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2025 Supreme(Online)(NCLT) 804
NATIONAL COMPANY LAW TRIBUNAL
Shri. Rajeev Bhardwaj, J, Shri. Sanjay Puri, T
Consortium of Ms. Karishma Jain, M/s. Jupiter City Developers (I) Limited, M/s. Adwaita Navigations Private Limited – Appellant
Versus
M/s. XL Energy Limited – Respondent
C.P (IB) No.16/7/HDB/2023
For the Applicant: Mr. Kunal Kanoongo
For Respondent No. 1: Mr. Prashant Raj, Mr. Anirban Bhattacharje
For Respondent No. 3: Mr. Mahesh Kumar
For Respondent No. 4: Ms. B. Ramya
For Respondent No. 5: Mr. Rishika Kumar, Mr. Amir Bavani
The IBC provisions for corporate restructuring override prior regulatory non-compliance, mandating relisting of shares post-approval of the Resolution Plan.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 31 and 238 - SEBI Delisting Regulations, 2021 - Corporate restructuring - Application by Successful Resolution Applicant for relisting of delisted shares - The Resolution Plan's provisions for relisting cannot be ignored; statutory barriers imposed by the SEBI cannot override the IBC's provisions. (Paras 3.17, 9.1, 9.3, 9.5)
(B) Legal Effect of Resolution Plans - Once approved, they become binding on all stakeholders, including statutory authorities; failure to implement approved plans undermines the intent of IBC's clean slate principle. (Paras 9.1, 9.3)
Facts of the case:
The application was filed following the admission of M/s. XL Energy Limited into the Corporate Insolvency Resolution Process. The Successful Resolution Applicant sought to relist shares, encountering denials citing prior regulatory non-compliance. The Tribunal aimed to clarify the coexistence of the IBC and SEBI regulations.
Findings of Court:
Re-listing is integral to the Resolution Plan, hence Respondents must facilitate this without past liability conditions. Jurisdiction under IBC includes the implementation of approved plans despite contrary stock exchange regulations.
Issues: Whether the IBC supersedes SEBI's Delisting Regulations in cases of corporate resolutions; the legal binding effect of Resolution Plans after approval.
Ratio Decidendi: Past liabilities of the Corporate Debtor are extinguished upon approval of a Resolution Plan, and the IBC's provisions override inconsistent statutory regulations. The refusal of Relisting by Respondents hampers compliance and objectives of the IBC.
Result: Application granted; Respondents ordered to proceed with re-listing the equity shares within the stipulated timeframe.
| Table of Content |
|---|
| 1. application for relisting of corporate shares. (Para 1 , 2) |
| 2. arguments regarding compliance with sebi regulations. (Para 6) |
| 3. court's observation on binding nature of resolution. (Para 9) |
| 4. final order for relisting without past compliance. (Para 10) |
ORDER
1. The present application is filed by the Consortium of Ms. Karishma Jain and Ors., the Successful Resolution Applicant of M/s. XL Energy Limited, inter alia, seeking the following reliefs:
a. To direct the Respondent No. 1 and Respondent No. 2 to consider the request of the Applicant herein afresh to re-list the Corporate Debtor entity forthwith and without any demur.
b. To direct Respondent No 3 and Respondent No. 4 to activate the Corporate Debtors relevant credentials required to implement the Resolution Plan.
c. To direct Respondent No. 3 and 4 as per clause 7.1.3.1 & 7.1.3.2 to take all the necessary steps/for cancellation /removal of all the shares respectively in the name of the Corporate Debtor with ISIN No. INE183H01011.
d. To direct Respondent No. 3 and 4 to furnish a list of shareholders as to enable the Applicant to issue fresh shares to the Existing shareholder & to credit the Demat account of the Shareholders with the fresh shares to be issued pursuant to the Resolution Plan & extinguish and waive all the fines and penalties and dues of the CD prior to Insolvency Commencement date in terms of the Approved Resolution Plan.
2. Application:
(i) M/s. Invent Assets Securitisation and Reconstruction Private Limited (Financial Creditor/FC) filed a Company Petition bearing CP (IB) No. 16/7/HDB/2023 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s. XL Energy Limited (Corporate Debtor/CD). This Authority, vide Order dated 27.03.2023 admitted the CD into CIRP by appointing Mr. Vijay Pitamber Lulla as the Interim Resolution Professional (IRP), who was subsequently confirmed as the Resolution Professional (RP) by the Committee of Creditors (CoC).
(ii) Pursuant to publication of Form G (invitation for Expression of Interest), the Applicant emerged as the Successful Resolution Applicant (SRA), after receiving approval from COC with 73.68% voting for the Resolution Plan submitted by the Applicant.
(iii) The RP (Respondent No. 5/R5) thereafter filed IA (IBC) (Plan) No. 5 of 2024 under Section 31 of the IBC, seeking for approval of the Resolution Plan submitted by the Applicant, which was approved by this Authority on 19.04.2024.
(iv) The CD, a publicly Listed Company, had its equity shares compulsorily delisted for a period of ten (10) years due to violations under the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (SEBI Delisting Regulations, 2009). The Resolution Plan proposed by the Applicant included re-listing of the CD’s shares, which was duly approved by the CoC.
(v) This Authority, vide Order dated 19.04.2024 in IA No. 5 of 2024, made the following observations:
“As regards to the reliefs sought, the Corporate Debtor has to approach the authorities concerned for such reliefs and we trust the authorities concerned will do the needful.”
(vi) In accordance with the approved Resolution Plan and this Authority’s direction, R5 addressed letters dated 21.04.2024 to Respondents Nos. 1 and No. 2, requesting re-listing of the CD’s equity shares.
(vii) The Applicant, in furtherance of the request, followed up with Respondent No. 1 regarding the status of the re-listing request. However, the request was rejected by Respondent No. 1 under Regulation 40(1)(b) of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (SEBI Delisting Regulations, 2021). This rejection was communicated to the Applicant via email dated 29.07.2024.
(viii)It is pertinent to note that Section 32A of the IBC was introduced to provide immunity to the CD’s new management from prior offences once a Resolution Plan is approved.
