of the IBC, it was revealed that a term loan of Rs. 6.62 crores and an overdraft in the amount of Rs.1.50 crore were approved in 2012. Subsequently, from time to time it was enhanced in the year 2014 to the tune of Rs.4.60 crores, out of which Rs.4.5 crore was released in term loan in favor of the Corporate Debtor. It was enhanced to Rs.10 crore. However, the account of the corporate debtor was declared NPA. Furthermore, on the account of declaring the account NPA a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 was sent which was followed by the issuance of notice under Section 13(4) of the Act. thereafter, the petition under section 7 of the IBA Act was filed and the same was admitted. In the CIRP since no Resolution Plan was approved as per authorization of COC, the Resolution Professional filed a petition under Section 33(2) of the IBC on which impugned order was passed by the Adjudicating Authority which has been assailed in the present appeal.
The learned counsel appearing on behalf of the appellant has contended that the main objective of the IBC is to continue Corporate Debtor in running condition and liquidation is
the last resort. It was also submitted that the RP without exhausting all the remedies approached the Adjudicating Authority with a plea to initiate Liquidation Proceedings. At last, it was submitted that the Respondent during CIRP had never given any opportunity to the Appellant for the revival of the Corporate Debtor.
The learned counsel appearing on behalf of the respondent has contended that despite several requests made by the respondent, the appellant didn’t provide any information to the respondent and this was the reason that RP was constrained to file the Petition under Section 19 of the IBC against the appellants. Even, the Adjudicating Authority imposed the fine of Rs. 5 Lakhs on the appellant due to non-cooperation and not handing over books of accounts and other information to the Respondent. It was also stated that the appellant being the ex- directors is not entitled to maintain the present appeal.
COURT’S OBSERVATION
The hon’ble court held that as per the scheme of IBC and also statutory provisions mentioned therein, the such proceeding is required to be concluded within a specified time. The
impugned order quoted hereinabove reflects that even after expiry of statutory period 90 days further time was granted but no resolution plan could be approved.
In such situation the RP was having no alternative than to proceed with a petition under Section 33(2) of the IBC. Section 33(2) of the IBC once Resolution Professional in compliance with the conditions mentioned in sub-section (2) with a prayer to liquidate Corporate Debtor, the Adjudicating Authority has no option but to pass an order for liquidation. However, without recording any specific finding on the maintainability of the appeal by the appellant since we have noticed no error in the impugned order rather satisfied with the reasoning of the Adjudicating Authority in the impugned order there is no reason to pass an order in favor of the appellant.
CASE NAME- Rakesh Gupta Vs Nitin Narang
CITATION- : (2022) ibclaw.in 688 NCLAT
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