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The National Company Law Tribunal (NCLT), Chennai, has thrown out a case that was devoid of merits, in law and on facts. To dissuade other applicants from filing similar applications and wasting the judicial time of the Tribunal, the NCLT dismissed the application as not maintainable with a cost of Rs 5 lakh payable to the PM’s National Relief Fund.
In the matter of Karaikal Port Private Ltd (KPPL), the applicant -- Phoenix ARC Private Ltd (Trustee of Phoenix Trust) -- a financial creditor in Mumbai, filed an application directing the appropriate authority to investigate the fraudulent financial transaction between Omkara ARC, Corporate Debtor/KPPL and Adani Ports and Special Economic Zone Ltd (APSEZ).
The application also sought to stay all further proceedings pursuant to the Tribunal’s order passed in April, and also stay the constitution of the Committee of Creditors until the investigation by the appropriate authority was completed.
The applicant’s counsel alleged that Omkara ARC and the Corporate Debtor conspired with APSEZ and fraudulently made this Tribunal pass an order in April by which the Tribunal admitted the application and initiated the Corporate Insolvency Resolution Process against the Corporate Debtor. It was also stated that in the guise of invoking the provisions of IBC, 2016, APSEZ would indirectly take over the majority voting share of 96.10 per cent through Omkara ARC and, therefore, would solely control the decision-making powers of the proposed Committee of Creditor.
From the submissions made by the counsels of both the parties, it was seen that there is serious infighting between the two financial creditors of the Corporate Debtor, which had resulted in filing this application, said the order issued by R Sucharitha, Member, Judicial and Sameer Kakar, Member, Technical of NCLT, Chennai.
During the arguments, the applicant’s counsel submitted that Omkara ARC holds 96 per cent of the voting share in the CoC and they have the right to decide the outcome of the Corporate Debtor’s Resolution Plan. Such an argument was preposterous in view of the fact that even before the first CoC meeting was conducted, the application was filed apprehending the outcome of what might happen in the last CoC meeting.
All the allegations made by the applicant’s counsel were premature and mere conjecture. “We do not find any merit in apprehending, as to what might happened in the last CoC meeting at this point of time, even before the first CoCC meeting is conducted. Hence, this application is devoid of merits, in law and facts,” the order said.
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