mr-mukesh-kumar-jain-v-navin-kumar-upadhyay-anr-nclat-new-delhi-513854

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No. 930-931 of 2023 [Arising out of Order dated 30.05.2023 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi (Court No.III) in IA No. 2403/2023 and IA No. 964 of 2023 in CP IB-1018/ND/2020] In the matter of: Mr. Mukesh Kumar Jain ...Appellant Vs. Navin Kumar Upadhyay & Anr. ...Respondents For Appellant: Mr. Gautam Singhal, Mr. Rajat Chaudhary, Advocates. For Respondents: Mr. Saurav Agrawal, Mr. Asav Rajan, Mr. Ajay Sharma, Advocates for R-1 WITH Company Appeal (AT) (Insolvency) No. 943-944 of 2023 Arising out of Order dated 30.05.2023 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi (Court No.III) in IA No. 2403/2023 in IB-1018/ND/2020] In the matter of: Amit Goel ...Appellant Vs. Navin Kumar Upadhyay & Ors. ...Respondents For Appellant: Mr. Manish Kaushik, Mr. Ajit Singh Joher, Ms. Anshita Agarwal, Advocates. For Respondents: Mr. Saurav Agrawal, Mr. Asav Rajan, Mr. Ajay Sharma, Advocates for R-1. Mr. Gautam Singhal, Advocate for RP/R-2.2 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 J U D G M E N T (19th December, 2023) Ashok Bhushan, J. These two Appeals have been filed against the two orders passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi (Court No.III) in IA No. 2403/2023 filed by Mr. Navin Kumar Upadhyay- Respondent No.1 herein and IA No. 964 of 2023 filed by Mr. Mukesh Kr. Jain, the Appellant in Company Appeal (AT) (Insolvency) No. 930-931 of 2023. Company Appeal (AT) (Insolvency) No. 930-931 of 2023 has been filed by Mr. Mukesh Kr. Jain, Resolution Professional of the Corporate Debtor- ‘CMYK Printech Ltd.’ and Company Appeal (AT) (Insolvency) No. 943-944 of 2023 has been filed by Mr. Amit Goel, Suspended Director of the Corporate Debtor. 2. Brief facts of the case have already been noted in our order dated 06.11.2023 passed in these Appeals while deciding IA No.4138-4139 of 2023 filed by Respondent No.1- Mr. Navin Kumar Upadhyay. For sake of brevity, it shall be suffice to notice paragraphs 3, 4 and 5 of the said order which noticed the background facts, which are as follows:- “3. The Corporate Insolvency Resolution Process was initiated against the Corporate Debtor-CMYK Printech Ltd. vide Order dated 19th January, 2021. One Mr. Ranjeet Kumar Verma was appointed as IRP. On 22nd April, 2021, IRP appointed Respondent No. 1 Mr. Navin Kumar Upadhyay as Executive Editor of The Pioneer Newspaper run by the Corporate Debtor. Company Appeal (AT) Ins. No. 128 of 2021 was filed challenging the Order admitting CIRP by a Suspended Director of 3 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 the Corporate Debtor which Appeal came to be dismissed by this Tribunal vide its Order dated 16.12.2021. Against the Order dated 16.12.2021, two Civil Appeals were filed in the Hon’ble Supreme Court one by Shoboroi Ganguli and another by Narendra Kumar & Navin Kumar Upadhyay (Respondent No. 1). In the civil Appeals filed against the Order dated 16.12.2021, Hon’ble Supreme Court passed following interim Order on 25th February, 2022: “UPON hearing the counsel the Court made the following O R D E R Issue notice. There shall be stay of the following in the meanwhile: 1. Corporate Insolvency Resolution Process of the Respondent No.2; and 2. judgment and final order dated 16.12.2021 passed by the NCLAT in company Appeal (AT) (insolvency) No. 128/2021” 4. The IRP Mr. Ranjeet Kumar Verma was removed and in his place Mr. Mukesh Kumar Jain (The Appellant herein) was appointed as RP. RP filed an I.A. No. 142419/2022 in Civil Appeal No. 2661 of 2022 seeking certain directions from the Hon’ble Supreme Court. On 31st January, 2023, Resolution Professional issued a letter to Respondent No. 1 informing that contract of Respondent No. 1 expired on 31st May, 2022 and after taking over charge by the RP, RP has continued month to month upon expiry of contract on 31st May, 2022 it was further communicated that Respondent No. 1 has already attained the age of 60 years, the RP relieved the Respondent No. 1 from his 4 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 post of Executive Editor with effect from 01st February, 2023. The Respondent No. 1 after receipt of Letter dated 31st January, 2023 filed I.A. in the Hon’ble Supreme Court being I.A. vide Diary No. 65621 of 2023 bringing on record the letter dated 31st January, 2023 terminating service of Respondent No. 1 and seeking direction from the Hon’ble Supreme Court to initiate contempt proceedings for disobedience of the Interim Order dated 25th February, 2022 passed by the Hon’ble Supreme Court in the Civil Appeals. A defect was reported in the said application by the Registry. RP has filed I.A. No. 964 of 2023 before the NCLT restraining the Respondent No. 1 from entering into the office of the Corporate Debtor. Respondent No. 1 filed I.A. No. 2403 of 2023 before NCLT challenging his removal, the Adjudicating Authority vide order dated 30th May, 2023 allowed the I.A. No. 2403 of 2023 and dismissed the I.A. No. 964 of 2023 as infructuous. Two appeals were filed challenging the Order dated 30th May, 2023 in this Tribunal being Company Appeal (AT) Ins. No. 930- 931 of 2023 by Resolution Professional and another Company Appeal (AT) Ins. No. 943-944 of 2023 on behalf of Mr. Amit Goel, the suspended director. 5. Both the appeals were heard by this Tribunal and this Tribunal passed an Interim Order on 24th July, 2023. The Adjudicating Authority vide Order dated 30th May, 2023 has issued three directions which have been noticed in paragraph 1 of the Interim Order dated 24th July, 2023 which is to the following effect: “24.07.2023: These two appeals have been filed against the same order dated 30.05.2023 on an I.A. No. 2403 of 2023 filed by Respondent No. 1. 5 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 Adjudicating Authority has allowed the I.A. and issued direction in paragraph16 to the following effect: …. “16. After considering the rival contentions and perusing the order passed by the Hon’ble Supreme Court on 25.02.2022, we are of the considered view that the Resolution Professional Company Appeal (AT)(Insolvency) No. 930-931 & 943-944 of 2023 Page 2 of 8 has committed an error in not handing over the management of the affairs of the Corporate Debtor to the directors/only management. The actions of the Resolution professional after the order dated 25.02.2022 passed by the Hon’ble Supreme of India are without any authority since once the CIRP has been stayed the Resolution Professional could not have taken any further action. We, therefore, feel it appropriate to direct that all actions taken by the Resolution Professional after the stay order passed by the Supreme Court of India on 25.02.2022 are without any authority and unsustainable and therefore, we pass the following directions :- 1. “The Resolution Professional shall immediately hand over the management of the Corporate Debtor to the CEO/Management of the CD. 2. All actions taken by the Resolution Professional after the order dated 25.02.2022 passed by the Hon’ble Supreme Court of India including the removal of the Applicant and appointment of Mr. Vishal Bakshi are declared to be null and void. 6 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 3. Status, public position of the Corporate Debtor as it was before passing of the order dated 25.02.2022 by Hon’ble Supreme Court of India shall be restored back.” …” 3. In IA No.2043 of 2023 which was filed by the Respondent No.1, following prayers have been made:- “(I) Allow the application of the Applicant and Quash the decisions of removal of the Applicant being illegal and void as done by RP without any authority and against the provisions of IBC. (II) Quash the decisions of the appointment of Mr. Vishal Bakshi, being illegal and void as done by RP without any authority and against the provisions of IBC. (III) Direct the RP to hand over the management of day-to-day affairs of the Corporate Debtor to the CEO/Management Board immediately in view of the order dated 25.02.2022 passed by the Hon'ble Supreme Court (IV) Suspend the RP for his illegal acts immediately and direct him to refund the salary to the Company derived by him illegally during this stay period. (V) Pass an ad-interim order in terms of the above prayers. (VI) Pass any other necessary orders or directions as this Hon'ble Tribunal may deem fit and proper in view of the above- mentioned facts and circumstances.” 4. In application filed by the Resolution Professional being IA No.964 of 2023, Resolution Professional prayed for following prayers:- "Pass interim/final directions to the Non-Applicant No. 1 to not to enter into the office premises of the Corporate Debtor and/or to obstruct the working of the Corporate Debtor carried out under the control of the Applicant Resolution Professional:7 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 Pass interim/final directions to the Non-Applicant No. 2 to provide necessary assistance and support to undersigned Resolution Professional in discharge of his duties as per Code; Pass necessary further order/ directions to the applicant Resolution Professional about this status as questioned by the Non-Applicant No. 1 herein; Issue such necessary orders as may be deemed fit in the matter by Hon'ble Tribunal." 5. The Adjudicating Authority by Order dated 30.05.2023 allowed the IA No.2403 of 2023 and issued directions in paragraph 16 which we have already extracted above. The Adjudicating Authority disposed of the IA No.964 of 2023 filed by the Resolution Professional observing that in view of the order passed in IA No.2403 of 2023, no further directions are needed in the matter. 6. Learned Counsel appearing in both the above sets of Appeal have challenged the order dated 30.05.2023 passed in IA. No. 2403 of 2023 and IA No.964 of 2023. The submissions advanced in both set of Appeals being common, we proceed to notice the said submissions. 7. Learned Counsel for the Appellant submits that against the order passed by this Appellate Tribunal dated 16.11.2023, Mr. Navin Kumar Upadhyay, the Respondent No.1 in both the Appeals has already filed Civil Appeal being Civil Appeal No.2662 of 2022 where interim order was passed by the Hon’ble Supreme Court on 25.02.2022 which order is still continuing and after issuing the letter dated 31.01.2023 by Resolution Professional informing that his contract has expired on 31.05.2022 he having attained 60 years of age, he has been relieved w.e.f. 01.02.2023. Respondent No.1- Mr. 8 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 Navin Kumar Upadhyay filed an application vide Diary No.6561 of 2023 bringing before the Hon’ble Supreme Court the order dated 31.01.2023 regarding termination of service which application is still pending, hence, it is not open for the Respondent No.1 to file IA No.2403 of 2023 before the Tribunal. It is submitted that the Adjudicating Authority committed error in observing that in view of the stay of the CIRP, the Suspended Directors have to be reinstated relying on the law laid down by this Appellate Tribunal in Company Appeal (AT) (Insolvency) No.1323 of 2023- “Ashok Kumar Tyagi vs. UCO Bank” whereas no such proposition is laid down by this Tribunal. The Adjudicating Authority misread the legal position as clarified by this Tribunal in ‘Ashok Kumar Tyagi’ (supra) and has wrongly directed for handing over charge by the Resolution Professional to the management of the Corporate Debtor. It is submitted that the matter being pending in the Hon’ble Supreme Court, it is open for the Respondent No.1 to make any such other application as may be advised but approaching the Adjudicating Authority and obtaining an order was uncalled for. It is submitted that it was the Resolution Professional who is carrying out day-to-day business since the Resolution Professional has not yet been discharged. Resolution Professional having taken a decision not to continue Respondent No.1 w.e.f. 01.02.2023, the Respondent No.1 has no right to claim continuance. It is submitted that the Respondent No.1 is wrongly claiming that he is entitled to continue as Executive Editor of the Corporate Debtor and receive salaries whereas the Corporate Debtor is running in losses and it is the Resolution Professional who is running the Corporate Debtor for day-to-day function and it is for the 9 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 Resolution Professional to take a decision regarding continuance of staff of the Corporate Debtor and to engage any staff during currency of CIRP. 8. Learned Counsel appearing for the Respondent No.1 refuted the submissions of the Appellant and submits that the mere fact that the Hon’ble Supreme Court has stayed the CIRP does not denude the Adjudicating Authority from exercising jurisdiction with all other matters which arise during CIRP. It is submitted that the Respondent No.1 has not challenged the order dated 31.01.2023 in Civil Appeal. It has only filed an IA to initiate Contempt Proceeding against the Resolution Professional who has violated the order dated 25.02.2022, on which application, no order has yet been passed. It is submitted that the Respondent No.1 has been continuing as Executive Editor and even after 01.02.2023, he has continued as Executive Editor which is apparent from the publication of the newspaper where name of the Respondent No.1- Mr. Navin Kumar Upadhyay has been mentioned as Executive Editor. It is submitted that the Resolution Professional has no jurisdiction to remove the Respondent No.1 as Executive Editor and appoint another person in his place. The Adjudicating Authority has rightly passed an order relying on the interim order passed by the Hon’ble Supreme Court dated 25.02.2022. An interim order was passed by this Appellate Tribunal in the present Appeals on 24.07.2023 wherein in paragraph 8 of the interim order following was observed:- “8. We are of further view that Adjudicating Authority ought not to have entertained the application when the matter is pending before the Hon'ble Supreme 10 Company Appeal (AT) (Ins.) No.930-931 & 943-944 of 2023 Court and was extensively heard by the Hon'ble Supreme Court on several dates. We are thus of the view that the direction issued by the Adjudicating Authority in paragraph 16(1) & (3) deserves to be stayed and we direct that the directions in (1) (3) of paragraph-16 be remain stayed.” 9. The Respondent No.1 has filed another application being IA No.4138- 4139 of 2023 in Company Appeal (AT) (Insolvency) No.930-931 of 2023 where following prayers have been made:- "A. Set aside/quash the communication contained in the email dated 20.08.2023 issued by the Resolution Professional effectively removing the Applicant as the Executive Editor of the newspaper and appointing Ms. Shobori Ganguli as Executive Editor (Editor in chief) of newspaper run by Corporate Debtor vide email dated 20.08.2023; and B. Reinstate the Applicant, Mr. Navin Kumar Upadhyay as the Executive Editor of the newspaper of Corporate Debtor in accordance with Paragraph No. 16 (2) of Order dated 30.05.2023 passed by the Adjudicating Authority read with Order Dated 24.07.2023 and Order Dated 10.08.2023 passed by this Hon'ble Tribunal and also direct the payment of contractual dues/arrears of the Applicant since January 2023 onwards; C. Remove and direct the Insolvency and Bankruptcy Board of India to investigate and initiate disciplinary proceedings against the Resolution Professional, Mr Mukesh Jain, and direct the new Resolution Professional to initiate proceedings in accordance