Tribunal Upholds Approved Resolution Plan, Emphasizes Timely Value Maximization

The Tribunal dismissed the application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, on June 30, 2021. The Applicants' request to set aside the approved Resolution Plan and submit a new plan was denied due to the advanced stage of proceedings, emphasizing adherence to the time-bound nature of the Corporate Insolvency Resolution Process and the need for value maximization within set deadlines. The Tribunal upheld the approved Resolution Plan, highlighting the importance of timely resolution and maximizing value promptly.

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Issues:
Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 to direct consideration of a Resolution Plan and set aside another plan.

Analysis:
1. The Applicants, erstwhile promoters of the Corporate Debtor, sought to submit a Resolution Plan under Section 30(1) of the Code. They claimed entitlement due to the Corporate Debtor's MSME status and referred to a decision by NCLAT emphasizing asset value maximization for going concern. They argued that having mobilized funds and the failure of the 4th Respondent's plan, they should be allowed to settle all dues, benefiting all stakeholders.

2. The Resolution Professional clarified that the existing CoC continued as the Monitoring Committee, absolving him of duties. The Applicants, ex-directors of the Corporate Debtor, claimed MSME status based on an expired certificate. The Tribunal noted the absence of a valid MSME certificate for the Corporate Debtor.

3. The provision under Section 240A exempts MSME Corporate Debtors from certain disqualifications under Section 29A, allowing non-wilful defaulters to bid for Resolution Plans. The Applicants contended the Corporate Debtor's MSME status based on an expired certificate, but no valid proof was presented during the proceedings.

4. The Resolution Process timeline was outlined, with the Resolution Plan approved on 08.01.2021. The Tribunal highlighted the time-bound nature of the process and the need for value maximization within set deadlines. Given the late stage of proceedings, the Tribunal dismissed the application to set aside the approved Resolution Plan and allow the Applicants to submit a new plan.

5. The Tribunal emphasized the importance of adhering to the time-bound nature of the Corporate Insolvency Resolution Process and maximizing value promptly. Due to the advanced stage of proceedings, the Tribunal deemed it inappropriate to entertain the application to replace the approved Resolution Plan.

6. The Tribunal dismissed the application under IA(IBC)/74/KOB/2021 on June 30, 2021, maintaining the decision to uphold the approved Resolution Plan and not allow the Applicants to submit a new plan at a later stage.

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