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    Give time to debtors beyond agreed time - 30.07.2020

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    Give time to debtors beyond agreed time - 30.07.2020

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    1 views5 pages

    Give time to debtors beyond agreed time - 30.07.2020

    Uploaded by

    radtarot

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI

    Company Appeal (AT) (Insolvency) No. 649 of 2020

    IN THE MATTER OF:

    Brig. E. S. Krishnamurthy & Ors. …Appellants

    Versus

    M/s Bharath Hi-Tech Builders Pvt. Ltd. …Respondent

    Present:
    For Appellants: Mr. Srijan Sinha, Advocate
    For Respondent:

    ORDER
    (Through Virtual Mode)

    30.07.2020: Appellants claiming to be Financial Creditors on the basis of

    having been Lenders of the Corporate Debtor, are aggrieved of the impugned order

    dated 28th February, 2020 passed by the Adjudicating Authority (National Company

    Law Tribunal), Bengaluru Bench by virtue whereof the Adjudicating Authority

    disposed of the Company Petition with certain directions incorporated in Para 8 of

    the impugned order which reads as under:-

    “8. In view of the above narrated facts and circumstances of the

    case, C.P. (IB) No. 188/BB/2019 is disposed of with the

    following directions:

    a. The Corporate Debtor is directed to settle the remaining

    claims as expeditiously as possible, but not later than


    -2-

    3 months, and communicate this decision to all the

    concerned parties.

    b. If aggrieved by the settlement process of the Corporate

    Debtor, the remaining Petitioners, if any, would be at

    liberty to approach the Adjudicating again, in

    accordance with law.

    c. No order as to costs.”

    2. After hearing learned counsel for the Appellant we find that the subject

    matter being a Housing Project with stakeholders, inter alia, being the Allottees and

    the Investors, the Company Petition came to be disposed of on the basis of Joint

    Consent Terms dated 12th February, 2020 filed by the parties to the Company

    Petition. Having regard to the Consent Terms, the Adjudicating Authority observed

    that claims of 140 Investors have been fully settled by the Corporate Debtor and an

    amount of Rs.27.25 Crore has been paid to them and 13 claims of the Petitioners

    before the Adjudicating Authority have been settled, whereas 40 are in the process

    of settlement and remaining 39 are pending settlement. The Adjudicating Authority

    was of the view that the process of settlement appeared to be progressing in all

    seriousness. So instead of examining all individual claims in detail, the

    Adjudicating Authority deemed it appropriate to direct the Corporate Debtor to

    Company Appeal (AT) (Insolvency) No. 649 of 2020


    -3-

    settle all the remaining claims within a definite time frame. It further appears that

    three months’ time was allowed for settlement of the claims by the Corporate

    Debtor. The Adjudicating Authority observed that if any of the claimants be

    aggrieved of the settlement process, they would be at liberty to approach the

    Adjudicating Authority again.

    3. It is manifestly clear that the application under Section 7 of the I&B Code

    came to be disposed of at the pre-admission stage and no order of admission or

    rejection of application was passed by the Adjudicating Authority keeping in view

    the nature of claims which admittedly were relatable to a Housing Project. The

    Adjudicating Authority appears to have been influenced by the fact that claims of

    the maximum number of stakeholders have been settled which included some

    claims settled at pre-admission stage before the Adjudicating Authority. In so far

    as the remaining claims were concerned, the Adjudicating Authority allowed a

    definite time frame viz. 3 months giving liberty to the claimant(s) whose claims

    would remain unsettled after expiry of the given time frame, to come back and

    re-agitate the matter.

    4. Viewed in these circumstances, it cannot be said that the impugned order is

    of such a nature which is prejudicial to the rights and interests of any of the

    Company Appeal (AT) (Insolvency) No. 649 of 2020


    -4-

    stakeholders. The claimant(s) who may be dissatisfied or whose claims remain

    unsettled during the given time frame can approach the Adjudicating Authority who

    has not shut its doors. Assailing of the impugned order in appeal would not be the

    appropriate course.

    5. It is a fact that the given time frame has already elapsed but we take judicial

    notice of the fact that normal business operations had been adversely affected by

    the imposition of lockdown due to outbreak of COVID-19 which has been declared

    pandemic. Even after unlocking, the pace of business operations is far from

    normal. In these circumstances, some concession has to be given in adherence to

    the timelines set in terms of the impugned order. Be-that-as-it-may, this situation

    may also have to be addressed by the Adjudicating Authority, if approached by a

    claimant whose claim has not been settled so far. It is not disputed that the

    resolution of disputes relating to claims, more particularly of Allottees in Housing

    Projects, has to be given primacy and pushing the Corporate Debtor into liquidation

    would only be the last option.

    6. In view of the foregoing discussion and also bearing in mind that the

    settlement process set in motion at the pre-admission stage is supported by the

    Consent Terms filed by some of the stakeholders, though it may not be all

    encompassing, this appeal would not lie. We accordingly hold that the appeal is

    Company Appeal (AT) (Insolvency) No. 649 of 2020


    -5-

    not maintainable. There being no legal infirmity in the impugned order, the appeal

    is dismissed.

    7. The dismissal of this appeal, however, will not preclude the Appellants from

    approaching the Adjudicating Authority in terms of the impugned order, if their

    claims are not settled by the Corporate Debtor.

    [Justice Bansi Lal Bhat]


    Acting Chairperson

    [Justice Anant Bijay Singh]


    Member (Judicial)

    [Kanthi Narahari]
    Member (Technical)
    am/gc

    Company Appeal (AT) (Insolvency) No. 649 of 2020

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