Veeramachaneni Rama Mohan Rao vs Bank Of Maharashtra And Another

The present writ petition is arising out of an order dated 26.04.2021 passed by the National Company Law Tribunal, Hyderabad Bench, Hyderabad (hereafter referred to as ‘NCLT’), by which the petition preferred under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereafter referred to as ‘IBC, 2016’) by the Bank of Maharashtra, has been admitted declaring moratorium under Section 14 of the IBC, 2016 and Insolvency Professional (IP) has been appointed. Various grounds have been raised in the matter and it has been stated that the order has been passed in violation of principles of natural justice and fair play.

The facts of the case reveal that the present petitioner committed default in making a payment of Rs.41,59,60,224/-(Rupees forty one crore fifty nine lakhs sixty thousand and two hundred and twenty four only) to the Bank of Maharashtra and the said Bank of Maharashtra submitted an application for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor (CDR). The application was filed on 09.12.2020 for default of financial debt as on 19.11.2021 amounting to Rs.41,59,60,224/- (Rupees forty one crore fifty nine lakhs sixty thousand and two hundred and twenty four only) against the present petitioner under Section 7 of the IBC, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and the NCLT vide order, dated 26.04.2021, which is under challenge in the present writ petition, has admitted the petition declaring moratorium under Section 14 of the IBC, 2016 appointing the Interim Resolution Professional (IRP) to carry out the functions as contemplated under the IBC, 2016. The petitioner has not stated full facts before this Court and the record of the case reveals that while CIRP was going on, Sri Veeramachaneni Rama Mohan Rao, the then Managing Director of the respondent No.2, i.e., M/s.SVSVS Projects (Private) Limited on 09.04.2021 had submitted to Bank of Maharashtra a One Time Settlement (OTS) for settlement of loan account for a sum of Rs.26,29,04,544/- (Rupees twenty six crore twenty nine lakh four thousand and five hundred and forty four only) and physically went to the Stressed Assets Management Branch, Hyderabad. However, the offer was not accepted by the Bank of Maharashtra and this fact itself reveals that the petitioner was very much aware of the CIRP. It has been also brought to the notice of this Court that after initiation of CIRP, the IRP on 30.04.2021 had made public announcement in Form-A in newspapers in compliance with the provisions of the IBC, 2016 and the Rules made thereunder and on 19.05.2021, the IRP has filed Form No.INC-28 in the Ministry of Corporate Affairs about the initiation of CIRP against CDR. The facts further reveal that the IRP has conducted Committee of Creditors (CoC) Meeting on 25.05.2021 through Zoom Webinar Application in which the petitioner was very much present and attended the meeting. The entire record of the meeting was sent to the petitioner on 28.05.2021. The second CoC Meeting was held on 21.06.2021 and the petitioner has again attended the meeting. The third CoC Meeting was held on 07.08.2021 and the petitioner has attended the said meeting also. Meaning thereby, the petitioner has very much participated in the process and is making lame excuse about his illness.

In the considered opinion of this Court, the NCLT has taken all steps to serve the present petitioner, he has very much appeared after issuance of notice and the only aim and object of the petitioner is to ensure that the process of recovery of the debt, which is about fifty crore rupees, is deferred/delayed on some pretext or the other.

In the considered opinion of this Court, there is remedy of appeal available under Section 61 of the IBC, 2016, which is extracted as under:-

“61. Appeals and Appellate Authority:-

(1) Notwithstanding anything to the contrary contained under the Companies Act, 2013, any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law appellate Tribunal.

(2) Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal.

Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days.

(3) An appeal against an order approving a resolution plan under Section 31 may be filed on the following grounds, namely-

(i) the approved resolution plan is in contravention of the provisions of any law for the time being in force;

(ii) there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period;

(iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the Board;

(iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or

(v) the resolution plan does not comply with any other criteria specified by the Board.

(4) An appeal against a liquidation order passed under section 33, or sub-section (4) of section 54L, or sub-section (4) of section 54N, may be filed on grounds of material irregularity or fraud committed in relation to such a liquidation order.

(5) An appeal against an order for initiation of corporate insolvency resolution process passed under sub-section (2) of section 54-O may be filed on grounds of material irregularity or fraud committed in relation to such an order.”

This Court, in the light of the aforesaid provision of law, is of the opinion that no case for interference is made out in the matter. The petitioner shall certainly be free to file an Appeal before appropriate forum.

The writ petition is accordingly dismissed. Pending miscellaneous applications, if any, shall stand closed. There shall be no order as to costs.