Tribunal approves Resolution Plan, dismisses objections in compliance with IBC. Moratorium lifted.

The tribunal dismissed Kundan Care Products Ltd.'s objections and approved Fortis Chemicals Pvt. Ltd.'s Resolution Plan in compliance with IBC provisions. The moratorium order ended, and records were to be sent to the Insolvency and Bankruptcy Board of India. Case CP(IB) No. 1439/KB/2018 was resolved, emphasizing adherence to the 270-day CIRP period and CoC decisions, following precedents limiting judicial review to IBC compliance and stakeholder protection.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP).
2. Evaluation and approval of Resolution Plans.
3. Objections to the Evaluation Process.
4. Compliance with Insolvency and Bankruptcy Code (IBC) provisions.

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The application (CP(IB) No. 1439/KB/2018) was filed by an Operational Creditor, an ex-employee of the Corporate Debtor (M/s. Alex Green Energy Pvt. Ltd.), claiming unpaid operational debt of Rs. 10,00,800/-. The Corporate Debtor, engaged in solar power generation, was unable to pay its debts due to operational disruptions caused by a storm. The application was allowed, initiating the CIRP and appointing Mr. Surya Kant Satapathy as the Interim Resolution Professional (IRP).

2. Evaluation and Approval of Resolution Plans:
The IRP continued the CIRP process, issuing public announcements and inviting Expressions of Interest (EOI). Six Resolution Plans were received and evaluated. The top three Resolution Applicants were called for negotiation, with Fortis Chemicals Private Limited emerging as the highest bidder with a bid of Rs. 11.07 Crores. The Committee of Creditors (CoC) approved the Resolution Plan of Fortis Chemicals Pvt. Ltd. with 95.15% voting share.

3. Objections to the Evaluation Process:
Kundan Care Products Ltd., ranked as H6, objected to the approval of the Resolution Plan on two grounds:
- The RP skipped Step-III of the evaluation process, denying the applicant an opportunity to present and negotiate their plan.
- The process was not transparent, as only the H1 bidder was called for negotiation.

The tribunal found these objections devoid of merit. Step-III was optional and at the discretion of the CoC, which chose to proceed with Step-IV, negotiating with the top three Resolution Applicants. The tribunal also noted that Kundan Care Products Ltd. had sufficient opportunities to participate and revise their bids but failed to do so timely and effectively.

4. Compliance with Insolvency and Bankruptcy Code (IBC) Provisions:
The tribunal emphasized the importance of adhering to the statutory period of 270 days for the CIRP and the commercial decisions of the CoC. The tribunal cited the Supreme Court's rulings in K. Sashidhar v. Indian Overseas Bank and the Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, which limited judicial review to ensuring compliance with the IBC and protecting the interests of stakeholders.

Conclusion:
The tribunal dismissed the application of Kundan Care Products Ltd. and approved the Resolution Plan of Fortis Chemicals Pvt. Ltd., which complied with all provisions of the IBC and CIRP regulations. The moratorium order ceased, and the RP was directed to forward all records to the Insolvency and Bankruptcy Board of India. The case CP(IB) No. 1439/KB/2018 was disposed of accordingly.

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