In the matter of LC Core Oppotunities Fund Vs. Cerestra Advisors Pvt. Ltd. & Anr. CA(AT)(Ins) No. 242-243 of 2020

‘M/s. Cerestra Advisors Private Limited’- (‘Operational Creditor’) moved two separate applications under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“I&B Code” for short) one against ‘M/s. MN Bio-Technology Private Limited’ (‘Corporate Debtor’) and another against ‘M/s. MN Takshila Industries Private Limited’ (another ‘Corporate Debtor’).

2. Both the applications under Section 9 were admitted by two separate orders both dated 4th February, 2020 passed by the Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, Hyderabad.

3. Initially, when the matter was taken up, learned counsel for the Appellant in both the appeals took plea that ‘M/s. Cerestra Advisors Private Limited’ does not come within the meaning of ‘Operational Creditor’ in absence of any ‘operational debt’ as defined under Section 5(21) of the ‘I&B Code’. Both the agreements were relied on to show that ‘M/s. Cerestra Advisors Private Limited’ is ‘Operational Creditor’ of a third party which is a foreign entity with whom there has been an ‘existence of dispute’ and now the application under Section 9 has been triggered against the Indian entities.

However, an alternative submission has been made that the Appellant who is the shareholder of both the ‘Corporate Debtor(s)’ intends to settle the matter with ‘M/s. Cerestra Advisors Private Limited’.

4. Learned counsel appearing on behalf of ‘M/s. Cerestra Advisors Private Limited’ accepted that the ‘Committee of Creditors’ have not been constituted.

5. In spite of service of notice, the ‘Interim Resolution Professional’ has not appeared nor disputed the aforesaid fact.

6. There is nothing on the record to suggest that the ‘Committee of Creditors’ have been constituted till date.

7. Learned counsel appearing on behalf of ‘M/s. Cerestra Advisors Private Limited’ produced a letter dated 12th March, 2020 to suggest that the parties have settled with regard to the invoices, in question, as extracted below:

8. Copies of the Demand Draft have been handed over, as extracted hereunder:

9. In view of the fact that the parties have settled the matter and the ‘Committee of Creditors’ in both the ‘Corporate Insolvency Resolution Processes’ has not been constituted, it will not be desirable to proceed with the ‘Corporate Insolvency Resolution Processes’ against two of the ‘Corporate Debtors’ for default of certain amount in favour of the ‘Operational Creditor’, which stands settled, and without going into the merits of the case, we in exercise of powers conferred under Rule 11 of the NCLAT Rules, 2016 accept the settlement and set aside the impugned order dated 4th February, 2020 passed in CP (IB) No. 241/9/HDB/2019 and the order dated 4th February, 2020 passed in CP (IB) No. 243/9/HDB/2019 and dispose of both the applications under Section 9 filed by of ‘M/s. Cerestra Advisors Private Limited’ as withdrawn. Both the cases are remitted to the Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, to decide the cost of ‘Corporate Insolvency Resolution Processes’ incurred by the ‘Interim Resolution Professional’.

10. Taking into consideration the fact that the ‘Corporate Insolvency Resolution Processes’ were initiated about a month back i.e. on 4th February, 2020, we assess the fees of the ‘Interim Resolution Professional’ at Rupees One Lakh per month for each of the ‘Corporate Insolvency Resolution Processes’. The ‘Interim Resolution Professional’ will show as to what is the exact amount incurred towards the ‘Corporate Insolvency Resolution Processes’ costs and place the same before the Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench. Both the parties are directed to bear the fees of ‘Interim Resolution Professional’ and cost of ‘Corporate Insolvency Resolution Processes’ and pay it within three weeks from the date of decision by the Adjudicating Authority. The ‘Corporate Debtor’ is released from the rigours of ‘Corporate Insolvency Resolution Process’. The ‘Interim Resolution Professional’ will handover the records and assets of the ‘Corporate Debtor’ to the Promoters.

Both the Appeals are allowed with aforesaid observations and directions. No costs.

[Justice S.J. Mukhopadhaya]

Chairperson

(Justice Bansi Lal Bhat)

Member(Judicial)