LexR. RAGHAVENDRAN versus C. RAJA JOHN & ORS.
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[2023] 14 S.C.R. 719 : 2023 INSC 849 719 CASE DETAILS R. RAGHAVENDRAN v. C. RAJA JOHN & ORS. (Civil Appeal No. 2552/2022) SEPTEMBER 13, 2023 [SANJAY KISHAN KAUL AND SUDHANSHU DHULIA, JJ.] HEADNOTES Issue for consideration: Whether the observations made by NCLAT in the impugned judgment, in the context of the judgment of the Tribunal in Saravana Global Holdings Ltd. & Anr. Vs. Bafna Pharmaceuticals Ltd. & Ors., that if the Corporate Debtor is an MSME it is not necessary for the Promoters to compete with other Resolution Applicants to regain the control of the Corporate Debtor, can be sustained or not in the conspectus of the observations in the Bafna’s case, the appeal where against was dismissed by the Supreme Court. Insolvency and Bankruptcy Code, 2016 – Corporate debtor, an MSME – Impugned judgment in view of the observations made in Bafna’s case observed that if a corporate debtor is an MSME it is not necessary for promoters to compete with other resolution applicants to retain control of the corporate debtor – Legality: Held: In the factual scenario of Bafna’s case, the observations that in “exceptional circumstances” if a corporate debtor is an MSME it is not necessary for promoters to compete with other resolution applicants to retain control of the corporate debtor, were made in the context of (a) before the constitution of CoCs or (b) in terms of s.12A of the Code on the basis of an off er given by the promoter in such a case – In the impugned judgment, there is no discussion on the special circumstances other than the reference to judgment in Bafna’s case – It is predicated on a broad reasoning as if ipso facto there is no need to call other proposals if corporate debtor is an MSME – This is not the correct position of law – Further, all that was done by this 720 SUPREME COURT REPORTS [2023] 14 S.C.R. Court in Saravana Global Holdings Ltd. & Anr. Vs. Bafna Pharmaceuticals Ltd. & Ors. was to simply uphold the order of the Tribunal by observing that no case for interference is made out, nothing more and nothing less – In the present case, the appellant-Resolution Professional cannot be faulted for calling for other proposals in which the proposal given by respondent No.1- Promoter of the MSME was also to be examined, put them to voting before the CoCs and declare the results – To that extent, the impugned order is set aside – Contempt proceedings or any other proceedings emanating from the premise of the observations in paragraph Nos. 32 and 34 in the impugned judgment set aside – Further, on request, a one time window given to the respondent No.1 on account of the fact that he has submitted an OTS (One Time Settlement) proposal to the fi nancial creditors and are hopeful of the acceptance of the same – Beyond the window of two months, if the OTS is not accepted, the appellant will be free to declare the results of the e-voting qua all the proposals. [Paras 7, 11, 14-17, 21] LIST OF CITATIONS AND OTHER REFERENCES Kunhayammed & Ors vs State Of Kerala & Anr. (2000) 6 SCC 359: [2000] 1 Suppl. SCR 538 – referred to. Saravana Global Holdings Ltd. & Anr. Vs. Bafna Pharmaceuticals Ltd. & Ors Company Appeal (AT) (Insol.) No. 203 of 2019 – referred to. OTHER CASE DETAILS INCLUDING IMPUGNED ORDER AND APPEARANCES CIVIL APPELLATE JURISDICTION : Civil Appeal No.2552 of 2022. From the Judgment and Order dated 01.12.2021 of the National Company Law Appellate Tribunal, Chennai in Company Appeal (AT) (CH) (INS) No.207 of 2021. Appearances: Aditya Madaan, G. P. Madaan, Deep Bisht, Ms. Aishwarya Adhlaka, Ashish Makhija, Sumit Kumar, Advs. for the Appellant. Jayant Mehta, Sr. Adv., Goutham Shivshankar, Ms. Nikita Sethi, Sudhir Naagar, Gautam Singhal, Vikrant Mehta, Advs. for the Respondents. 721 JUDGMENT / ORDER OF THE SUPREME COURT JUDGMENT SANJAY KISHAN KAUL, J. 1. The present appeal has been preferred against the impugned judgment of NCLAT dated 01.12.2021 on a limited aspect. It is not necessary for us to delve into all the factual scenario which gave rise to these proceedings. Suffi ce to say that there is no controversy before us that the respondent No.1 is the promoter of the Micro, Small & Medium Enterprises ( for short ‘MSME’) -Springfi eld Shelters Pvt. Ltd. The proceedings against the said entity are pending under the Insolvency and Bankruptcy Code, 2016 (for short “the Code”) initiated on 12.2.2020 and the appellant before us is the Resolution Professional. 2. It is suffi
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