Non Impleadment Of Owner As Party By Liquidator In Application U/S 19 Of IBC Not Malafide If Ownership Was Uncertain: NCLAT
Mohd Malik Chauhan
21 Dec 2024 1:10 PM IST
The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Barun Mitra (Technical Member) has held that non impleadment of the owner in application under section 19 of the code filed by the liquidator due to the uncertainty over the ownership of the premises cannot be termed malafide.
Brief Facts
The Corporate Debtor-Gujarat NRE Coke Ltd. had been admitted into liquidation on 11.01.2018 and the present Respondent-Mr. Sumit Binani was appointed as the liquidator. The liquidator sought to have access to the office premises of the Corporate Debtor and for this purpose had sent a communication on 08.06.2020 to the father of the Appellant-Ms. Kavita Jagatramka seeking access to the office of the Corporate Debtor under liquidation following which request, the office premises was opened by the Appellant on 10.06.2020.
However, on 01.07.2020, the liquidator filed Section 19(2) application under IBC seeking directions of the Adjudicating Authority for the impleaded parties to extend co-operation in allowing access to the liquidator to the office premises of the Corporate Debtor.
The Adjudicating Authority, on 17.07.2020, after considering the Section 19 application filed by the liquidator directed the impleaded parties and/or the owner of the premises, whosoever was in the possession of the keys of the office premises to handover the keys to the Liquidator.
Since the order of the Adjudicating Authority on the Section 19 application dated 17.07.2020 was without the knowledge of the Appellant as she was not arrayed as a party, the Appellant filed an IA seeking clarification/modification of the said order.
Before the application for clarification/modification could be heard, the Respondent- Liquidator on 31.07.2020 proceeded to file a contempt petition vide IA No. 694 of 2020 against the Appellant for violating the order dated 17.07.2020. The Adjudicating Authority on 14.08.2020 had directed the Appellant to show cause as to why Rule should not be issued against the Appellant.
The Appellant thereafter filed Company Appeal No. 724-725 of 2020 before this Tribunal on 16.08.2020 against the orders of the Adjudicating Authority dated 17.07.2020 and 14.08.2020. This Tribunal after hearing the matter had set aside the impugned orders of 17.07.2020 and 14.08.2020 as erroneous and unsustainable on 02.02.2021.
Yet, the Liquidator-Respondent continued to press for hearing of the contempt petition. In the contempt petition, the Appellant filed their reply-affidavit on 08.09.2020 to which the Respondent filed their rejoinder.
Contentions:
The appellant submitted that the liquidator being an officer appointed by the Adjudicating Authority was bound to state the truth. However, by making false statements in their reply affidavit, the liquidator had committed an offence punishable under the IPC.
It was also argued that inspite of such glaring acts of perjury, the Adjudicating Authority in the impugned order abstained from returning its findings on the fact as to whether the liquidator had pressed false and misleading statements before it.
On other hand, the respondent submitted that the Adjudicating Authority did not have jurisdiction to adjudicate on the allegation of perjury and had therefore taken the correct decision of not entertaining the prayer of the Appellant to entertain the changes of perjury against the liquidator.
Finally, it was submitted that it is misconceived on the part of the Appellant to contend that the liquidator was aware about the ownership status of office premises of the Corporate Debtor.
Observations:
The tribunal after going through the sequence of events, noted that the liquidator made a lot of effort by sending correspondences to the KMPs of the Corporate Debtor to identify the custodians of the keys and the whereabouts of the owner of the office premises of the Corporate Debtor. Inspite of these endeavours, the liquidator did not succeed in laying his hands on the keys or in getting correct information about the owner of the office premises of the Corporate Debtor.
It further added that this stalemate compelled the liquidator to file a Section 19 application before the Adjudicating Authority. Since the liquidator only had knowledge about the KMPs of the Corporate Debtor but did not have credible and authentic information about the actual owner, it was logical on their part not to have arrayed the Appellant as a party in the Section 19 application.
In light of the above discussion, the tribunal observed that “In the given circumstances, to read or impute motives behind the reason for omission in including the Appellant as a party in the Section 19 application may not be fair. In our considered opinion, therefore, the Adjudicating Authority did not err in giving the benefit of doubt to the liquidator in having made the aforesaid omission.”
It also observed that It would also not be correct to hold that the liquidator had fool-proof information about the interest of the Appellant with regard to ownership of the office premises of the Corporate Debtor at the time of filing the contempt application.
The tribunal also noted that moreover, the inclusion of the Appellant in the contempt application done by the liquidator was because the Adjudicating Authority had passed orders in the Section 19 application directing that the owner of the premises or whosoever is in possession of the keys of the office premises shall handover the keys to the liquidator immediately.
Finally, the tribunal concluded that “in the given backdrop, we are of the considered view that the impugned order does not warrant any interference by this Tribunal in the exercise of its appellate jurisdiction.”
Case Title: Kavita Jagatramka Versus Mr. Sumit Binani
Case Number: Company Appeal (AT) (Insolvency) No. 1889 of 2024
Judgment Date: 20/12/2024
