Judgment Summary (NLCT) – In the matter of Amtek Auto Limited

  December 22, 2021

In the matter of Amtek Auto Limited (Chandigarh Bench (13.02.2019))

 

Corporation Bank filed a Section 7 application before the Chandigarh Bench against M/s. Amtek Auto Limited for its default on payment of the bank’s fees. An extension of 90 days was sought and approved during the CIRP. The RA, M/s. Liberty House Group, dishonored its commitment to the implementation of the resolution plan, after its approval by the Tribunal. Resultantly, C.A. No. 567/2018 and C.A. No. 601/2018 were filed.

C.A. No. 567/2018

This application was filed by Corporation Bank on behalf of all the FCs of the CD, under Section 60(5) read with Section 74(3) of the Code. The creditors approached the Tribunal with the following prayers: 

  1. To declare that the RA and its promoters, upon whom the Resolution Plan is binding under Section 31 of the Code, have failed to implement the same. 
  2. The Committee of Creditors be reinstated to run the CD as a going concern
  3. A minimum of 90 days be granted for the resolution professional to initiate a fresh process instead of forcing the CD into liquidation because of the fraud committed by the RA (Respondent No. 1)
  4. RA be debarred from applying for a fresh resolution plan, and the IBBI be directed to initiate proceedings under Section 74(3) of the Code.

The Tribunal, through its order dated 13.02.2019, disposed of this application by holding that the resolution plan submitted by the RA could not be implemented due to a default in adhering to the payment schedule as given in the plan. The Tribunal restored the Committee of Creditors for considering the plan of Delta Value Investors L.P. (“DVI”), and also excluded a certain period (from the date DVI submitted its resolution plan till the date this application was disposed) from the CIRP’s 270 days. The Tribunal further clarified that the FC and/or RP were at the liberty to make appropriate complaints before the IBBI or the Central Government for the wilful default by the respondent.

C.A. No. 601/2018

This application was filed by the RA under Section 60(5) of the Code with a prayer that the CIRP initiated in this case, and the subsequent approval of the resolution plan by the Tribunal’s order dated 25.07.2018, was vitiated by misrepresentation/fraud/mistake of fact. The RA also contended that the Tribunal must lay down guidelines for compliance by RPs in such matters.

While disposing of C.A. 567/2018, the Tribunal observed that it had already noted that the RA would be at liberty to file a complaint with the IBBI or the Central Government, and held that the matter in this application will have to be decided by the competent authority. In doing so, the Tribunal rejected the present application.

 

Full text of the order accessible here.

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