1. Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt Ltd & Anr – 14.08.2020

1. Facts:

1. The appeal in the instant case under section 62 of the I&B Code, 2016 is directed against the judgment and order dated 14.05.2019 passed by the Hon’ble NCLAT whereby the contention that the application made by the Respondent under section 7 of the Code seeking initiation of CIRP in respect of the CD is barred by limitation was rejected.
2. 22.12.2007 – lender banks sanctioned and disbursed various loans, advances and facilities to the CD.
3. In 2008 & 2009, various security documents in favour of the lender banks were executed by the CD.
4. On 26.04.2013, a deed of modification of charge over the assets of the CD was also executed.
5. The CD having defaulted in payment of the amount due against such loans, advances and facilities, its account with the Corporation Bank was classified as a NPA on 08.07. 2011.With Indian Overseas Bank on 05.08.2011.
6. On 15.11.2011, demand notice u/s 13(2) of SARFAESI was issued by IoB to the CD and its guarantors. These were followed up with recovery proceedings against the CD by the lenders u/s 19 of the RDDBFI Act, 1993.
7. While the aforesaid proceedings were pending before DRT, on or about 21.03.2018, the Respondent no.2 moved an application before the NCLT u/s 7 of the I&B Code.
8. On 09.08.2018, the NCLT held that the FC was entitled to initiate CIRP u/s 7 of the Code when there was a debt & there was a default and that the statutory remedy available to the FC, the CD cannot question its maintainability only for the applicant having adopted other proceedings under other enactments. Accordingly, the application was admitted.
9. When appealed to the NCLAT, it was contended that an application u/s 19 of the RDDBFI act was already pending – to which, the Hon’ble NCLAT observed that initiation of CIRP cannot be annulled merely for pendency of a petition u/s 19 of the RDDBFI Act, 1993; and in terms of section 14 of the Code, all such pending matters cannot be proceeded with because of the commencement of moratorium.
10. When appealed to the Hon’ble Supreme Court, it was observed that the principal issue relating to limitation, though raised by the appellant was not decided by the NCLAT. After reference to B.K. Educational Services pvt ltd v. Paras Gupta & Associates, wherein it was held that limitation Act would be applicable to applications filed u/s 7 of the Code, the SC remanded the matter back to NCLAT to decide on the issue.
11. The NCLAT, while holding that the application in question is not barred by limitation, also mentioned that, in para 20 of its order, article 137 in Part II of the Third Division of Schedule of Limitation Act would be applicable to the application/s under section 7 or 9 or 10 of The Code. It had also observed that the application in question is not barred by limitation in the manner that the right to apply under section 7 of the Code accrued to the Financial Creditor only on 01.12.2016 when the Code came into existence.
12. The NCLAT, in paras 29 and 30, referred to Article 61(b) of the Limitation Act and concluded that the property having been mortgaged, the claim is not barred by limitation as the period of limitation is 12 years with regard to mortgaged property. This led the NCLAT to conclude that the application under section 7of the Code is not barred by limitation.
13. In short, the NCLAT rejected the plea of bar of limitation on 2 major considerations: 1) that the right to apply under section 7 of the Code accrued to the respondent only on 01.12.2016 when the Code came into force and 2) that the period of limitation for recovery of possession of the mortgaged property is 12 years.

2. Contentions

1. The Appellant contended that the Hon’ble NCLAT has failed to apply the law declared by the Hon’ble SC in a series of decisions to the effect that for an application u/s 7 of the Code, Article 137 of the Limitation Act is applicable and not Article 61(b) – the limitation for which is 3 years from the date of the alleged default.
2. Neither does article 61(b) of Limitation Act nor does Section 18 apply in the case and therefore, the date of default as stated by the Respondent No.2 is hopelessly barred by Limitation.
3. The Appellant also cited the case of B.K. Educational Services to buttress the point that Article 137 of the Limitation Act applies to the application u/s 7 of the Code and hence the period of limitation is 3 years which is to be counted from the date of default.
4. The Respondent no.2 has mentioned the date of default as 08.07.2011 and as an evidence of default, only the documents pertaining to the NPA were attached, i.e., till the year 2011. Hence, according to the Counsel, the application filed by the Respondent no.2 deserves to be rejected for being barred by limitation.
5. The Counsel for the appellant also referred to the case of K. Sashidhar v. Indian Overseas Bank, where the SC had reaffirmed the position that the right to sue under the Code accrues on the date when default occurs and if the default had occurred 3 years prior to the date of filing of the application, the same would not amount to debt due and payable under the Code. The Counsel also cited other relevant cases[1].
6. The Counsel also contented that debt shown in the balance sheet does not revive the limitation period of 3 years as applicable to the IBC under Article 137 of the Limitation Act for the reasons that the debt was shown in the balance sheet is not covered by Section 18 of the Limitation Act, and even otherwise, Section 18 cannot revive the “default” relevant for IBC and could only revive limitation with respect to the cause of action.

The Respondents Contentions:

1. The Counsel for the Respondent contended that only because of initial date of default being mentioned as 08.07.2011, the application u/s 7 was not barred by Limitation. This is because the debt in question had been legally and unequivocally admitted to be due and payable in writing by the Respondent No.1 all throughout from the year 2011 until 2017 in its balance sheets, filed along with annual returns before the registrar of companies.
2. While relying on the case of Jignesh Shah, the Counsel contended that Section 18 of the Limitation Act certainly extended the period of limitation under the Code on any acknowledgement of debt by the CD. Reliance was placed on M/s Mahabir Cold Storage v. CIT Patna, to submit that the registers of a company are of prima facie evidence; and the balance sheet disclosing loans and borrowings and forming part of annual returns, indeed constituted the admission and acknowledgment of the CD of its indebtedness.
3. The Counsel also contended that the unrestrained applicability of Section 238-A of the Code in an anomalous manner suggested on behalf of the appellant, would compel all the financial institutions to immediately proceed and file the application u/s 7 before the expiry of 3 years exactly from the date of default, in spite of the fact that any borrower, in order to overcome the financial constraints to repay might be ready and willing to comply with the requirements of Section 18 of the Limitation Act for the extension of period of limitation. Reliance was placed on N. Balakrishnan v. Krishnamurthy to emphasise that the rules of limitation are not meant to destroy the rights of the parties.
4. According the Counsel for the Respondent, the application u/s 7 was well within limitation because of 3 reasons: 1) the liability of loan is long standing and is recorded in the balance sheets from FY 2011-2012 to FY 2016-2017. 2) By way of a letter, request for OTS was made on behalf of the CD; & 3) OA was filed before DRT well within the stipulated time period and the same was pending.

3. Analysis:

1. It was observed by the Hon’ble SC that the intention of the Code was to put the CD on its feet and it was not a mere money recovery legislation for the Creditors. It was also observed that CIRP is not intended to be adversarial to the CD but is essentially to protect its interests and that CIRP has its genesis in default on the part of the CD.
2. Section 238-A, providing that the provisions of the Limitation Act, 1963 shall, as far as may be, apply to the proceedings or appeals before NCLT or the NCLAT.
3. The Hon’ble SC in B.K. Educational Services, upheld the constitutional validity of Section 238-A of the Code and took note of the report of the Insolvency Law Committee, which observed that “12…the law is a complete code and the fact that the intention of such a Code could not have been to give a new lease of life to debts which are time-barred”.
4. It was also mentioned in para 34 of the report mentioned above “that the Code cannot be triggered in the year 2017 for a debt which was time barred in 1990 as that would lead to the absurd and extreme consequence of the Code being triggered by a stale or dead claim.”- Para 34 of the Insolvency Law Committee Report of March, 2016.
5. The Supreme Court noted that: 1) The code is a beneficial legislation intended to put the CD back on its feet, 2) that the CIRP is not intended to be adversarial to the CD, 3) the intention of the Code is not to give new lease of life to debts which are time barred, 4) that the period of limitation for an application seeking imitation of CIRP u/s 7  of the Code is governed by Article 137 of the Limitation Act, 5) The trigger for initiation of CIRP by a FC is default on the part of the CD i.e. that the right to apply under the Code accrues on the date when default occurs, 6) Default referred to in the code is that of actual non-payment by the CD when a debt becomes due and payable, 7) if the default occurred over 3 years prior to the date of filing of application, application would be time barred save as otherwise except in those cases where condonation would be allowed and 8) An application u/s 7 of the Code is not for enforcement of mortgage liability & Article 62 of the Act does not apply to the application.
6. It was also mentioned by the SC that the SC had time again rejected the contention suggesting continuing cause of action for the purpose of application u/s 7 of the code while holding that the limitation started ticking from the date of issuance of recovery certificate (Vashdeo R. Bhojwani) and in Gaurav to be the date of NPA.

4. Order:

1. The application filed by the Respondents was set aside and the orders passed by the NCLT & NCLAT were also set aside.
2. All the stalled proceedings that were paused because of the application of moratorium u/s 14 of the Code now stand revived.
    

Univalue Projects Private Limited vs. The Union of India & Ors. – 18.08.2020

1. Facts:

1. The present petition is a writ petition that has been filed by the petitioners under Article 226 of the Constitution of India, in which, a stern challenge has been mounted to an impugned order dated 12^th May, 2020 issued by the Registrar of the National Company Law Tribunal at its Principal Bench in New Delhi, which appears to have been issued with the approval of the Hon’ble Acting President of the NCLT, New Delhi.
2. The order dated 12.05.2020 imposes a mandatory prescription on all financial creditors to submit certain financial information as a record of default before the Information Utility, as a condition precedent for filing any new application u/s 7 of the IBC, 2016. The order also was directed to be imposed retrospectively on all those applicants/financial creditors who have pre-existing applications filed u/s 7 of IBC and pending before various benches of the NCLT.
3.  The petitioner, who is a financial creditor with a case pending before NCLT Kolkata Bench, approached the Hon’ble High Court seeking relief from the impugned order since the order had the effect of adversely altering their substantive rights as granted to a creditor under the provisions of the I&B Code.

2. Issues:

1. Scope of the powers of NCLT and whether the exercise of the same in the impugned order dated 12.05.2020 is de hors the IBC and the rules and regulations framed thereunder?
2. Whether the NCLT could enforce the same retrospectively thereby adversely affecting the rights of the petitioners as financial creditors under the provisions of IBC.

3. Contentions:

1. The learned counsel for the petitioners, Ms. Ujjaini Chatterjee, relied on multiple judgments of the Supreme Court and the National Company Law Appellate Tribunal to support her argument that the NCLT does not possess the statutory or regulatory backing to issue the impugned order, let alone enforce it retrospectively.
2. She also questioned the competency of the NCLT to issue the impugned order. She referred to section 424 of the Companies Act, 2013 (‘CA,2013’) to contend that though the functioning of the NCLT and NCLAT is not bound by the rigours of CPC, the same are guided by the rules of natural justice subject to the provisions of both the CA, 2013 and the IBC. Only the arena of regulating their day to day administration and such procedure that may be followed for the same has been left to the NCLT. She also stressed that section 424 of the CA, 2013, confers no power either to the NCLT/NCLAT to make any rules of such procedure that would have the effect of altering the provisions of the CA, 2013 or the IBC or any other regulations framed thereunder.
3. She also stressed on the phrase ‘as may be specified´ in the text of IBC to contend that it is a well-established principle of statutory interpretation where the legislature is assumed to be specially precise and careful in its choice of language. Therefore, based on the definition of ‘specified’ under sub-section (32) to section 3 of the IBC, ‘as may be specified’ would imply such regulations as have been specified by the IBBI, and not the NCLT. Therefore, it cannot be assumed that the Tribunal’s own administrative procedure cannot be equated to the power of the IBBI to make such regulations consistent with the IBC, 2016.
4.  While taking reference of the case of Pradyut Kumar Bose on the scope of delegation of statutory powers, it was contended that where the law specifically provided for such delegation, it is permissible in law only for the IBBI to frame such regulations while they remain consistent with the parent statute, that is, the IBC and the NCLT has traversed beyond its statutory borders in issuing the impugned order. Reliance was also paced on Hitendra Vishu Thakur to point out that a procedural statute should not generally speaking, be applied retrospectively where the result would be the creation of new disabilities or obligations, or if it were to impose new duties in respect of transactions already accomplished.
5. It was also contended that a record of default recorded with the IU is only one of the designated methods of furnishing proofs to prove the existence of a financial debt and not the only modes. Section 7(3)(a) of the Code makes the use of the word ‘or’ makes it clear that the intention of the legislature was to make this section ‘disjunctive’.
6. She also cited Regulation 8 of the IBBI (Insolvency Resolution for Corporate Persons) Regulations,2016 to highlight that the sub-regulation (2) highlights 4 categories in addition to the records of default available with an IU, that may be submitted by a FC to prove the financial claims of such a creditor.
7. Reliance was also placed on Neelkanth township and Construction  & Bharti Finance & Infrastructure, where it was hed that IU cannot be a mandatory provision or the sole repository of a provision to prove the existence of a default in relation to a financial debt accrued to a financial creditor.
8. Ms. Bhuteria, for petitioner no.2, while supplementing the points mentioned above, also introduced another point which was that Rule 4(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules,2016 deals with the aspect of application by a FC. Under the said rule, in Form-1, all accompanied documents and records have to be filed. In Part V of the Form-1, at serial no.3, the entry reads: Record of default with the information utility,if any, while at serial no.8, it was List of other documents attached to this application in order to prove the existence of a financial debt, the amount and date of default. This clearly showcased that a record of default with the IU is not mandatory.
9. Finally, reliance was placed on Director General of Foreign Trade, to contend that a delegated/subordinate legislation can only be prospective and not retrospective, unless the designated rule-making authority has been vested with such powers to make rules with retrospective effect.

4. Respondent’s Submissions:

1. The counsel for the Respondent contended that as per section 424 of the Companies Act, 2013, both the NCLT and NCLAT where vested with the powers to regulate their own procedures. According to him, the order of 12.05.2020 was nothing by the implementation of the mandatory & necessary requirement and compliance of various provisions of the Code.
2. Reliance was placed on the case of Izhar Ahmad Khan v. Union of India, to submit that there are 2 categories of law that are well known i.e., substantive and procedural law wherein evidence is a part of the procedural law. Taking this argument forward, evidence is a part of procedural law that falls within the tribunal’s powers to regulate its own procedure within the ambit of Section 424 of Companies Act, 2013.

5. Analysis:

1. Analysis of powers of NCLT:

1. The Hon’ble High Court took reference to the case of Engineering Mazdoor Sabha v. Hind Cycles Ltd to emphasise that proceedings before Tribunals are required to comply with the rules of natural justice and that their decisions must be consistent with the general principles of law.
2. The Hon’ble High Court also took note of the case of Government of Andhra Pradesh v. P. Lakshmi Devi where the hierarchy of legal nroms in India was noted:

1. The Constitution of India;
2. Statutory law which may be either laws made by parliament or by the state legislature;
3. Delegated Legislation, which may be in the form of rules made under the statute, regulations made under the statute,etcl
4. Purely executive orders not made under any statute.

If a law in higher layer in the above hierarchy clashes with a law in a lower layer, the former will prevail.

3. Relying on the above hierarchy, it was concluded that the hierarchy of laws in the current issues was:

1. Provisions of CA, 2013 and IBC, 2016 as they are acts passed by the parliament;
2. Rules enacted by the Central Government and Regulations enacted by the IBBI under powers granted by Sec.239 and Sec.240 of the IBC;
3. NCLT/NCLAT regulating their own procedure subject to Section 424 of the CA, 2013 and the NCLT/NCLAT Rules, 2016.

4. While dealing with the legal propriety of the impugned order, the Hon’ble High Court referred to the case of General Officer Commanding in chief, wherein, the Court had laid down 2 conditions for a subordinate rule to have the force of a statutory provision:

1. That it must conform to the provisions of the Statute under which it is framed; and
2. It must also come within the scope and purview of the rule making power of the authority framing the rule.

2. Analysis on Statutes, Rules & Regulations:

1. Section 7(3)(a) of the Code clearly states that the financial creditor shall furnish along with the application record of the default recoded with the information utility or such other record or evidence of default as may be specified. The Court mentioned that the clause is disjunctive in nature and when the word “or” is used in drafting of positive conditions, the positive conditions separated by “or” are read in the alternative.
2. The 3 categoeis of evidence that can be provided are as follows:

1. Record of the default recorded with the IU;
2. Such other record;
3. Evidence of default as may be specified.

3. The term ‘as may be specified” is applicable to all the 3 categories and not just to the evidence in default. In view of the court, the intention of the legislature was to make the term applicable to all 3 categories, a comma would have been inserted after the word “default”. Following the principles of literal egis, the Court was of the view that the legislature had no intention to extend the term “as may be specified” to all the 3 categories. There was also no causus omissus and therefore, the Court did not intend to add any punctuation mark to change the intent of the legislature.
4. On the reading of the heading of section 215 of the IBC, 2016, which reads Procedure for submission, etc., of financial information, the court observed that it was trite law that the heading of a section does not limit the section necessarily. However, all factors taken in consonance and on a harmonious reading of section 215 of the IBC, with section 7 of the Code, along with the rules and regulations, the Court came to the conclusion that the legislature did not intend to make it mandatory for the Financial Creditors to submit financial information to the IU.

3. Analysis of Inherent powers of NCLT:

1. The Hon’ble High court opined that the powers of the tribunal cannot rise above their source, that is a delegated form of legislation, and obstruct the operation of a statutory provision of the parent Act under which the rules were formulated in the first place.

4. Analysis on Substantive and Procedural Laws:

1. While relying on the case of Kailash v. Nanhku and Others, where the Supreme Court ruled that while rules of procedure are the handmaid of justice, the object of prescribing procedure is to advance the cause of justice and in an adversarial system, no party should be denied the opportunity of participating in the process of justice dispensation, the High Court ruled that the impugned order had become a facit accompli for the petitioners, which did indeed adversely affect their substantive rights as a financial creditor.

5. Analysis on Retrospective power in a delegated legislation:

1. In the case of Director General of Foreign Trade, it was made clear by the Supreme Court that a delegated or subordinate legislation can only be prospective and not retrospective, unless the rule-making authority has been vested with power under a statute to make rules with retrospective effect.
2. The Hon’ble High Court, upon reading the provisions of Section 240 of the Code, ruled that any delegate, let alone the NCLT, not even the IBBI can make regulations, by way of the impugned order or of such nature, to make a delegated legislation retrospective under IBC, 2016.

6. Order:

1. The impugned order dated 12.05.2020 issued by the principal bench of the NCLT, New Delhi was held to be ultra vires the IBC,2016 and the Regulations thereunder, and was accordingly struck down.

 

1. Committee of Creditors of Educomp Solutions Ltd vs. Ebix Singapore Pte Ltd & Anr. – 29.07.2020

1. Facts:

1. The present application had been filed by the appellant on being aggrieved by the order passed by the Hon’ble NCLT while dealing with a case of withdrawal by a Resolution Applicant in an advanced stage during CIRP.

2. Contentions:

1. The appellant contended that the impugned order was passed in erroneous exercise of jurisdiction by the Adjudicating Authority.
2. It was contended by the Appellant that the adjudicating authority by means of the impugned order had allowed the 1^st Respondent/ ‘successful Resolution Applicant’ to withdraw its ‘Resolution Plan’ which was approved by a majority of 75.36% of the CoC and pending approval before the Authority.
3. The Counsel also contended that the Adjudicating Authority being a creature of statute under IBC, is bound within the 4 corners of the statute and cannot travel beyond its jurisdiction prescribed under the statute and relied on the decisions of B. Himmatlal Agrawal v. Competition Commission of India & Gujarat Urja Vikas Nigam Limited vv. Solar Semiconductor Power Company (India) Private Limited & ors.
4. Reliance was also placed on Committee of Creditors of Essar Steel Limited vs. Satish Kumar Gupta & Ors & K. Sashidhar vs. Indian Overseas Bank, to stress on the ground that an Adjudicating Authority cannot encroach upon the majority decision of the CoC, except on the grounds under sub-section (a) – (e) of section 30(2).
5. It was also contended that as per the RFRP, ‘Resolution Plan’ is irrevocable and a ‘Successful Resolution Applicant’ was not permitted to withdraw the ‘Approved Resolution Plan’.
6. The Resolution Applicant (‘RA’) had conducted its own due diligence and appraisal of the Corporate Debtor (‘CD’) and after receipt of full information relating to the affairs of the CD had submitted its resolution plan to the CoC which was approved after extensive negotiations.
7. The Learned Counsel for the Appellant brought it to the notice of the Tribunal that Section 32A of the ‘I&B’ Code grants immunity to a ‘Resolution Applicant’ from any offences committed by the ‘Corporate Debtor’ prior to the commencement of CIRP and provides certainty to the ‘Successful Resolution Applicant’, that the assets of the ‘Corporate Debtor’ has represented would be available in the same manner as at the time of submission of a ‘Resolution Plan’, which was recognized in the judgement of NCLAT in ‘JSW Steel Limited’ Vs. ‘Mahender Kumar Khandelwal and Anr.’
8. The appellant also distinguished the present case from that of ‘Metalyst Forging Ltd’ by stating that in the case mentioned, there was inadequacy of information in the Information Memorandum whereas in the present case, no such finding was recorded by the Adjudicating Authority.
9. The Respondent on the other hand contended that there was severe mismanagement and gross financial irregularities and fraud in the affairs of the CD during the period from 2014-2018 and this was subsequently uncovered combined with regulatory and criminal investigations into the financial affairs of the CD.
10. The Counsel also contended that the RFRP is like a Request for proposal or an invitation to a tender and that this in no way binds them. The binding nature takes effect only when such an offer is accepted as per its term.

3. Analysis

1. According to the RA, due to the delay in CIRP process, the resolution plan was no longer viable to it and that the profile of the CD may have been altered and or deteriorated significantly and further that the Special Investigating Audit of the Company was subsequently never conducted. For these reasons, it was stated that the Resolution Plan ought to be permitted to be withdraw by it.
2. The aim of ‘Resolution’ is for maximization of the value of Assets of the ‘Corporate Debtor’ and thereby all creditors. The I&B Code defines Resolution Plan as a plan for insolvency resolution of the Corporate Debtor as a going concern. It is to be remembered that no one is either buying or selling the CD through the Resolution plan.
3. Although it was contended by the Resolution applicant that it was at liberty to withdraw from the RFRP after the completion of 6 months from the date of submission of resolution plan, the tribunal held that the adjudicating authority, after approval of the Resolution Plan by the CoC, had no jurisdiction to entertain or to permit the withdrawal application filed by the Resolution Applicant.
4. Although, it is accepted that only on the approval of the Adjudicating Authority, the Resolution Plan is binding on all parties, the Tribunal in very clear words stated that the ‘Adjudicating Authority’, in law cannot enter into the arena of the major decision of the CoC other than the grounds mentioned in sections 32(a to e) of the I&B Code. Moreover, after deliberations, when the 1^st Respondent had accepted the conditions of the Resolution Plan, keeping in mind the ingredients of section 25(2)(h) of the Code to the effect that  no change or supplementary information to the Resolution Plan shall be accepted after the submission date of Resolution Plan, then it is not open to the Resolution Applicant to take a topsy turvy stance and is not to be allowed to withdraw the approved Resolution Plan.
5. Coming to the point where there was a lapse of more than 18 months from the date of submission of the resolution plan and 27 months from the date of CIRP, it was aptly pointed out by the Tribunal that when the orders on approval application were reserved by the Adjudicating Authority, then such delay cannot be taken advantage of by a litigant because of the maxim actus curiae neminem gravabit which is that the act of court shall harm no person – Jang Singh v. Brij Lal.
6. Furthermore, the pending CBI and SFIO proceedings initiated against the CD – in any event, section 32A of the Code grants immunity to the 1^st Respondent in respect of offences committed by the CD before the start of the CIRP.  Therefore, the Respondent taking umbrage of SFIO investigation of the affairs of the CD or the CBI investigation was unworthy of acceptance.
7. During the period from August, 2018 till January 2019 when the orders were reserved by the ‘Adjudicating Authority’ on the approval application, the 1st Respondent/’Resolution Applicant’ took part and, therefore, by any stretch of imagination, it cannot be said that the validity of the ‘approved plan’ was only six months period and such plea was not well founded.

4. Order

1. Appeal allowed with no costs.

 

2. Sh. Sushi Ansal vs. Ashok Tripathi – 14.08.2020

1. Facts:

1. The Appellant in the instant case is the former director and shareholder of M/s. Ansal Properties and Infrastructure Limited. He had preferred the instant appeal against the order of admission of application u/s 7 of the I&B Code, 2016, filed by Mr. Ashok Tripathi and Mr. Saurabh Tripathi claiming to be Financial Creditors.
2. Mr. Ashok and Mr. Saurabh booked dwelling units under a Real Estate Project named ‘Sushant Golf City’ developed at ‘High Tech Township’ in Lucknow. Both of them have jointly booked a unit bearing no.0073 admeasuring 3746 sq.ft with the CD for a total consideration of Rs. 1,62,43,133/- on 5^th August, 2014 and paid an amount of Rs. 8,37,300/- as a booking advance.
3. Mr. Saurabh had booked a separate unit admeasuring 1229 sq.fts with the CD in the same project and paid an amount of Rs. 1,63,994/- as a booking advance.
4. Allotment letters came to be issued by the CD in favour of the allottees and the CD undertook to complete the construction and to deliver possession of the units to allottees within 2 years from the date of commencement of construction on receipt of sanctioned plans from the Authority. The project start date notified on the website of RERA was 22^nd Sept, 2015 and handover date was 22^nd Sept, 2017 and the second unit within 36 months from the date of sanctioning of the building plans.
5. The Respondents 1 & 2 (Mr. Ashok and Mr. Saurabj) alleged that the CD failed to complete the construction of units within the given time frame and abandoned the project midway.
6. On 10^th August, 2019, UP RERA Authority issued a recovery certificate & this was used to establish financial debt and liability of Corporate Debtor.
7. The allottees approached the Adjudicating Authority in the capacity of decree-holders against the default of the financial debt committed by the Corporate Debtor along with penalty as decreed by UP RERA.
8. The NCLAT in the case if Ugro Capital Limited vs. Bangalore Dehydration and Drying Equipment held that the term ‘Creditor’ in I&B Code includes decree-holder and a petition filed for realisation of decretal amount could not be dismissed on the ground that the creditor should have taken steps for filing execution case in civil court.

Issue: Whether the application filed by Respondents 1 & 2 was not maintainable in light of the I&B Code (Amendment) Ordinance, 2019 as  the Respondents did not meet the required criteria viz constitution either 100 allottees or 10% of the total allottes.

2. Contentions:

1. It was urged by the Appellant that no classification of allittees-financaial creditors was permissible and merely because the Respondents obtained a RERA decree in their favour did not alter their status. Allottees under a real estate project continue to be the allottees without any distinction between them and no further classification or demarcation has been made. Therefore, the finding recorded by the Adjudicating Authority that the allottees who have obtained a decree in their favour would not be hit by the requirement of threshold limit under the ordinance followed by Amending Act is flawed.
2. It was submitted on behalf of the Respondents that the Appellant and Respondents have settled all their disputes in relation to the units in dispute and the allottees do not have any pending claims against the CD qua the same. These Respondents accordingly prayed for invoking Rule 11 of the NCLAT Rules, 2016 to set aside the order of admission and terminate Corporate Insolvency Resolution Process against the Corporate Debtor.

3. Analysis:

1. It was observed that the Respondents who are entitled to seek disbursement of the amount from UP RERA upon its recovery, instead filed the application under section 7 of the I&B Code for initiation of CIRP.
2. It was also observed by the Authority that situations in this regard can be in the nature of the allottees being speculative investors or allottees who want to jump the ship on account of recession in the Real Estate market.
3. Under section 65 of the Code, the Real Estate Developer can also point out that the process of insolvency resolution has been invoked with malicious intent or fraudulently – Pioneer Urban Land & Infrastructure Limited & Anr. V. Union of India.
4. Since there were over 283 claims from allottees of different projects, Financial Creditors and Operational Creditors, it was opined by the Authority that it would not be in consonance with the object of I&B Code and purpose of invoking Rule 11 of NCLAT Rules to permit the withdrawal of application on a settlement between the Applicant and the Respondents. It would be inappropriate to allow the settlement with only 2 creditors which may amount to perpetrating of injustice.
5. The dictum of law is loud and clear – an application for initiating a CIRP against a CD by allottees under a Real Estate Project is required to be filed jointly by not less than 100 of such allottees or not less than 10% of the total no.of such allottees under the same project.
6. It is seen that the Respondents have not approached the Adjudicating Authority in the capacity of allottees but in the capacity of decree holders against the default of financial debt committed by the corporate Debtor on account of non-payment of principal amount along with penalty as decreed by UP RERA followed by issuance of Recovery Certificate.
7. The relevant consideration for determining the term “financial debt” would be to see whether the debt was disbursed against the consideration for the time value of money which may include amount raised under a Rea; Estate Project, the transaction deemed to be amount having the commercial effect of borrowing. This case is definitely within the contours of a borrowing as contemplated under sections 5(8)(f) of the I&B Code. However, the case set up by the Respondents is not on the strength of a transaction having the commercial effect of a borrowing, thereby clothing them with the status of ‘Financial Creditors’, but on the strength of being ‘Decree holders’.
8. It having been noticed that before the Adjudicating Authority, the respondents staked claim in the capacity of decree holders and they having approached IP RERA with complaints for refund of money culminating in issuance of a recovery certificate by the UP RERA in terms of order dated 10^th August, 2019, it cannot lie in the mouths of the Respondents that they are the allottees under the Real Estate Project deemed to be having the commercial effect of a borrowing would clothe them with the capacity of being ‘Financial Creditor’. Such argument being absurd and incompatible with their plea before the Authority and the events following filing of complaints before the UP RERA and leading to passage of Recovery Certificate needs to be rejected outright. – Para19.
9. A decree holder is undoubtedly covered by the definition of Creditor under section 3(10) of the I&B Code, 2016 but would not fall within the class of creditors classified as Financial Creditors unless the debt was disbursed against the consideration for time value of money or falls within any of the clauses of financial debt.
10. A decree is defined under section 2(2) of the Code of Civil Procedure, 1908 as the formal expression of an adjudication which conclusively determines the rights of the parties with regard to the matters in controversy in a lis.
11. A decree holder, defined under section 2(3) of the same Code means any person in whose favour a decree has been passed or an order capable of execution has been made.
12. Order XXI Rule 30 of CPC lays down the mode of execution of a money decree. According to this provision, a money decree may be executed either by the detention of judgment-debtor in civil prison, or by the attachment or sale of his property, or by both.
13. Section 40 of RERA lays down the mode of execution by providing that RERA may order to recover the amount due under the Recovery Certificate by the concerned authority as an arrear of land revenue.
14. The Respondents in the instant case, instead of pursuing the matter before the competent authority, sought triggering of CIRP against Corporate Debtor. While answering the question of whether a decree-holder would fall within the ambit of a financial creditor, the NCLAT said that the answer would be an ‘emphatic’ no as the amount claimed under the decree is an adjudicated amount and not a debt that is disbursed against the consideration for the time value of money and does not fall within any of the ambits of the clauses enumerated under Section 5(8) of the I&B Code.
15. While examining the issue of whether execution of decree on the strength of a Recovery certificate issued by the UP RERA would justify triggering of the CIRP at the instance of Respondents or not? The NCLAT has considered the issue in G. Eswara Rao v. Stressed Assets Stabilisation Fund, where it held that an application u/s 7 of the I&B Code cannot be filed for execution of a decree.
16. It was observed that UP RERA which ordered recovery of amount owed to the Respondents, has forwarded the Recovery Certificate to the Competent Authority for effecting recovery in the manner and as an arrear of land revenue from the CD. In the backdrop of this factual situation, Respondents can be safely held to have approached the Adjudicating Authority only with a view to execute the decree in the nature of Recovery Certificate and recover the amount due thereunder. No conclusion other than the one that Respondent Nos. 1 and 2 were seeking execution of the Recovery Certificate issued by RERA and did not file the application under Section 7 of the ‘I&B Code’ for purposes of Insolvency Resolution, would be available in the facts and circumstances noticed hereinabove. This conclusion is further strengthened by the fact that the Recovery Certificate issued by RERA had been forwarded to the Competent Authority for effecting recovery as arrears of land revenue and the process was underway when the Respondents sought the triggering of CIRP against the CD.
17. The findings were recorded as under:

1. Respondents can no more claim to be allottees of a Real Estate Project after issuance of recovery certificates.
2. Respondents are seeking execution of recovery certificate which is impermissible within the ambit of section 7; &
3. Decree-holder, though in the definition of ‘Creditor’, does not fall within the ambit of a financial creditor.

4. Order:

1. All order(s), passed by the Adjudicating Authority appointing ‘Interim Resolution Professional’, declaring moratorium, freezing of account, and all other order (s) passed by the Adjudicating Authority pursuant to impugned order and action, if any, taken by the ‘Interim Resolution Professional’, including the advertisement, if any, published in the newspaper calling for applications all such orders and actions were declared illegal and were set aside.
2. The application preferred by Respondent Nos.1 and 2 under Section 7 of the ‘I&B Code’ was dismissed.

 

1. State Bank of India vs. Anil Dhirajlal Ambani - Mumbai Bench – 20.08.2020

1. Facts:

1. The present case deals with the application for appointment of Resolution Professional in accordance with section 97(3) of the Insolvency & Bankruptcy Code, 2016 (I&B Code).[2]
2. Reliance Communications Limited (RCOM) in or around 2015-2016 approached the Financial Creditor – State Bank of India, seeking credit facilities to a tune of Rs. 565,00,00,000/- (Rupees Five Hundred and Sixty-Five Crores) for the purpose of repayment of certain existing financial indebtedness.
3. Another company, Reliance Infratel Limited (RITL), which is one of the sister concerns of RCOM also approached the Financial Creditor for a credit facility to the tune of Rs. 635,00,00,000/- (Rupees Six Hundred and Thirty-Five Crores) for the repayment of existing financial indebtedness.
4. The Financial Creditor under Rupee Loan Facilities Agreement dated 29.08.2016 as amended and restated on 08.09.2016, provided the aforesaid amounts to RCOM and RITL.
5. The Respondent is the chairman of the Reliance ADA Group which is the umbrella organisation under which RCOM & RITL functioned. The Respondent, along with other securities, provided personal guarantee under a personal guarantee deed in favour of the Financial Creditor.
6. Subsequently, in 2017, both RCOM & RITL committed defaults and the accounts were retrospectively declared as Non-performing Account (NPA) with effect from 26.08.2016.
7. On 31.01.2018[3], the Applicant invoked the personal guarantee and issued invocation notice. Despite correspondences, no repayment on behalf of the Respondent had been made.
8. Respondent had provided personal guarantee to various other banks without obtaining the consent of the Financial Creditor. The Chinese Banks have initiated recovery proceedings against the Respondent in the United Kingdom. The Commercial Division of the Hon’ble High Court of England and Wales by an order dated 22.05.2020 has directed the Respondent to pay an amount of Rs. 5447,53,29,750/- within 21 days.

2. Contentions:

1. The Respondent contested that Axis Trustee Services Limited was appointed as the security for both credit facilities, and that it was the understanding between the Financial Creditor and Personal Guarantor, that the Corporate Guarantee provided by RITL, Reliance Communications Infrastructure, RCOM and Reliance Telecom would be invoked before invoking personal guarantee.
2. The Advocates of RCOM intimated to the Applicant that in view of the ongoing CIRP of RCOM and RITL, the liabilities under the resolution plan approved under the code pursuant to which the Personal Guarantee will be rendered redundant, more so in view of the understanding that personal guarantee would not be invoked until the other guarantees had been invoked.
3. The Respondent also contested that in the case of RCOM, a Resolution Plan was submitted by UV Asset Reconstruction Private Limited and was approved by the CoC with 100% voting share. It was stated that there was no urgency of the current petition since the resolution plan of UV Asset Reconstruction Company should be able to discharge the entire financial debt of RCOM to the Applicant and other lenders.
4. It was also submitted by the Respondent that while the Resolution Plans for the Corporate Debtors are pending consideration, it would be prudent not to proceed against the Personal Guarantor. Reliance in this connection was placed on the observations of the Hon’ble NCLAT in Dr. Vishnu Kumar Agarwal v. M/s. Piramal Enterprises Limited. This was contested by the Financial Creditor on the grounds that suspension of the present proceedings would be anathema to the scheme of the Code – Reliance was placed on Gauri Shankar Jain v. Punjab National Bank and State Bank of India v. Ramakrishnan.

3. Analysis by the Tribunal

1. Section 60(2) of The Code provides that proceedings against the Personal Guarantor can simultaneously be filed.
2. When the law mandates that a particular proceeding can be initiated, it would be preposterous to think that after initiation of the proceedings the Authority, before whom it is filed, would not act upon such Petition/Application and would not do anything about it until some subsequent event happens. If that were the intention of the legislature, a provision for imitation of proceedings wouldn’t have been made in the first place.
3. In Piramal Enterprises, the Hon’ble NCLAT had no occasion to consider the effect of CIRP on a Personal Guarantor. Besides, the judgments impugned in the Appeals related to dates prior to the amendment dated 6^th June 2018 of the Code. The decision accordingly would not be made applicable to the case at hand.
4. The Tribunal referred to the case of Gauri Shankar in a similar matter where the Hon’ble High Court of Calcutta framed the issue: “Whether the liability of a guarantor of a debt of a corporate debtor stands reduced/extinguished upon an Insolvency Resolution Plan in respect of the Corporate Debtor, being approved un the Insolvency & Bankruptcy Code, 2016?”
5. While placing reliance on the decision of the Hon’ble Apex Court in Maharashtra State Electricity Board v. Official Liquidator which states:

“28. The Supreme Court in Maharashtra State Electricity Board,

Bombay (supra) has held that, a discharge which the principal debtor may secure by operation of law in bankruptcy or in liquidation proceedings in the case of a company does not absolve the surety of his liability. In such case, the Supreme Court has considered the interplay of sections 128 and 134 of the Act of 1872. In the facts of that case, a company in respect of which a bank issued a guarantee in favour of the Electricity Board, went into liquidation. The Supreme Court has held that, the fact that the company which is the principal debtor has gone

into liquidation would not have any effect on the liability of the guarantor.

xxx xxx xxx

30. The Supreme Court in Canonnore Spinning and Weaving Mills Ltd (supra)2 has considered discharge of liability of a guarantee under the provisions of section 141 of the Act of 1872. It has held that, a definite volition on the part of the creditor is required to take place for the guarantor to stand discharged in terms of section 141 of the Act of 1872. It has held that, the liability of the guarantor cannot but be stated to be a strict liability and even if the principal debtor is discharged from his liability unless such discharge is through the act of the creditor without consent of the surety/guarantor, the creditor's right of action against the surety is preserved.”

6. The principle thus laid down applies on all fours to the case at hand. In view of such authoritative pronouncement by the Hon’ble Apex Court, it is clear that notwithstanding pendency of the Resolution Plans, the personal guarantor can be proceeded against under section 60(2) r/w sections 95 and 97(3) of the Code.
7. The law does not envisage that the insolvency resolution of personal guarantor should follow only when the process of corporate insolvency resolution of the corporate debtor has come to an end. A plain reading of the provision would indicate that while an application for CIRP or liquidation of corporate debtors are pending before the authority, an application against the personal guarantor shall have to be filed.
8. When an application is filed by a Creditor under section 95(1) of the Code, the Adjudicating Authority shall within 7 days of filing the application, direct the Board to nominate a resolution professional for the insolvency resolution process. The use of the word “shall” itself indicates the urgency with which the Application needs to be dealt with.

4. Order:

1. Allowed both the I.A.s filed in part on contest,
2. Mr. Jitender Kothari was appointed as the Resolution Professional under section 97(4) of the Code read with rule 8 of the I&B (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors) Rules, 2019.

 

 

2. SBER Bank vs. Vaarsana Ispat Limited (in Liquidation) -Kolkata Bench – 22.07.2020

1. Facts:

1. The Application was filed by the Liquidator of Vaarsana Ispat Limited under sections 60(5) and 32A of the I&B Code, 2016, seeking permission to sell the assets of the CD which were attached by the Respondent/ED in view of section 32A inserted by the Insolvency & Bankruptcy Code (Amendment) Act, 2020.
2. The Liquidator submitted that he intends on selling the CD as a going concern and that has been hampered due to the attachment as no one is willing to bid for the company despite several interested parties approaching him.

2. Contentions:

1. The counsel for the ED objected the application on 3 grounds:

1. He submitted that only after the liquidation process is over or resolution plan is approved, then alone an application u/s 32A can be made.
2. He submitted that no application can be filed by the Liquidator u/s 32A and such an application can only be filed by a successful resolution applicant. To further this point, reliance was placed on Leo Meridian Infrastructure Project vs. Andhra Bank, where it has been found that Section 32A is applicable only upon resolution plan having been finally approved – once the resolution plan was approved and then protection granted.
3. Proceedings are going on before PMLA Appellate Authority which is attended by the Liquidator and the challenge against the attachment became final and therefore, even if provisions of the Code are amended if the right of the parties had already been crystallized then, subsequent change in law would not take away such rights which had attained finality.

3. Analysis:

1. No ratio has been set up by the Hon’ble NCLT, Hyderabad declaring that the 32-A is only applicable to in a matter where a resolution plan is passed. The facts in the said case are entirely different from the instant case.
2. What is prayed for in the case at hand is not for releasing the attachment. According to the Liquidator, de-attachment is not at all necessary because 32-A provides immunity against prosecution of the Corporate debtor and preventing action against the property of such corporate debtor undergoing CIRP or liquidation. According to him, the effect of attachment of the properties of the CD is to be nullified upon applying section 32-A and de-attachment if any is to be asked for by the buyer and not the liquidator.
3. A combined reading of section subsection (2) of Section 32-A with the object behind the introduction, the Tribunal was of the opinion that 32-A is also applicable to liquidation proceedings.
4. The Respondent also contended that the order of attachment has reached finality. However, the Tribunal was of the opinion that the Liquidator did not pray for de-attachment in the present case but prayed for a relief to proceed with the sale of the assets which were under attachment in view of the non-obstante clause as provided under section 32-A.
5. The properties of a CD under liquidation is also to be exempted from the purview of the commission of offences. In view of the said position of the law, the tribunal was of the view that a liquidator can proceed with the sale of the assets even if it is under attachment by respondent, to continue the time bound process of liquidation under the provisions of the code, and upon completion of the sale proceedings, the buyer can take appropriate steps to release the attachment.

4. Order:

1. Liquidator was directed to sell the assets;
2. Respondents were directed to render as much co-operation to the liquidator to proceed with the sale of the assets.

 

 

3. Siva Rama Krishna Prasad vs. Krishna Industrial Corporation Limited – Chennai Division Bench – 1 – 27.07.2020

1. Facts:

1. The application had been filed by the erstwhile promoter/Director of the Corporate Debtor under section 60(5)(c) of the I&B Code to keep the liquidation application in abeyance pending disposal of instant application.

2. Contentions:

1. It was contended by the Applicant that the debt was only 25 crores and the assets were 30 Crores. So, the Debt to Asset ratio in relation to the CD was less and that the Applicant is very much willing and able to settle the creditors of the CD.
2. Reliance was also placed on Sunil Kumar Agarwal, RP of Digjam vs. Suspended Board of Directors of Digjam where it was stated that Liquidation should only be an exception and Resolution should be the norm.

3. Analysis:

1. The Tribunal referred to the judgment of NCLAT in the matter of Abhishek Aggarwal vs. Mr. Alok Kumar Agarwal & Ors where the appellant in the said case has challenged the Liquidation order on the ground that settlement discussions were in progress. The Hon’ble NCLAT had very clearly stated that “section 33(2) of the Code, at any time during the CIRP, but before the confirmation of the Resolution Plan, when the Resolution Professional intimates the Adjudicating Authority of the decision of the Committee of Creditors (approved by not less than 66% of voting share) to liquidate the Corporate Debtor, the Adjudicating Authority shall have to pass an order of liquidation.”
2. While referring to the judgment of the Hon’ble Supreme Court in Committee of Creditors of Essar Steel India-Limited vs. Satish Kumar Gupta & Ors., the Tribunal relied on the para which stated that the Adjudicating Authority would not be vested with the discretion to apply what was applied by the Committee of Creditors.
3. Even during the Liquidation Process, subject to Section 29A of the I&B Code, 2016 and as per Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016, a 90 day time period is provided to the Applicant to submit a scheme as contemplated under Section 230 of the Companies Act, 2013 and if the applicant is otherwise found eligible can very well submit a scheme for the revival of the CD.

 

In the matter of Rajneesh Singhvi – 24^th August, 2020.

1. Facts:

1. The IBBI, on 21^st May, 2020 had issued a Show Cause Notice (SCN) to Mr. Rajneesh Singhvi based on material available on record, in respect of his role as an interim resolution professional/ resolution professional in appointing unregistered valuer Mr. Abhishek Ahuja in the CIRP of M/s Arjun Ispat India Private Limited.
2. Alleged contraventions:

1. Section 208(2)(a) & (e) of I&B Code, 2016,
2. Regulations 7(2)(a),(h) & (i) of IBBI (Insolvency Professionals) Regulations, 2016,
3. Code of Conduct under regulation 7(2) thereof,
4. Regulation 27 of the IBBI (Insolvency Resolution Process for Coprorate Persons) Regulations, 2016, &
5. IBBI Circular No. IBBI/RV/019/2018 dated 17^th October 2018.

2. Submissions:

1. It was submitted by Mr. Singhvi that he got reference of Mr. Abhishek Ahuja  from a co-professional and appointed him when Mr. Ahuja provided him relevant marksheet and certificate of passing of the valuers examination and represented that he was registered with the Board.
2. The fact that the said valuer was not registered with the Board at the time of his appointment was learnt by Mr. Singhvi later when the said valuer provided him the copy of his registration certificate dated 31^st July, 2019.
3. The Counsel for Mr. Singhvi mentioned that the CIRP commencement date was 2^nd January 2019 and the IBBI circular mandating appointment of only RVs came into effect on 1^st February 2019. At that time, very limited no.of RVs were available and some of them quoted very high fees. Keeping in view that there was no business in the CD, it was not feasible to appoint valuers with heavy costs.
4. The Counsel (Mr. Dhir) further submitted that the valuation given by the said valuer is similar to the one given by another RV, Mr. Saxena, which denotes that effectively there has been no wrong valuation, hence no loss has been caused to the CD or its value.
5. It was submitted by him that Mr. Singhvi acted in bona fide manner without violation of regulation 27 of CIRP regulations while appointing the valuers. Prayer was made for dropping of the charges levied upon Mr. Singhvi vide the SCN issued by the Board.

3. Analysis and Findings by the DC:

1. The provisions of the Code and regulations are spelt out in a plain and unambiguous language. The duties of the IRP/RP are provided in various provisions of the Code, e.g., section sections 17,18, 20, 23, 25, 28, 30 and 208. Section 25 (2) (d) of the Code empowers the resolution professional (RP) to appoint accountants, legal or other professional in the manner as specified by the Board. The requirement of appointment of two registered valuers for determination of the fair value and liquidation value of the any corporate debtor and manner of their appointment is provided in regulation 27 of CIRP Regulations.
2. The certificate of registration granted to an IP is subject to the condition that he should follow at all times the provisions of the Code and Regulations and the bye-laws of Insolvency Professional Agency of which the IP is a member and also follow the Code of Conduct specified in the First Schedule to the IP Regulations.
3. It is, further observed that the IBBI Circular No. IBBI Circular IBBI/RV/019/2018 dated 17th October 2018 (which came into effect from 1st February 2019) clearly stated that no person other than a RV will be appointed to conduct valuation under the Code, the IP appointed a person who was not registered as an RV as on date of his appointment.
4. From a bare reading of the provisions of the Code and the Regulations and circular made thereunder, it is clear that it is the duty of the RP to appoint registered valuers within 7 days of his appointment, but not later than 47^th day from the insolvency commencement date to determine the fair value and liquidation value of the CD. The Board further clarified in explicit terms through the said circular that no insolvency professional shall appoint a person other than a registered valuer to conduct any valuation under the Code or any of the regulations made thereunder.
5. In the present matter, the DC noted that Mr. Singhvi failed to appoint registered valuer by the 47^th Day of the insolvency commencement date and engaged a valuer who was not registered with the Board. It was the duty of Mr. Singhvi to have verified the Valuer’s credentials at the time of appointment. The DC also took note of Mr. Singhvi’s actions of revoking the appointment of M/s. RR & Company and M/s R.K. Associates as they were not registered with the Board. Thus, in appointing an unregistered valuer, Mr. Singhvi violated the provisions of section 208(2)(a) and (e), clause (h) of regulation 7(2) of IP regulations and clause 10 of the Code of Conduct under IP regulations.
6. The contention of Mr. Singhvi’s acts being bonafide were not accepted as the appointment of unregistered valuers is expressly in contravention of regulation 27 of CIRP regulations.
7. As regards to the plea that the circular issued was only in force from 1^st February, 2019, it was noted by the DC that the provision for appointment of registered valuers was amended in 2018 and to provide for appointment of RVs by RP in 7 days but no later than 47^th day from insolvency commencement date. The said circular emphasized that IP needs to appoint only registered valuer to conduct any valuation under the Code or any of the regulations in view of the provisions of not only regulation 27 of the CIRP Regulations but also in view of the transitional provisions as provided in rule 11 of the Valuers Rules (with effect from 18.10.2017 and amended from time to time) which provided vide latest amendment that unregistered valuers engaged for valuation in CIRP of various CDs, prior to the coming into force of the Valuer rules, can continue up to 31st January 2019 without certificate of registration and complete their valuation and further provided three months more time thereafter where valuers being appointed before 31st January 2019 to complete the valuation.
8. A professional means someone possessing special domain knowledge and skill to lay down the benchmark and to ensure competence and credibility. The valuation by an unregistered valuer may adversely affect the credibility of whole CIRP and the resolution based on such valuation.

4. Order:

1. Mr. Rajneesh Singhvi was prohinited from seeking and accepting any process or assignment or render any services under the Code for a period of 3 months from the date of coming into force of the order;
2. He was permitted to conduct and complete the assignments/processes he has in hand as on the date of his order;
3. The order shall come into force on expiry of 30 days from the date of its issue.