National Company Law Appellate Tribunal (NCLAT): The Coram of Anant Bijay Singh, J. (Judicial Member) and Shreesha Merla (Technical Member) while allowing an appeal closed insolvency proceedings against Oyo and its subsidiary, OYO Hotels and Homes Private Limited (OHHPL), while disallowing the intervention of external parties including Federation of Hotel & Restaurant Associations of India (FHRAI).
The instant appeal against the Order of Admission of Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed by the Operational Creditor, R.K. Yadav. He had claimed that OHHPL defaulted on a payment of Rs. 16 lakh. Thus the consequential directions, in the nature of passing of moratorium, and appointment of Interim Resolution Professional (IRP) in the impugned order of the NCLT Ahmedabad were assailed through the appeal.
The Tribunal after considering the submissions put forth, evidences and the cases referred to by the parties, was of the opinion that the due amount payable by the Corporate Debtor to the Operational Creditor was paid in full and final satisfaction. The Tribunal relied on Swiss Ribbons Pvt. Ltd. v. Union of India, (2019) 4 SCC 17, for exercising Rule 11 of the NCLT Rules, 2016, and thus allowed the application of withdrawal.
The Tribunal stated,
“We are of the considered view that before Constitution of Committee of Creditors (CoC) mere filing of a ‘Claim’ does not constitute a default per se. It is only on the basis of the ‘Claims’ that the CoC is constituted. In a catena of Judgments, the Supreme Court has reiterated that the prime objective of the Court is not recovery, but revival”.
It further stated that,
“…To reiterate, we are of the view that in the interest of Justice, the inherent powers under Rule 11 can be exercised by both NCLT and NCLAT which may allow or disallow the Application of Withdrawal keeping in view the interest of the concerned parties and the facts of each case…”.
And freed Oyo and its subsidiary from all ‘the rigours of law’ while allowing it to function independently through its Board of Directors with immediate effect. Also, during the pendency of IA 815 of 2021, several Intervention Applications were filed by the proposed Intervenors, the tribunal while allowing IA 815 of 2021 dismissed the others.
However, the Tribunal even made it clear that the
“…Order will not come in the way of any Financial/Operational Creditors to move an Application for CIRP before the Learned Adjudicating Authority, Which shall hear the matter, uninfluenced by observations, if any, made in this Judgment and proceed in accordance with law”.
[Anuj Tejpal v. Rakesh Yadav, Company Appeal (AT) (Insolvency) No. 298 of 2021, decided on 7-07-2021]
Agatha Shukla, Editorial Assistant has reported this brief.
Counsel for the Appellant:
Mr. Mukul Rohatgi, Sr. Advocate alongwith Mr. Abhijeet Sinha, Mr. Jeevan Ballav Panda, Ms. Shalini Sati Prasad, Ms. Meher Tandon, Mr. Satish Padhi, Mr. Gaurav Sharma, Ms. Shreya Agarwal, Mr. Ishan Nagar, and Mr. Harsh Kaushik.
Counsel for the Respondents:
Mr. Rakesh Yadav (in person), Mr. Kumar Anurag Singh, Mr. Srinivas Kotni, Mr. Shantam Gorawara and Mr. Zain A Khan, for R-1. Mr. Keyur J. Shah and Ms. Noopur K Dalal, for IRP (R-2).
Proposed Intervenors:
Mr. Pankaj Jain, for I.A. 941 of 2021. Ameya Ranade, for I.A. 956 of 2021. Mr. Mohit Chaudhary and Ms. Garima Sharma, for I.A. 957 of 2021. Mr. Ramchandra Madan and Mr. Rahul Gupta, for I.A. 1082, 1083, 1084, 1085 & 1086 of 2021. Mr. Krishnendu Datta, Sr. Advocate alongwith Mr. Samer Parekh, Mr. Sumit Goel, Ms. Sonal Gupta and Ms. Malvika Bhenot, for I.A. 1094 of 2021. Mr. Salvador Santosh Rebello, for I.A. 1116 of 2021. Mr. Debesh Panda, for Diary No. 27487 & 27488. Ms. Mithali Gupta, Mr. Raghav Sharma, Ms. Anukriti Dua, Mr. Mukesh Suhkhija, Mr. P.S. Ghai, Mr. Paras Mithal and Mr. Carlos De Sousa.