V.NAGARAJAN Vs. SKS ISPAT AND POWER LTD

JUDGEMENT

(1.) This judgment has been divided into sections to facilitate analysis.

(2.) Cethar Ltd("Corporate Debtor"), a corporate entity which is engaged in engineering and project consultancy, is undergoing liquidation. The appellant was appointed as its interim resolution professional and resolution professional. After an unsuccessful attempt at resolution, the appellant was appointed as its liquidator on 25 April 2018. The appellant instituted proceedings(CA/38/IB/2018 (NCLT, Chennai Bench)) under Sections 43 and 45 of the IBC to avoid preferential and undervalued transactions of the Corporate Debtor in favour of Respondent Nos 1-4 with respect to a contract dated 15 March 2011. No relief was sought against Respondent No 10. The appellant claims to have subsequently discovered that SKS Ispat and Power Ltd (Respondent No 1) and its subsidiary- SKS Power Generation Chhattisgarh Ltd (Respondent No 10) had colluded with the promoters of the Corporate Debtor and defrauded the latter of over INR 400 crores by entering into a fraudulent settlement of only INR 4.58 crores. The appellant also alleges that these transactions form a part of the ongoing investigation by the Central Bureau of Investigations and the Enforcement Directorate. Respondent No 10, allegedly at the behest of Respondent No 1, sought to invoke certain bank guarantees issued by the Corporate Debtor for its failure to perform its engineering services. The appellant filed a Miscellaneous Application to resist the invocation of this performance guarantee until the liquidation proceedings are concluded.

(3.) On 31 December 2019, the NCLT held that the performance guarantees were not a part of 'Security Interest', as defined under Section 3(31) of the IBC and refused to grant an injunction against the invocation of the bank guarantee until the liquidation proceedings are complete. The appellant has not disputed his presence before the NCLT when this order was pronounced in open court. However, the appellant states that a copy of the NCLT's order dated 31 December 2019 was uploaded on the NCLT website only on 12 March 2020. However, the uploaded order set out the incorrect name of the Judicial member who had passed the order. The corrected order was uploaded on 20 March 2020. Subsequent to the corrected order being uploaded, the appellant claims to have awaited the issue of a free copy and allegedly sought the free copy on 23 March 2020, under the provisions of Section 420(3) of the Companies Act, 2013("Companies Act") read with Rule 50 of the National Company Law Tribunal Rules, 2016("NCLT Rules"). According to the appellant, the free copy has not been issued till date. The appellant has stated that owing to the lockdown on account of the COVID-19 pandemic, the appeal before the NCLAT was filed on 8 June 2020 with an application for exemption from filing a certified copy of the order as it had not been issued.