Chandra Bhan Singh, Member (T)

1. The above I.A. bearing No. 2067/2021 has been filed by the Applicant, M/s. JJE Adornment Pvt. Ltd. seeking following reliefs:

a. This Hon'ble Tribunal be pleased to direct the Ld. Liquidator to admit the claim of amount of Rs. 6,21,95,210.71 (Rupees Six Crore Twenty One Lakhs Ninety Five Thousand Two Hundred Ten and Seventy one paise only) of the Applicant as a stakeholder and direct to pay entire amount or part thereof;

b. This Hon'ble Tribunal be pleased to direct the Ld. Liquidator to transfer the amount of Rs. 1,33,02,768/- (Rupees One Crore Thirty Three Lakhs Two Thousand Seven Hundred and Twenty Eight Only) i.e. the said cash balance along with accrued interest to the bank account of the Applicant as part payment towards the claim of Applicant as stakeholder;

c. This Hon'ble Tribunal be please to quash and set aside the Rejection Order dated 20.07.2021 passed by Ld. Liquidator thereby rejecting the claim of the Applicant;

d. Pending the hearing and disposal of the Application, be pleased to direct the Ld. Liquidator to not dispose off the said cash balance lying with Ld. Liquidator and maintain status quo;

e. Ad interim/interim relief in terms of prayer (D) above may be awarded in favour of the Intervener;

f. Such further and other orders as this Hon'ble Tribunal deems fit and proper in the interest of justice and fair play in view of the facts and circumstances of the case.

2. The Applicant, M/s. JJE Adornment Pvt. Ltd. mentions that the Corporate Debtor through its promoter/director issued four separate work orders in favour of the Applicant all dated 06.02.2019 for four military engineering services (MES/GE) Projects at Mumbai, Nashik and Ahmed Nagar. It is the contention of the Applicant that as per the said work order it was agreed that 93.5% of the amounts received from the MES towards the bill would be the Applicant share which include cost of raw material, labour etc. and the balance 6.5% was the share of the Corporate Debtor. For the purpose of the above four contracts, the Corporate Debtor has opened a bank account with the Bassein Catholic Cooperative Bank, Nashik Branch. The Applicant further mentions that in the board meeting of the Corporate Debtor i.e. Pingle Builders held on 06.05.2019, Mr. Santosh Talwadekar, the Director of the Applicant was authorised to transact with the said bank in respect of the Work Orders. A copy of the Board Resolution has been annexed by the Applicant in his Application. The applicant contends that it has executed the work order and has incurred the transaction amount by way of cost towards raw material, payment of wages, taxes etc. The invoiced claimed under Form G before the liquidator is as under:

3. The Applicant contends that the Director, Mr. Santosh Talwadekar was regularly operating the said bank account. However, in the third week of December, 2019, the Applicant mentions that to his shock and surprise it came to know that the Corporate Debtor has been undergoing CIRP with effect from 19.07.2018 and Mr. Shrikant Madanla Zawar was appointed as Resolution Professional. The Applicant mentions that it never knew from before that the Resolution Professional has taken over the management and control of the Corporate Debtor Company. The applicant further mentions that Resolution Professional took benefit of the work done by the Applicant since the Applicant had kept the Corporate Debtor as a going concerned and therefore its claims as mentioned in the Application, is towards CIRP cost for running the Corporate Debtor Company.

4. The Resolution Professional in his submission has mentioned that in respect of the dues purportedly payable, the Applicant had earlier approached this Tribunal vide I.A. No. 1059/2020 which was filed on 08.07.2020 and was dismissed by this Tribunal vide its order dated 11.12.2020. The dismissal by the Hon'ble NCLT dated 11.12.2020 was challenged by Applicant vide Company Appeal No. 97/2021 before the Hon'ble NCLAT. However, the Hon'ble NCLAT did not pass any relief, nor made any observations on merits of the orders of NCLT dated 11.12.2020. However, NCLAT in its order dated 16.02.2021 had mentioned the following in its conclusion:

"...While declining to interfere with the impugned order which does not suffer from any legal infirmity, we dispose off this appeal in the light of foregoing observations giving liberty to the Appellant to approach the liquidator with its claim within one week from today..."

5. The Bench notes that subsequent to the order dated 16.02.2021, the Applicant filed its claim under Form G before the liquidator for seeking a release of Rs. 6,21,95,210/- including interest. The liquidator, inter alia, in his correspondence dated 14.06.2021 sent to the Applicant had mentioned the following:

"....It appears that you have based your claim on the approval given on behalf of Pingle Builders Pvt. Ltd. (Corporate Debtor) during 2019 i.e. post the initiation of the Corporate Insolvency Resolution Process (CIRP) in respect of the Corporate Debtor by the Hon'ble National Company Law Tribunal, Mumbai Bench-III in the matter of Soorajmull Baijnath Pvt. Ltd. Vs. Pingle Builders Pvt. Ltd. [CP(IB) No. 215/2018] vide order dated 19.07.2018. The work orders on the basis of which the claim has been filed have been issued in 2019, which is clearly after the initiation of CIRP in respect of the Corporate Debtor. Further, the said work orders have been executed under the signatures of the ex-directions of the Corporate Debtor. In the light of the above reproduced provision, it is clear that the management of the Corporate Debtor ceased to have any power from the date of appointment of erstwhile Resolution Professional, and could not have taken any decision in respect of the work orders as attached by you without prior approval of the erstwhile RP.

Further, the Reply Affidavit filed by the erstwhile resolution professional in I.A. 1059/2020 indicates that the said decisions concerning awarding the work contract to you, and approvals given to you on behalf of the Corporate Debtor were done without any knowledge of the erstwhile RP. It has been clearly stated by the erstwhile RP that the Ex-Directors of the Corporate Debtor had no authority to assign any work contract to you.

Thus, in the light of the above stated observations, you are hereby given an opportunity as to why the claim filed by you should not be rejected on the ground that the ex-management of the Corporate Debtor had no authority to assign the work contracts to you in 2019..."

6. The Bench notes that the work order by the Ex-Promoter/Directors of the Corporate Debtor was issued on 06.02.2019 whereas the CIRP against the Corporate Debtor commenced from 19.07.2018 and the Board of the Corporate Debtor stood suspended and the promoter/directors did not have any right to issue or assign any such work order. As the Board of directors has been suspended, the provisions of the IBC was applicable and the moratorium under Section 14 of the Code was in force.

7. The Bench here also notes that board resolution on 06.05.2019 of the Corporate Debtor where Mr. Santosh Talwadekar was authorised to transact the said Bank Account with Bassein Catholic Cooperative Bank, Nashik Branch is illegally void and against the provision of the IBC. As the ex-promoter/director did not have any power to conduct any Board meeting and any such alleged meeting is absolutely illegal fraudulent and void. The Bench notes that it is the Resolution Profession in which the operations of the Corporate Debtor was vested since the commencement of CIRP on 19.07.2018.

8. The Bench also notes that once moratorium under Section 14 of the Code was enforced, it would be the Resolution Professional who has the all authorities and power to any such contract to any third party on behalf of Company and not under any circumstances it can be any of the Ex-Promoter/Director.

9. The Bench notes that the contention of the Applicant that he was unaware that the CIRP has commenced on the Corporate Debtor as on 19.07.2018 is totally ill informed and baseless as the Resolution Professional had given public announcement in two daily newspaper namely Times of India and Maharashtra Times on 04.10.2018. By this announcement the Resolution Professional had communicated to the public at large that the provisions of the Code are levied on the Corporate Debtor Company hence any contention raised by the Applicant that he was not aware of the CIRP is incorrect and liable to be rejected.

10. The Bench notes that the Applicant cannot give an excuse that he was not aware of the fact that the Corporate Debtor was in CIRP. Once moratorium is invoked, the Board of the Company stands suspended and it is only the Resolution Professional who has the powers of the Board and control of the management of the Corporate Debtor Company. In this matter no Work Order was ever given by the Resolution Professional. Further any Work Order given and assigned by the Resolution Professional during the CIRP can only be after discussion and approval of the CoC. The Bench notes that even the invoices which have been issued by the Applicant are not tax invoices but only proforma invoices.

11. The Bench is of the view that not only contract entered into by the Applicant with the Director is void as it is against the provision of IBC but also opening of the bank account has been done fraudulently without the knowledge of the Resolution Professional during the CIRP period when moratorium under Section 14 was in place. The Bench is of the clear view that the above I.A. 2067/2021 is illegal and baseless and does not stand to merit.

12. In view of the above, this Bench DISMISSES the I.A. 2067/2021.