Case Law Details
Ashok G. Rajani Vs Beacon Trusteeship Ltd. & Ors. (Supreme Court of India)
This Appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC) is against an interim order dated 18th August 2021 passed by the National Company Law Appellate Tribunal (NCLAT), Principal Bench at New Delhi in Company Appeal (AT) (Insolvency) No. 598 of 2021, filed by the Appellant, whereby the NCLAT issued notice of the Appeal, but did not restrain the Interim Resolution Professional (IRP) from proceeding with Corporate Insolvency Resolution Process (CIRP) of M/s Seya Industries Limited (hereinafter referred to as “Corporate Debtor”). The NCLAT, however, restrained the IRP from constituting a Committee of Creditors (CoC) till the next date of hearing. In the meanwhile, the Appellant and the Respondents were given the opportunity to settle their disputes before the Adjudicating Authority (NCLT) in terms of Section 12A of the IBC read with Rule 11 of the National Company Law Tribunal Rules, 2016 (NCLT Rules). The appeal was directed to be listed for hearing on 13th September 2021.
2. The Appellant is an erstwhile Director of Respondent No. 4, that is the Corporate Debtor. The Corporate Debtor, a company incorporated under the Companies Act, 1956 has been carrying on business, inter alia, of manufacture of benzene based Speciality Chemicals since 1990. It is stated that the Corporate Debtor had invested about Rs.400 Crores in its existing manufacturing facilities and had further invested about Rs.900 Crores in an integrated Greenfield Mega Project for Speciality Chemicals.
3. According to the Appellant, the Corporate Debtor is the source of livelihood for about 150 workmen, 40 unskilled workers and 75 employees on its payroll and is engaged with more than 200 Customers/Vendors. It is claimed that the Corporate Debtor has a net worth of Rs. 972 Crores and fixed assets worth more than Rs.1500 Crores.
4. In order to expand its chemical manufacturing plant at Tarapur, Palghar (Maharashtra), the Corporate Debtor raised capital and the Respondent No.1 – M/s Beacon Trusteeship Limited (hereinafter referred to as “Beacon Trusteeship”) committed to invest 100 Crores in the said integrated Greenfield Mega Project, in the form of Rs.20 Crores, towards Compulsorily Convertible Preference Shares (CCPS) and Rs. 80 Crores, by way of Non-Convertible Debentures (NCDs). Thereafter the Appellant, the Corporate Debtor and Respondent-Beacon Trusteeship executed a Debenture Trust Deed (DTD), inter-alia, recording the terms and conditions of the issue of said NCDs. The Respondent No. 1 was appointed, the Debenture Trustee as recorded in the DTD. The DTD laid down the obligations of the Corporate Debtor towards the NCDs.
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