NATIONAL COMPANY LAW APPELLATE TRIBUNAL

AT CHENNAI
(APPELLATE JURISDICTION)

IA No. 696 of 2022

in
Company Appeal (AT) (CH) (INS.) No. 325 of 2022

In the matter of :

Asset Reconstruction Company

(India) Limited,
Rep. by its Authorized Representative
and Chief Manager, Mr. V. Ragothaman,
The Ruby, 10th Floor, 20 Senapati Bapat
Marg, Dadar (West), Mumbai – 400028 … Petitioner / Appellant
v.
Mr. Ebenezar Inbaraj,
Resolution Professional of
M/s. Regen Powertech Private Limited,
Sivanandam, 1st Floor, New No. 1,
Pulla Avenue, Shenoy Nagar,
Chennai - 600030 ... 1st Respondent / Respondent
Mr. Madhusudhan Khemka,
Suspended Board of Directors
of M/s. Regen Powertech Pvt. Ltd.
and Regen Infrastructure and
Services Pvt. Ltd.,
Y-202, Anna Nagar, Chennai–600040 ... 2nd Respondent / 1st Respondent

Mr. Sundaresh Ramanathan,

Suspended Board of Directors
of Regen Powertech Pvt. Ltd.
and Regen Infrastructure and
Services Pvt. Ltd.,
No.3, A & B, Sarangapani Street,
T. Nagar, Chennai – 600017 ... 3rd Respondent / 2nd Respondent

IA No. 696 of 2022 in Comp. App (AT) (CH) (INS) No. 325 of 2022
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M/s. Regen Infrastructure and
Services Pvt. Ltd.,
Represented by its Resolution Professional
Ms. Renuka Devi Rangaswamy,
Sivanandam, 1st Floor, New No.1,
Pulla Avenue, Shenoy Nagar,
Chennai - 600030 ... 4th Respondent / 3rd Respondent

Present:
For Petitioner / : Mr. E. Om Prakash, Senior Advocate
Appellant For Mr. V.V. Sivakumar & Mr. Chetan Sagar,
Advocates

For Respondent No.1 : Mr. P.H. Arvindh Pandian, Senior Advocate

For Mr. A.G. Sathyanarayana, Advocate

ORDER
(Virtual Mode)

Justice M. Venugopal, Member (Judicial):

IA No. 696 of 2022 in Comp. App (AT) (CH) (INS.) No. 325 of 2022:

‘Heard’, the Learned Counsel for the ‘Petitioner’ / ‘Appellant’ and

the Learned Counsel for the ‘1st Respondent’.

Petitioner / Appellant’s pleas:

2. According to the Learned Counsel for the ‘Petitioner’/ ‘Appellant’,

the ‘Petitioner’/ ‘Appellant’, is a `recognised Financial Institution’, within

the meaning of Section 2(h) (ia) of the ‘Recovery of Debts and

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Bankruptcy Act, 1993’, as well as, a ‘Secured Creditor’, coming within

the meaning of Section 2 (1) (zd) (iii) of the ‘SARFAESI Act, 2002’.

3. The Learned Counsel for the ‘Petitioner’/ ‘Appellant’, points out

that the `L & T Investments Limited’ (“the Original Lender”), along with

`L & T Infra Investment Partners’, had provided the `Financial

Assistance’ (Facility) to M/s Regen Infrastructure and Services Private

Limited (‘RISPL’/ ‘4th Respondent), by subscribing to `Optionally

Convertible Debentures’ (`OCDs’), issued by the ‘4th Respondent’ /

‘RISPL’, amounting to Rs.349.40 Crores. In fact, the `Original Lender’,

had subscribed to `OCDs’, amounting to Rs.269.40 Crores and `L & T

Infra Investment Partners’, had subscribed to `OCDs’, amounting to Rs.

80 Crores.

4. The Learned Counsel for the ‘Petitioner’/ ‘Appellant’, brings it to

the ‘Notice’ of this ‘Tribunal’, that, the ‘Facility’/ ‘OCDs’, are secured,

inter alia, by ‘Mortgage’, over the `4th Respondent’s ‘Leasehold Rights’,

of the `Five Immovable Properties’, along with the ‘Plant and

Machineries’, owned by the `4th Respondent’ and the ‘Corporate

Guarantee’, excluded by the 1st Respondent. Indeed, the aforesaid ‘Debt’

and `Security’, were assigned by the `Original Lender’, to the ‘Petitioner’/

‘Appellant’, through a `Registered Deed of Assignment’, dated

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12.03.2021 and as visualised, under `Section 5 (1) (b) of the SARFAESI

ACT, 2002’.

5. Advancing his ‘Argument’, the Learned Counsel for the

‘Petitioner’/ ‘Appellant’, points out that the ‘1st Respondent’/ ‘Petitioner’,

had projected an IA(IBC)/400(CHE)/2021, in IBA/1099/2019, before the

‘Adjudicating Authority’/ ‘National Company Law Tribunal, Division

Bench – II, Chennai’ (under Section 49 r/w Section 45(2) of the

‘Insolvency and Bankruptcy Code, 2016’), seeking to, nullify the

aforesaid `Security Interest’, created to and in favour of the ‘Petitioner’/

‘Appellant’ and ‘L & T Infra Investment’.

6. The grievance of the ‘Petitioner’/ ‘Appellant’, is that the

‘Adjudicating Authority’ (`National Company Law Tribunal, Division

Bench – II, Chennai’), without considering the ‘Concept of Relief

Period’, mentioned under Section 46 (1) (i) and /or Section 46 (1) (ii) and

without considering the ‘Contentions’/ ‘Objections’, raised by the

‘Suspended Directors’ (`2nd and 3rd Respondents), in regard to the

‘Authenticity’ of Transaction’, entered into among the 1st and 4th

Respondents, and without looking into the `Ingredients of Section 49’, in

proper and real perspective, had proceeded, to allow the

IA/400(CHE)/2021 in IBA/1099/2019, on 30/05/2022.

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7. Expatiating his submission, the Learned Counsel for the

`Petitioner’ / ‘Appellant’, forcefully comes out with a plea that the

‘Petitioner’/ ‘Appellant’, being a ‘Secured Financial Creditor’ of the ‘1st

and 4th Respondents’ / ‘Corporate Debtors’, although, not arrayed as

`Parties’, in the ‘Impugned Application’, is ‘Affected’ and ‘Aggrieved’,

by the ‘Impugned Order’, dated 30/05/2022.

8. The Learned Counsel for the ‘Petitioner’/ ‘Appellant’, proceeds to

take a stand, that the ‘Impugned Order’, made in

IA(IBC)/400(CHE)/2021 in IBA/1099/2019, is ‘detrimental’, to the

‘Lenders’ of the 4th Respondent, given that a valid `Hypothecation’ /

`Mortgage’, was created, in favour of the ‘Petitioner’/ ‘Appellant’, and

the ‘Other Lenders’, and are entitled to, enforce the ‘Security Interest’,

created, in its favour.

9. The Learned Counsel for the ‘Petitioner’/ ‘Appellant’, contends

that the effect of the ‘Impugned Order’, passed by the ‘Adjudicating

Authority’ / ‘National Company Law Tribunal, Division Bench – II,

Chennai’, in IA(IBC)/400(CHE)/2021 in IBA/1099/2019, dated

30/05/2020, is that the ‘Lenders’ of the `1st Respondent’, will hold the

charge to the exclusion of the `Lenders’ of the `4th Respondent’, and in

fact, the ‘Petitioner’/ ‘Appellant’, had lost the means, to enforce its

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`Security Interest’, for recovery of its `Outstanding Dues’, aggregating in

all, a sum of Rs.238,17,94,723/-, as of 27/12/2019.

10. The Learned Counsel for the ‘Petitioner’/ ‘Appellant’, therefore,

prays for ‘Granting of Leave’, to the ‘Petitioner’ / ‘Appellant’, to prefer

the instant Company Appeal (AT) (CH) (Ins) No. 325 of 2022, before this

‘Tribunal’, in furtherance `Substantial Cause of Justice’.

11. The Learned Counsel for the ‘Petitioner’ / ‘Appellant’, relies on the

decision of the Hon’ble Supreme Court in `Adi Pherozshah Gandhi v.

H.M. Seervai, Advocate General of Maharashtra, Bombay’, reported in

1970 (2) SCC Page 484 at Spl Page 489, wherein, at Paragraphs 6 and 7,

it is observed as under:

6. ``The expression `person aggrieved' is not new, nor has it

occurred for the first time in the Advocates Act. In fact it occurs in
several Indian Acts and in British Statutes for more than a hundred
years. In the latter a right of appeal to a `person aggrieved' is
conferred in diverse contexts. It occurs in the Ale House Act, the
Bankruptcy Acts, Copyright Act, Highway Act, Licensing Acts, Milk
and Dairies (Amendment) Act, Rating and Valuation Act, Summary
Jurisdiction Act, Union Committee Act, Local Acts, in certiorari
proceedings and the Defence of Realm Regulations to mention only
a few. The list of Indian Acts is equally long.

7. As a result of the frequent use of this rather vague phrase, which

practice, as Lord Parker pointed out in Ealing Corporation v.
Jones1, has not been avoided, in spite of the confusion it causes,
selections from the observations of judges expounding the phrase in
the context of these varied statutes were cited before us for our

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 acceptance. The observations often conflict since they were made
in different contexts and involved the special standing of the party
claiming the right of appeal. Yet these definitions are not entirely
without value for they disclose a certain unanimity on the essential
features of this phrase, even in the diversity of the contexts. The
font and origo of the discussion is the well-known definition of the
phrase by James L.J. In Re Sidebotham Ex p. Sidebotham2. It was
observed that the words `person aggrieved' in Section 71 of the
Bankruptcy Act of 1869 meant: "

``not really a person who is disappointed of a benefit

which he might have received, if some order had been made.
A `person aggrieved’, must be a man who had suffered a
legal grievance, a man against whom a decision has been
pronounced which had wrongfully deprived him of
something, or wrongfully refused him something or
wrongfully affected his title to something."

12. The Learned Counsel for the ‘Petitioner’ / ‘Appellant’ , cites the

decision of the Hon’ble Supreme Court in `Babua Ram & Ors. v. State of

U.P. & Another’, reported in 1995 2 SCC, Page No. 689 at Spl Pg: 692,

wherein, at Paragraph 18, it is observed as under:

18. ``The person aggrieved must, therefore, be one who has

suffered a legal grievance because of a decision pronounced by
Civil Court giving higher compensation for the acquired lands
similar to his own while he is denied of such higher compensation
for his land because of operation of Section 18 read with Section
31 of the Act resulting in affectation of his pecuniary interest in his
acquired land directly and adversely by that award of the Collector
made under section 11. As such he becomes an aggrieved person
entitled to avail of the right and remedy conferred upon him under
Section 28-A(1) to make good his denied right to receive

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 compensation in excess of the amount awarded by the Collector /
LAO.

Any interested person in the land acquired under the same

notification published under Section 4(1) who failed to avail the
right and remedy under Section 18(1) read with second proviso to
Section 31(2), becomes a person aggrieved under Section 28-A(1)
of the Act, when the owner of the another land covered by the same
notification is awarded higher compensation by the Civil Court on
a reference got made by him under Section 18.’’

13. The Learned Counsel for the ‘Petitioner’ / ‘Appellant’ , refers to

the decision of the Hon’ble Supreme Court in `Shobha Suresh Jumani v.

Appellate Tribunal, Forfeited Property & Anr.’, reported in (2001) 5 SCC

755 at Spl Pg: 756, wherein, at Paragraphs 5 and 9, it is observed as

under:

5. ``The words `any aggrieved person’, are found in several

statutes. However, the meaning of the expression `aggrieved’ may
vary according to the context of the enactment in which it appears
and all the circumstances.

9. From the scheme of the Act, it is clear that `any person

aggrieved’, by an order of the competent authority would mean a
person whose property is held to be illegally acquired under the
Act and which is to be forfeited or whose legal rights qua the said
property are adversely affected. A relative or associate who has no
interest or right in such property cannot be held to be a person
aggrieved. It is true that the wife may be aggrieved because her
husband’s properties are forfeited. But that would not confer a
right to file an appeal against such order. There is no infringement
of her legal right. For the purposes of the Act husband and wife are
different entities. If the properties standing in the name of a relative

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 or associate are forfeited on the ground that smugglers or foreign
exchange manipulators were holding the said properties in their
names or that such properties are legally acquired, then to that
extent, for challenging the said finding, the relative or associate
can be held to be person aggrieved by the order of the competent
authority. But, a relative or associate cannot be considered to be
aggrieved if the properties belonging to the smuggler or foreign
exchange manipulator are forfeited under the Act.’’

1st Respondent’s Stance:

14. In response, the Learned Counsel for the ‘1st Respondent’/

Petitioner’, submits that the ‘Petitioner’/ ‘Appellant’, was not a `Party’, to

the ‘Petition’, in IA(IBC)/400(CHE)/2021, before the `Adjudicating

Authority’, as `no relief’, was claimed against it, in the said

‘Proceedings’, which were directed only against the ‘2nd to 4th

Respondents’, in the instant ‘Appeal’.

15. According to the ‘1st Respondent’/ ‘Petitioner’, the ‘Petitioner’ /

‘Appellant’, despite being aware of IA(IBC)/400(CHE)/2021 (on the File

of the `Adjudicating Authority’ / `Tribunal’), had not intervened, in the

said ‘Proceedings’, and further, that the instant ‘Appeal’, is `not

maintainable’, because of the simple fact, that the ‘Petitioner’/

‘Appellant’, is ‘Not a Party Aggrieved’, at any circumstance, and

therefore, cannot take umbrage of the `Ingredients of Section 61(1) of the

Insolvency and Bankruptcy Code, 2016’, which in no manner, entitles the

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`Petitioner / Appellant’, to prefer the instant ‘Appeal’, before this

`Tribunal’.

16. The Learned Counsel for the ‘1st Respondent’, points out that there

can be `no Claim’, that ‘Fraudulent Transactions’, ought to be excused,

contrary to the explicit Provisions of the ‘Insolvency and Bankruptcy

Code, 2016’, on the basis of the mandate to balance the `interest of

Stakeholders’.

17. The Learned Counsel for the ‘1st Respondent’, brings it to the

7‘Notice’ of this ‘Tribunal’, that when ‘RISPL’, had already preferred an

‘Appeal’, the Company Appeal (AT) (CH) (Ins) No. 325 of 2022, filed by

the ‘Petitioner’/ ‘Appellant’ (the `Controlling Stakeholder’), in the

`Committee of Creditors’ of `RISPL’, is a gross abuse of the process of

`Law’, as it cannot be the case of the ‘Petitioner’/ ‘Appellant’, that it is

canvassing any case, different from that of ‘RISPL’, in its ‘Appeal’.

18. The Learned Counsel for the ‘1st Respondent’/ ‘Petitioner’, takes a

prime plea that the instant Company Appeal (AT) (CH) (Ins.) No. 325 of

2022, is filed by the ‘Petitioner’/ ‘Appellant’, with an intent to indulge in

‘Plurality of Proceedings’, and thus `bog down’ ‘RPPL’, to try and

somehow, stall its progress, post `Successful Resolution’.

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19. At this Juncture, the Learned Counsel for the ‘1st Respondent’/

‘Petitioner’, projects an argument, that the ‘Transactions’, set out in the

IA(IBC)/400(CHE)/2021, had defrauded the `Financial Creditors’, whose

`Security’, was destroyed.

20. The Learned Counsel for the 1st Respondent, contends that the

‘Resolution Application’ of `RPPL’, had taken over the ‘Corporate

Debtor’, with a clean slate, after approval of their ‘Resolution Plan’, by

the ‘Adjudicating Authority’, and therefore the ‘Petitioner’/ ‘Appellant’,

has ‘No Locus’, to assail the said ‘Plan’, of the ‘Corporate Insolvency

Resolution Process’, of the ‘Corporate Debtor’, and cannot raise any

`Claim’, at this distant point of time.

21. The Learned Counsel for the ‘1st Respondent’/ ‘Petitioner’ points

out, that as the ‘Transaction of Sale of Assets’, which was covered by the

`earlier charge’, cannot but be ‘Fraudulent’, and be meant to ‘deprive’ the

‘Creditors’, even apart from the fact, that the `present Transactions’, are

also `Undervalued’.

Assessment:

22. In the instant case, the ‘Petitioner’/ ‘Appellant’, although, being a

‘Secured Financial Creditor’ of the ‘Respondent Nos. 1 & 4’/ ‘Corporate

Debtors’, and not `arrayed as Party’, in the ‘Petition’, in

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IA(IBC)/400(CHE)/2021 and that the ‘Petitioner’/ ‘Appellant’, has filed

the instant ‘Comp. App (AT) (CH) (INS.) No. 325 of 2022’, as an

‘Aggrieved Person’, yet this ‘Tribunal’, is of the earnest opinion that the

‘Resolution Applicant’ of `RPPL’, had taken over the ‘Corporate Debtor’

(ofcourse with a clean slate), after `Approval’, of its ‘Resolution Plan’, by

the ‘Adjudicating Authority’ / `Tribunal’, and in that perspective, the

‘Petitioner’/ ‘Appellant’, has ‘No Locus Standi’, to challenge the said

‘Plan’, or ‘Corporate Insolvency and Resolution Process Proceedings’ of

the ‘Corporate Debtor’. As such, the filing of an ‘IA No.696 of 2022 in

Comp. App (AT) (CH) (INS.) No. 325 of 2022’, seeking ‘Leave’, to

prefer the instant ‘Appeal’, before this ‘Tribunal’, cannot be sought for,

with an inordinate and inexplicable delay, in the considered opinion of

this `Tribunal’.`

23. Most importantly, one cannot remain in oblivion to the candid fact,

that ‘RISPL’, had preferred an ‘Appeal’, before this ‘Tribunal’, and

hence, the ‘Petitioner’/ ‘Appellant’, in the instant Company Appeal (AT)

(CH) (Ins) No. 325 of 2022, as ‘Controlling Stakeholder’, is not entitled

to put forward any case, other than that of ‘RISPL’, in the instant

‘Appeal’.

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24. It must be borne in mind, that when ‘RISPL’, itself, had no

‘Rights’, in the ‘Properties’, the aspect of any ‘Rights’, having been

vested on the same, to and in favour of the ‘Petitioner’/ ‘Appellant’, by

the ‘Security’, created by ‘RISPL’, will not arise. In any event, the

‘Impugned Order’, dated 30/05/2022 in IA(IBC)/400(CHE)/2021 in

IBA/1099/2019, passed by the ‘Adjudicating Authority’ / ‘National

Company Law Tribunal, Division Bench – II, Chennai’, does not take

away the ‘Rights’ of ‘Petitioner’/ ‘Appellant’, in any manner.

25. In the light of foregoing upshot, this `Tribunal’, on a careful

consideration of the divergent contentions advanced on either side, all the

more, when ‘RISPL’, itself , had no rights in the ‘Properties’ in question,

any ‘Rights’, having been vested on the same, to and in favour of the

‘Petitioner’ / ‘Appellant’, by ‘Security’, created by ‘RISPL’, does not

arise, bearing in mind, a crystalline fact that the ‘Rights’ of the

‘Petitioner’ / ‘Appellant’, are not taken away, by means of the ‘Impugned

Order’, dated 30/05/2022, in IA(IBC)/400(CHE)/2021 in IBA/1099/2019

(on the File of the ‘Adjudicating Authority’ / ‘National Company Law

Tribunal’, Division Bench – II, Chennai), comes to a consequent

conclusion, that the IA No. 696 of 2022 in Comp. App (AT) (CH) (INS.)

No. 325 of 2022, preferred by the `Petitioner / Appellant’, (seeking

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`Leave’ to prefer the instant `Appeal’), is `Ex facie’, not `maintainable’,

and it fails.

Conclusion:

In fine, the IA No. 696 of 2022 (`Praying for Leave’, to prefer the

instant Comp. App (AT) (CH) (Ins.) No. 325 of 2022), filed by the

`Petitioner / Appellant’, is ‘Dismissed’. ‘No Costs’.

I.A. No. 1107 / 2022 in Comp. App (AT) (CH) (Ins.) No. 325 of 2022:

The `Petitioner / Proposed 3rd Party’ (`L & T Infra Investments

Partner’), Represented by its Authorised Signatory Mr. Vijayaraj, has

preferred I.A. No. 1107 / 2022 in Comp. App (AT) (CH) (Ins.) No. 325 of

2022 (under Rule 11 of NCLAT Rules, 2016), seeking to `Implead’ itself

as `5th Respondent’ in the instant `Company Appeal’, on the footing that

its position, is like that of the position of the `1st Respondent / Appellant’,

and therefore, filing of a `Fresh Appeal’, is an `Otiose’ one, and in that

perspective, prays for passing of an `Order’, by this `Tribunal’, to get

itself `Impleaded’, in the present Comp. App (AT) (CH) (Ins.) No. 325 of

2022, before this `Tribunal’.

In lieu of the fact, that this `Tribunal’, has dismissed the IA No.

696 of 2022 in Comp. App (AT) (CH) (Ins.) No. 325 of 2022, preferred

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by the `Asset Reconstruction Company (India) Limited, Mumbai (by

passing a detailed order), and hence, the I.A. No. 1107 / 2022 in Comp.

App (AT) (CH) (Ins.) No. 325 of 2022 (filed by the `Proposed Party’ /

`L & T Infra Investments Partners’, Mumbai), represented by its

Authorised Signatory Mr. Vijayaraj, is not `entertained’, and the same is

`Dismissed’, as `not maintainable’.

Comp. App (AT) (CH) (Ins.) No. 325 of 2022:

In view of the fact that IA No. 696 of 2022 in Comp. App (AT)

(CH) (Ins) No. 325 of 2022 (seeking `Leave’, to prefer an ‘Appeal’), filed

by the ‘Petitioner’/ ‘Appellant’, is ‘Dismissed’, the main Comp. App

(AT) (CH) (Ins.) No. 325 of 2022, is not `entertained’, and the same is

`rejected’, by this ‘Tribunal’. The connected pending Interlocutory

Application Nos. 697 to 699 of 2022 are `Closed’.

[Justice M. Venugopal]
Member (Judicial)

[Shreesha Merla]
Member (Technical)
27/04/2023

SR / TM

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