B.S.V. Prakash Kumar, Member - (1.) One of the Financial Creditors, viz. IL & FS Financial Services Ltd. has filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 on behalf of the applicant/Financial Creditor challenging the constitution of the Committee of Creditors of the Corporate Debtor seeking reliefs as follows: a. That this Hon'ble Tribunal be pleased to direct the Committee of Creditors as set up by the Interim Resolution Professional in meeting held on 27.7.2017 be reconstituted with R1 and R3 excluded from the Committee of Creditors as they are related parties of the Corporate Applicant; b. That pending the final disposal of the present Application this Hon'ble Tribunal be pleased to restrain the IRP from issuing notice of the meeting of the Committee of Creditors to R1 to R3. c. That pending the final disposal of the present Application, this Hon'ble Tribunal be pleased to direct the IRP to restrain R1 to R3 from attending and/or participating and/or voting at the meeting of Committee of Creditors. d. For ad interim reliefs in terms of prayer clause (a) to (c); e. For costs; f. For such other orders as this Hon'ble Tribunal may deem fit and proper.
(2.) On perusal of this application moved by the Financial Creditor, it appears that this Financial Creditor filed this application against the corporate debtor represented by Interim Resolution Professional (IRP) and also three Respondents, viz. Manush Commodities Ltd., Diamond Wires Pvt. Ltd. and Shivam Galvanised Wires Pvt Ltd., as Respondents stating that since these three respondents being related parties as mentioned under Section 5(24) of the Insolvency and Bankruptcy Code, 2016, they should not be considered as Financial Creditors along with this applicant. Since they have been considered as Financial Creditors, the present applicant who has voting of more than 90% voting value in Committee of Creditors has been brought down to 61% voting value, which will not allow this applicant to take any decision to move any further in respect to Insolvency Resolution Process.
(3.) The reason for seeking deletion of these three respondents, i.e. Manush Commodities Ltd., Diamond Wires Pvt. Ltd. and Shivam Galvanised Wires Pvt. Ltd., as Financial Creditors is that the books of accounts of the Corporate Debtor company clearly indicate that all these three respondents debt has been shown as debt raised from the associated companies, the applicant Counsel says that indeed the name of Manush Commodities Ltd. has been explicitly mentioned as associated company with the Corporate Debtor. For this IRP having rightly or wrongly ignored the fact of the status of these Respondents as related companies and included these three respondents as financial creditors along with this applicant, despite Section 21(2) of the Insolvency and Bankruptcy Code, 2016 mandates Insolvency Resolution Professional to verify as to whether any of the Financial Creditors falling within the category of the related party or not. This applicant, having felt that this Interim Resolution professional inadvertently included these three Respondents as Financial Creditors, brought it to the notice of IRP on 25.7.2017 writing a letter to the IRP annexing the documents reflecting that these three respondents fall within the category of related parties. But somehow no decision has been taken yet as to whether they are to be construed as Financial Creditors or not, because of not taking any decision in respect to this aspect, though 120 days have gone by after declaration of moratorium, the Committee of Creditors could not take any decision even to appoint Insolvency Resolution professional in place of this Interim Resolution professional.;