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of <h1>Tribunal Orders Re-Bidding Process, Emphasizes Fairness and Transparency</h1> <h3>Punjab National Bank Versus City Mall Vikash (P.) Ltd.</h3> Punjab National Bank Versus City Mall Vikash (P.) Ltd. - [2021] 226 Comp Cas 693 (NCLT - Kol) Issues Involved:1. Approval of the Resolution Plan by the Committee of Creditors (CoC).2. Objections by M/S. PHIL Mineral Benefication & Energy Pvt. Ltd. (PHIL).3. Objections by M/S. Rituraj Steel Private Limited (H3 bidder).4. Compliance with the Insolvency and Bankruptcy Code (I&B Code) and CIRP Regulations.5. Transparency and fairness in the bidding process.Detailed Analysis:1. Approval of the Resolution Plan by the Committee of Creditors (CoC):The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor by Punjab National Bank. The Resolution Plan submitted by Mr. Amresh Shukla, the Interim Resolution Professional (IRP), was approved by the CoC with 84.7% voting shares. The Resolution Plan was claimed to comply with all provisions of the I&B Code, 2016, and CIRP Regulations.2. Objections by M/S. PHIL Mineral Benefication & Energy Pvt. Ltd. (PHIL):PHIL objected to the approval of the Resolution Plan on three grounds:a. Discrimination in the resolution bid of the H1 bidder.b. Non-compliance with the process by the Resolution Professional and CoC.c. Non-compliance with Regulation 36E regarding the invitation of Expression of Interest (EOI).PHIL claimed to be an associate of Rare Asset Reconstruction Limited (RARL) and participated in the resolution bid. However, the Tribunal found that PHIL had no locus standi as it did not submit any independent resolution plan or offer. The objections raised by PHIL were dismissed.3. Objections by M/S. Rituraj Steel Private Limited (H3 bidder):H3 objected on two main grounds:a. Lack of access to the data room and inspection of the Corporate Debtor's premises.b. Insertion of new points in the Resolution Plan, constituting a modification in violation of Regulation 36B(5).The Tribunal found these objections to be devoid of merit, noting that H3 had accessed the data room and the modifications requested were not substantial changes. The Tribunal concluded that the RP completed the CIRP in compliance with the Code and Regulations.4. Compliance with the Insolvency and Bankruptcy Code (I&B Code) and CIRP Regulations:The Tribunal examined whether the Resolution Plan complied with Section 30(2) of the Code and found that the process followed by the RP and CoC was not transparent. The Tribunal noted that the negotiations were conducted in a closed-door manner, lacking transparency and fairness, which is against the principles of natural justice.5. Transparency and fairness in the bidding process:The Tribunal observed that the bidding process lacked transparency, with one-to-one negotiations held in closed doors. There was no clear record of the final bid amounts being disclosed to all bidders. The Tribunal emphasized the need for a fair and transparent bidding process to ensure the maximization of the value of the Corporate Debtor's assets.Orders:1. The resolution plan of the H1 bidder, Shrawan Kumar Agarwal, is to be returned to the RP.2. The RP is directed to conduct a re-bidding process within 15 days and file the re-approved resolution plan by 31st December 2019.3. All three resolution applicants (H1, H2, and H3) are directed to submit revised bids in sealed covers within 5 days.4. The RP must convene a special CoC meeting to open the sealed bids in the presence of the resolution applicants and conduct open negotiations.5. If the highest bid does not exceed Rs. 102 Crores, the CoC may choose the best offer considering feasibility and viability.6. If H3 does not submit a revised bid at or exceeding Rs. 102 Crores, it is liable to pay a cost of Rs. 20 lakhs.7. C.A. (IB) No. 1577/KB/2019 is disposed of, and C.A.(IB) No. 1650/KB/2019 is dismissed with no order as to cost.8. The revised plan approved by the CoC must be filed by 1st January 2020.9. Free copies of the order to be served via email to all resolution applicants and the RP.10. Urgent certified copies of the order to be issued upon compliance with requisite formalities.
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