Rajeswara Rao Vittanala, Member - (1.) The present application has been filed by Edelweiss Asset Reconstruction Company Limited (one of Financial Creditors), under Section 60(5)(c) of Insolvency and Bankruptcy Code, 2016 (IBC) R/w rules 14 & 34 of National Company Law Tribunal Rules, 2016 (NCLT Rules, 16) pursuant to orders dated 26.04.2016 passed in CP (IB) No. 01/HDB/2017, by inter alia seeking directions to the Respondent to produce all files, papers and documents available with the Respondent in the CIRP of the Corporate Debtor, including but not limited to (i) proof of claims submitted by each creditor of the corporate debtor and all annexures thereto including statements of account and loan documents; and (ii) reports of registered valuers for the purpose of determining liquidation value of the corporate debtor before this Tribunal; and grant inspection and photo-copies of the documents referred to in (a) above to the Applicant or in the alternative, direct the Respondent to grant inspection and photo-copies of the documents referred to in (a) above to the Applicant etc.
(2.) Brief facts leading to the filing of present application are as follows: a) The Applicant is an asset reconstruction company incorporated and constituted under the Companies Act, 1956 and having its registered office at Edelweiss House, Off CST Road, Kalina, Mumbai, Maharashtra 400 098. The Applicant is by voting share one of the largest secured financial creditors of. Synergies-Dooray Automotive Limited (Corporate Debtor). The Applicant acquired the debts of the Corporate Debtor vide an Assignment Agreement dated January 6, 2014 executed with Exim Bank, which was one of the original lenders of the Corporate Debtor. The total amount claimed by the Applicant against the Corporate Debtor as on February 20, 2017 as per the revised proof of claims submitted by the Applicant on February 20, 2017 to the Respondent/the Interim Resolution Professional (IRP) is Rs. Rs. 88,20,28,260.97 (Rupees Eighty Eight Crores Twenty Lakhs Twenty Eight Thousand Two Hundred and Sixteen and Ninety Seven Paise Only). b) The Respondent No. 1 is an Insolvency Professional enrolled under Section 206 of the Insolvency and Bankruptcy Code, 2016 (IBC) and is registered as an insolvency resolution professional with the ICSI Insolvency Professionals Agency (IPA) which is in turn registered with the Insolvency and Bankruptcy Board of India (Board) under Section 207 of IBC. The Respondent No. 1 was proposed for her appointment as the Interim Resolution Professional (IRP) by the Corporate Debtor - Synergies Dooray Automotive Limited (Corporate Debtor) in respect of its corporate insolvency resolution process as per resolution dated December 9, 2016 passed by the Board of Directors of the Corporate Debtor. The Respondent No. 1 was appointed as the IRP by this Tribunal by its order dated January 23, 2017, with a direction to take all necessary actions in accordance with relevant provisions of the IBC. c) The Applicant is filing the present Application seeking further information from the Respondent in relation to the Initial Information Memorandum (Initial IM) prepared by the IRP pursuant to Regulation 36(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for corporate persons) Regulations, 2016 (CIRP Regulations) by way of production/inspection of relevant documents in the possession of the Respondent. d) The Applicant states that by way of order dated February 22, 2017 (said Order) passed by this Hon'ble Tribunal in C.A. No. 43 of 2017 in CP (IB) No. 01/HDB/2017 filed by the Applicant inter alia challenging the constitution of the Committee of Creditors of the Corporate Debtor (CoC), this Hon'ble Tribunal permitted the Respondent to hold the first meeting of the CoC on February 22, 2017 (First Meeting). However, this Hon'ble Tribunal categorically clarified in the said Order that all decisions taken in the First Meeting would be subject to further orders of this Hon'ble Tribunal. e) On February 22, 2017, the First Meeting was held and various issues as set out in the notice and agenda for the First Meeting were voted upon by the CoC. The Applicant states it did not admit or accept the appointment of the Respondent as the Resolution Professional (RP) in respect of the CIRP of the Corporate Debtor as was also clarified by the Applicant in the First Meeting, and that all decisions taken in the First Meeting, including the appointment of the Respondent as the RP of the Corporate Debtor are subject to further orders of this Hon'ble Tribunal as per its order dated February 22, 2017 passed in the present Company Application. However, contrary to orders of Tribunal, the Respondent No. 1 held the First Meeting and continues to conduct the CIRP of the Corporate Debtor as if the present proceedings have been finally disposed of. f) During the First Meeting, the Applicant noted that the papers and documents filed with the Respondent under the CIRP by the creditors of the Corporate Debtor were all kept on the table. The Respondent during the First Meeting mentioned that all the files, papers and documents with respect to every proceeding in the matter are open for inspection. Item No. 10 (Vote of Thanks) as recorded in the Minutes for the First Meeting is relevant for the purpose of this Application and is reproduced below for ready reference: "ITEM NO. 10: VOTE OF THANKS There being no other business to be transacted, the meeting ended with a request once again from the Chairperson to inspect all the relevant papers, records and documents including the list of creditors, register of claims etc., kept for inspection for all the participants, during the meeting. The members of the Committee of Creditors made inspection except EDELWEISS ARC. The Chairperson was asked about the next steps in the process which she updated and also mentioned the provision which enables the creditors to call a meeting, if they so desire. She thanked all the participants." g) The Applicant states that as evident from the above extracted portion of the Minutes, all members of the CoC duly inspected all files, papers and documents with respect to every proceeding in the CIRP during the First Meeting, except for the Applicant, which reserved its right to seek inspection later. The said fact is evident from the email dated February 27, 2017 of the Applicant whereby it gave its comments to the Minutes. Accordingly, the Applicant addressed an e-mail on March 16, 2017 to the Respondent requesting her to provide the Applicant inspection of all files, papers and documents available with the Respondent in the present matter, including but not limited to (i) proof of claims submitted by each creditor of the corporate debtor and all annexures thereto including statements of account and loan documents; and (ii) reports of registered valuers for the purpose of determining liquidation value of the corporate debtor. The Applicant sought the inspection of documents on any of the days between March 21, 2017 and March 23, 2017. h) The Respondent responded by an e-mail of March 17, 2017 by which she requested the Applicant to provide the relevant provisions of the IBC or any regulations made thereunder which "mandates" her to provide inspection of documents to the Applicant. i) The Applicant once again addressed an e-mail on March 24, 2017 responding to the Respondent's e-mail of March 16, 2017 wherein the Applicant expressed its surprise as to how and why the Respondent is now asking for provisions of the IBC which "mandate" her to provide inspection of documents on the one hand while on the other hand the Respondent has given complete inspection of all documents to the other members of the CoC of the Corporate Debtor during the First Meeting as is also recorded in the Minutes of the First Meeting. The Applicant drew the Respondent that as one of the financial creditors of the Corporate Debtor, the Applicant is entitled to seek information pertaining to the Initial IM, including but not limited to details relating to the list of creditors, the amounts claimed by each creditor, the amounts admitted in respect of the claim of each creditor and the debts due from the corporate debtor to a related party and any additional information as deem fit by the Applicant, and further that as per the provisions of the IBC read with the CIRP Regulations, the Respondent is duty-bound to provide us such information which the Applicant sought by way of inspection of documents. The Applicant once again requested the Respondent to grant it the further information through inspection of documents sought for in its e-mail of March 16, 2017. The Applicant sought the inspection of documents on March 28, 2017 or March 29, 2017. j) On March 27, 2017, the Applicant received an e-mail from the Respondent wherein the Respondent stated that the papers are open for inspection, and asked the Applicant to inspect the documents on the following day, i.e. March 28, 2017. However, the Respondent stated that only the list of creditors is open for inspection and that this would be "placed on the table" along with all calculations and papers relating to the Applicant's own claim but failed to a mention of the venue of said inspection. However, it is stated that she would not be sharing claim document of other creditors of the Corporate Debtor. k) On March 28, 2017 (at 12:21 a.m.), the Applicant received an e-mail from the Respondent whereby the Respondent referred to Section 21(9) of the IBC, Section 29(2) of the IBC, Regulation 13 of the CIRP and Regulation 36(3) of the CIRP Regulations and reiterated that the list of creditors was available for inspection. The Respondent also stated (contrary to what is recorded in the Minutes of the First Meeting) that only each creditor's respective files were kept open during the First Meeting for inspection. The Respondent has also sought whether the information requested for by the Applicant is under Section 29(2) of the IBC or under Regulation 36(3) of the CIRP Regulations (which, in the Respondent's view speaks of information and not inspection). In her said email of March 28, 2017, the Respondent further stated that the inspection is available at Delhi even tomorrow i.e. March 29, 2017. In fact, all meetings and proceedings in relation to the Corporate Debtor (under CIRP) should be held at its registered office at Hyderabad as per oral directions of Tribunal. l) It is contended that further information being sought for by the Applicant from the Respondent by way of inspection of documents is a right conferred upon the Applicant under Regulation 36(3) of the CIRP as a financial creditor and member of the CoC of the Corporate Debtor. The interpretation of the Respondent of Regulation 36(3) of the CIRP Regulations, viz. that the said regulation speaks of further information and not inspection is myopic and for that reason incorrect. m) The Applicant further submits without prejudice and in arguendo that even assuming that the further information being sought for by the Applicant under Section 36(3) of the CIRP must have a bearing on the resolution plan, unless the Respondent is of the reasoned view that the information requested for by the Applicant by way of inspection of documents does not have a bearing on the resolution plan, the Respondent cannot deny this further information to the Applicant by way of inspection of documents to the Applicant. The Applicant also states that there is no question of this inspection being provided only to the Applicant, and it is the Applicant's case that complete inspection of all files, papers and documents available with the Respondent under the CIRP has already been availed by the other members of the CoC during the First Meeting. In any case, the Applicant is in agreement with the Respondent that the further information by way inspection of documents must be provided to all members of the CoC. n) With respect to any undertaking that is to be provided by the Applicant in respect of the information being sought for from the Respondent, the Applicant states the undertaking referred to in Section 29(2) of the IBC is in respect of relevant information that a resolution applicant may seek from the IRP in relation to preparing the information memorandum and not in respect of any further information that is sought by the Applicant as in this case. In any event, the Applicant states that it has duly provided an undertaking to the Respondent at the time of her preparing the Initial IM as can be seen from the Applicant's email of February 15, 2017. o) Therefore, the applicant urged the Tribunal to allow the prayer as sought for in the application failing which the applicant would suffer grave prejudice, irreparable injury and loss and asserted that balance of convenience is in its favour.
(3.) The application is strongly opposed by the respondents by filing separate replies. The contentions raised by the Respondents are briefly mentioned hereunder.;