2018 (8) TMI 2063 - AT - Insolvency and Bankruptcy

Appeal Dismissed: Timely Resolution Plan Key in Liquidation Process

V. Navaneetha Krishnan Versus Central Bank of India, Coimbatore & Another

The National Company Law Appellate Tribunal dismissed both appeals, emphasizing that the Committee of Creditors' decision for liquidation was valid due to ... Liquidation of Corporate Debtor - resolution plan was submitted by him - without giving any opportunity to the appellant, the ‘Committee of Creditors’ decided to request the Adjudicating Authority for liquidation - HELD THAT:- Taking into consideration the fact that the ‘resolution plan’ was submitted on 178th day and on the next day i.e. 179th day the ‘Committee of Creditors’ decided to go for liquidation as 180th day was to be completed and order under Section 31 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) was required to be passed and in absence of any good reason for extension of time, we are not inclined to grant any relief. In view of Section 12A even during the liquidation period if any person, not barred under Section 29A, satisfy the demand of ‘Committee of Creditors’ then such person may move before the Adjudicating Authority by giving offer which may be considered by the ‘Committee of Creditors’, and if by 90% voting share of the ‘committee of creditors’, accept the offer and decide for withdrawal of the application under Section 7 of the I&B Code, the observation as made above or the order of liquidation passed by the Adjudicating Authority will not come in the way of Adjudicating Authority to pass appropriate order. Appeal dismissed. Issues involved:1. Submission of resolution plan and decision for liquidation without giving opportunity to the appellant.2. Timeliness of submission of resolution plan.3. Dispute regarding submission of resolution plan through a Director.4. Decision of Committee of Creditors for liquidation.5. Provision under Section 12A for satisfying Committee of Creditors during liquidation.Issue 1: Submission of resolution plan and decision for liquidation without giving opportunity to the appellantThe appellant raised a grievance that the Committee of Creditors decided on liquidation without providing an opportunity to consider the resolution plan submitted by the appellant. The Resolution Professional argued that the appellant submitted the plan on the 178th day, just two days before the completion of the 180-day period. Due to the late submission, the application for liquidation was moved before the Adjudicating Authority.Issue 2: Timeliness of submission of resolution planThe Resolution Professional stated that no resolution plan was submitted within the stipulated time, and the plan submitted by the appellant was delayed, being presented on the 178th day. The Committee of Creditors decided on liquidation on the 179th day, as the 180th day marked the deadline for passing an order under Section 31 of the Insolvency and Bankruptcy Code, 2016 (I&B Code). No extension was granted due to the absence of a valid reason.Issue 3: Dispute regarding submission of resolution plan through a DirectorThe counsel for the Central Bank of India contended that the resolution plan was submitted through a Director, a fact disputed by the appellant's counsel. This discrepancy added a layer of complexity to the submission process of the resolution plan.Issue 4: Decision of Committee of Creditors for liquidationThe Committee of Creditors decided on liquidation promptly after the submission of the resolution plan on the 178th day, leading to the application for liquidation before the Adjudicating Authority. The Tribunal, considering the timeline and lack of extension reasons, declined to provide any relief to the appellant.Issue 5: Provision under Section 12A for satisfying Committee of Creditors during liquidationSection 12A allows for a person, not barred under Section 29A, to satisfy the demands of the Committee of Creditors even during the liquidation phase. If the Committee of Creditors, with a 90% voting share, accepts an offer and decides to withdraw the application under Section 7 of the I&B Code, the Adjudicating Authority can pass an appropriate order disregarding the previous liquidation decision. Both appeals were dismissed with these observations, and no costs were imposed.This detailed analysis covers the issues raised in the judgment, providing a comprehensive understanding of the legal complexities and decisions made by the National Company Law Appellate Tribunal.