Tribunal Grants Voting Rights in CoC Meeting; Revised Plan Due in Extended CIRP Period, Liquidation Possible if Delayed.

The Tribunal granted the applicant voting rights in the CoC meeting, following the NCLAT's precedent. It directed the submission of a revised resolution plan within an extended CIRP period, excluding time from the NCLAT's order. If no plan is received within a month, the AA may initiate liquidation proceedings.

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Issues Involved:
1. Voting rights of financial creditors under the Insolvency & Bankruptcy Code, 2016.
2. Admittance of claims by corporate guarantee holders.
3. Consideration and approval of the resolution plan.
4. Extension of the Corporate Insolvency Resolution Process (CIRP) period.
5. Liquidation process initiation.

Issue-wise Detailed Analysis:

1. Voting Rights of Financial Creditors:
The applicant, Phoenix ARC Pvt. Ltd., filed CA No.406/2018 to set aside the minutes of the 9th CoC meeting held on 16.08.2018, where the Resolution Professional (RP) refused to grant voting rights to the applicant. The RP argued that under Section 5(28) of the Insolvency & Bankruptcy Code, 2016, the financial creditor is entitled to voting rights proportional to the debt owed, which had not crystallized in this case. The Tribunal referenced the NCLAT decision in the case of Andhra Bank, which held that corporate debtors have counter indemnity obligations for guarantees given, thus qualifying as financial creditors under Sections 5(7) and 5(8) of the Code.

2. Admittance of Claims by Corporate Guarantee Holders:
The RP initially rejected the claims of corporate guarantee holders, including the applicant, on the grounds that the debt was not crystallized. However, following the NCLAT's decision in the Andhra Bank case, the RP admitted the claims of all corporate guarantee holders in accordance with the lead banker’s claim. The Tribunal directed that the applicant should have voting rights in the CoC meeting, similar to those granted to Andhra Bank, as per the NCLAT's order.

3. Consideration and Approval of the Resolution Plan:
The resolution plan submitted by M/s New Ram Traders was discussed in the 14th CoC meeting, where it was noted that the offer was lower than the liquidation value, leading to its rejection. The Tribunal emphasized that objections to the resolution plan could only be raised if it did not comply with Section 30(2) of the Code. The Tribunal directed the resolution applicant to submit a final revised resolution plan, which the RP was to present to the CoC for consideration.

4. Extension of the CIRP Period:
The resolution applicant, New Ram Traders, filed CA No.607/2018 to extend the CIRP period until 03.01.2019 or until the CoC's decision on the revised plan. The Tribunal noted the Supreme Court's stance that time taken in legal proceedings should be excluded from the 270-day computation for the CIRP. Consequently, the Tribunal excluded the period from the NCLAT's order on 13.07.2018 until the present date, granting an additional month for completing the process.

5. Liquidation Process Initiation:
The RP filed CA No.587/2018 to initiate the liquidation process under Section 33 of the Code, as the approved resolution plan was rejected by the CoC. The Tribunal directed that if no revised resolution plan is received within one month, the Adjudicating Authority (AA) should consider appropriate suo moto action for liquidation.

Conclusion:
The Tribunal disposed of CA No.406/2018 by granting the applicant voting rights in the CoC meeting. CA No.607/2018 was disposed of with directions for the submission and consideration of a final revised resolution plan within a specified timeframe, excluding the period from the NCLAT's order to the present date from the CIRP timeline. The Tribunal emphasized the importance of adhering to the Code's objectives and timelines, while also considering the need for a fair resolution process.

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