Acrow Construction Vs PNB & Ors

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2022 SCC OnLine NCLAT 2372
In the National Company Law Appellate Tribunal†

(BEFORE ASHOK BHUSHAN, CHAIRPERSON AND ALOK SRIVASTAVA, MEMBER
(TECHNICAL))
Acrow Construction Pvt. Ltd. and Others …

Appellants;
Versus
Punjab National Bank and Others … Respondents.
Company Appeal (AT) (Insolvency) No. 74 & 75 of 2022
Decided on March 10, 2022
Advocate who appeared in this case :
For Appellant: Mr. K. Datta, Sr. Advocate with Mr. Kumar Anurag
Singh, Mr. Zain A. Khan and Ms. Ekta Bharati, Mr. Prateek Gupta,
Advocates.
For Respondents: Mr. G. Aniruth Purusothaman, Advocate for R-1, 2
& 3.
Mr. Abhijeet Sinha, Mr. Nikhil Kumar Jha, Advocates for R-4 (RP).
ORDER
(Virtual Mode)
Heard Learned Sr. Counsel for the Appellant-Mr. Krishnendu Datta,
Learned Counsel for the Respondent Nos. 1 to 3-Mr. G. Aniruth
Purusothaman and Mr. Abhijeet Sinha, Advocate for the Resolution
Professional.
2. This Appeal has been filed challenging the Order dated
03.01.2022 passed by the Adjudicating Authority (National Company
Law Tribunal, Ahmedabad, Court-2) in IA 338 of 2021 in CP(IB) 271 of
2019. By which Order, Adjudicating Authority has directed the
Resolution Professional to once again grant inspection to the
Respondent Nos. 1 to 3 who are applicants before the Adjudicating
Authority, of the claims documents and further allow copies of the
documents so inspected as required by the Respondent Nos. 1 to 3. The
Appellant has also challenged the earlier Order dated 02nd December,
2021 of the Adjudicating Authority by which direction was issued to the
Resolution Professional to grant inspection.
3. The ‘CIRP’ proceedings were initiated against the Corporate
Debtor by Order dated 09.11.2020 on an Application filed by the
Appellants before Adjudicating Authority under Section 7 of the
Insolvency and Bankruptcy Code, 2016 (IBC in short). Public
Announcement was made by the IRP on 12.11.2020 in response to
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which claims were filed. Appellants have also filed the claim Forms
claiming to be Financial Creditors. The Respondent Nos. 1 to 3 who
were also Financial Creditors filed their claims. The Committee of
Creditors (CoC in short) was constituted and 1st Meeting was held on
10th December, 2020. An Application was filed by the Respondent Nos.
1 to 3 before the Adjudicating Authority being I.A. - 338/2021 wherein
apart from Appellants before us there were other 16 entities who were
impleaded as Respondent Nos. 1 to 20 and Respondent No. 21 was
Resolution Professional. In the said Application, following prayers have
been made by the Applicants:
“A. Declare the Respondent Nos. 1, 2, 4, 5, 6, 7, 8, 10, 11, 12, 13,
14, 15, 17, 18, 19 and 20 as related parties of the Corporate
Debtor.
B. Declare that the material decisions taken by the CoC shall not
affect the CIRP of the Corporate Debtor and the same be set aside
as null and void.
C. Direct the Respondent No. 21 to permit inspection by the
Applicant or their Authorised Representative in respect of the
claim documents submitted for claim verification by the
Respondent No. 1 to 20 and to furnish copies of the same to the
Applicant.
D. Direct the Respondent No. 21 to remove the Respondent Nos. 1,
2, 4, 5, 6, 7, 8, 10, 11, 12, 13, 14, 15, 17, 18, 19 and 20 from
the Committee of Creditors of the Corporate Debtor.
E. Direct the Respondent No. 21 to reconstitute the Committee of
Creditors of the Corporate Debtor on the basis of the revised
voting share.
F. Direct the Respondent No. 21 to cease and desist from convening
the meetings of the Committee of Creditors to take material
decisions relating to Corporate Insolvency Resolution Process of
the Corporate Debtor, until the Committee of Creditors is
reconstituted.
G. Direct disciplinary proceedings to be initiated against the
Respondent No. 21 for having admitted claims of the Respondent
Nos. 1, 2, 4, 5, 6, 7, 8, 10, 11, 12, 13, 14, 15, 17, 18, 19 and 20
in collusion without verification.
H. Pass ad-interim and interim reliefs in terms of Clause A, B, C, D,
E, and F.
I. Pass such other order/directions as this Hon'ble Bench may deem
fit and proper in the facts and circumstances of the case.”
4. The Application came for hearing before the Adjudicating
Authority on 02.12.2021 and the Adjudicating Authority directed the RP
to permit inspection of the claim documents to the Applicants therein
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(Respondents 1 to 3 herein). In the Order it was also noted that earlier

date was fixed for inspection but when the Applicants reached no
inspection was given by the RP. Noticing the aforesaid submission,
Adjudicating Authority directed the RP to again provide inspection. The
Adjudicating Authority directed that let the Copies of the Claim
Documents shown to the Applicant who are Financial Creditors/Public
Sector Banks. After the Order dated 2.12.2021 the matter was taken up
by the Adjudicating Authority on 03.01.2022 when again the grievance
was raised that inspection was not provided by the RP to the
Applicants. The Adjudicating Authority again directed to give inspection
of the claim documents mentioned in the Order dated 02.12.2021
through their authorised representative being the authorised Bank
officials to visit the office of the RP and let the inspection be given in
the office of the RP on 07.1.2022 in the office of RP. The Court further
issued following direction:
“Copies of the documents which are inspected in the said meeting
be provided if asked for by the applicant. The Learned Counsel for
the RP states that RP does not have any power to supply the copies
under the provisions of the Code to CoC Members. RP is directed to
comply the direction passed above.”
5. Aggrieved against the Order dated 02.12.2021 and 03.01.2022,
Four Appellants who are Financial Creditors of the Corporate Debtor
have come up in this Appeal.
6. We have heard Mr. Krishnendu Datta, Sr. Advocate for the
Appellant. Mr. Datta, at the very outset, submits that he is not raising
any grievance in the present Appeal in so far as the Direction to inspect
the document has been issued by the Adjudicating Authority. He
submits that he is not questioning the inspection direction however he
submits that the direction for giving copies of the claims documents is
not permissible in accordance with the provisions of law and CIRP
Regulations. He submits that power under Section 21(9) of the Code is
of the Committee of Creditors to ask for documents from the Resolution
Professional and the applicants who are only members of the CoC
cannot pray for giving copies of the claims documents. He submits that
the Applicants who are Respondents are intending to hold a fishing and
roving inquiry to find out something in support of their Application
being I.A. 338 of 2021.
7. Learned Counsel appearing for the Respondent Nos. 1 to 3
submits that the Adjudicating Authority has passed the Order for copies
of the claims documents due to the peculiar facts and circumstances of
the case as has been noticed in the Order dated 03.01.2022. He
submits that earlier the Adjudicating Authority directed for inspection
but looking to the subsequent facts which were before the Adjudicating
Authority the conscious order has been passed directing to give the
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copies of the claims documents which are to be inspected by the

Respondents. It is submitted that the Order passed by the Adjudicating
Authority is order quo the specific Respondent Nos. 1 to 20 regarding
the claims of Respondent No. 1 to 20 in the Application and is not an
order in rem. It is submitted that Applicants have raised serious
allegations regarding the inclusion of the several Respondents in the
CoC. It is contended that the case of the Applicant was that the
Respondents are related parties of the Corporate Debtor and cannot be
part of the CoC and Orders were passed during the course of the
hearing of I.A. No. 338 of 2021.
8. Mr. Abhijeet Sinha, Advocate appearing for the Resolution
Professional submits that RP is ready to comply any direction issued by
the Adjudicating Authority or by this Tribunal and he does not have to
make any submission regarding either inspection or providing copies of
the claims documents and in an event, Court passes any order, the RP
has to comply the Order of the Adjudicating Authority.
9. We have considered the submissions of Learned Counsel for the
parties and perused the record.
10. In so far as the Direction passed by the Adjudicating Authority
on 02.12.2021 for inspection of all the documents relating to admitted
claims of the Respondents, no grievance is raised before us hence no
exception can be taken to the Order dated 02.12.2021 where direction
for inspection has been issued. Issue which has been raised by the
parties before us is regarding the direction of the Adjudication Authority
for providing copies of the claims documents so inspected by the
Applicants i.e. Respondent Nos. 1 to 3. Section 21(9) and Section 21
(10) of I&B Code, 2016 which has been referred to by the Appellants
provides as follows:
“21(9) The committee of creditors shall have the right to require
the resolution professional to furnish any financial information in
relation to the corporate debtor at any time during the corporate
insolvency resolution process.
21(10) The resolution professional shall make available any
financial information so required by the committee of creditors under
sub-section (9) within a period of seven days of such requisition.”
11. We have also been referred to provisions of the Regulation 13(2)
of the Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Regulations, 2016. Under the
Regulation, after public announcement, the claims have to be filed as
per Regulation 13(2) is required to be given. Regulation 13(2) provides
for verification of the claims. It is further submitted that under the
Regulation 13(2) the only list of creditors is to be available for
inspection by the persons who submitted proofs of claim as well as
available for inspection by members, partners, directors and guarantors
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of the corporate debtor or their authorised representatives. Present is

the case where the Adjudicating Authority has directed for giving copies
of the claims documents as required by the Applicants after inspection.
The argument of Resolution Professional has been noted in the Order
dated 03.01.2022 that Resolution Professional does not have any power
to supply the copies under the provisions of the Code to the CoC
Members. There is no doubt that RP by himself cannot share the
documents with any individual member of CoC unless the CoC takes a
decision under Section 21(9) asking any documents from the
Resolution Professional. Thus RP was right in its submissions that he,
under the IBC cannot provide the copies of the claims documents.
Noticing the said argument, direction was given by the Adjudicating
Authority for giving copies of the claims documents to the Applicants.
Learned Counsel for the Appellants has submitted that the allegation of
the Applicants in I.A. No. 338 of 2021 is that the Respondents are
related members of the Corporate Debtor and they be ousted form the
CoC, have no bearing on the claims documents which are submitted by
the Appellants.
12. It is relevant to notice that there were 20 Respondents in the
Application and direction was issued to provide inspection of all the
Respondents including the present Appellants but only 4 Appellants
have come up in this Appeal challenging the said Order. The
Adjudicating Authority who is empowered to take appropriate decision
on application filed by the stakeholders has exercised its inherent
power under Rule 11 of the NCLT Rules, 2016 in the facts of the present
case. It cannot be accepted that Adjudicating Authority has no
jurisdiction to issue any direction for giving copies of particular claims
documents filed in the CIRP process. The Order of the Adjudicating
Authority for directing copies is case specific and based on the
application in the present case filed by the Respondent Bank. The
Resolution Professional is obliged to give such documents if any
decision is taken under Section 21(9) of the Code by CoC. The direction
of the Adjudicating Authority to give copies of claims documents to the
particular Financial Creditors cannot be held to be not within domain of
the Adjudicating Authority and in particular facts of the present case
such power can very well be exercised by the Adjudicating Authority
and direction issued by the Adjudicating Authority for supplying copies
of the claims documents needs no interference in exercise of our
appellate Jurisdiction.
13. We are also of the opinion that for deciding the Application i.e.
I.A. 338 of 2021 filed by the Public Sector Banks and for consideration
of prayers made, giving of copies of the documents was necessary.
We are thus of the view that no error has been committed by the
Adjudicating Authority in passing the Impugned Order dated
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03.01.2022 and 02.12.2021. We do not find any merit in the Appeal,

the Appeal is dismissed.
———
†
Principal Bench at New Delhi
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SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.

Page 1 Monday, March 04, 2024

2022 SCC OnLine NCLAT 2372

In the National Company Law Appellate Tribunal†

Acrow Construction Pvt. Ltd. and Others …

(Respondents 1 to 3 herein). In the Order it was also noted that earlier

copies of the claims documents which are to be inspected by the

of the corporate debtor or their authorised representatives. Present is

03.01.2022 and 02.12.2021. We do not find any merit in the Appeal,

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