2021 (9) TMI 1332 - Tri - Insolvency and Bankruptcy

Tribunal orders timely consideration of Resolution Plans, stresses transparency in CIRP process.

Riddhi Siddhi Gluco Biols Limited Versus Sumit Binani, RP of KSK Mahanadi Power Company Limited and Ors.

The Tribunal directed the Resolution Professional (RP) and Committee of Creditors (CoC) to allow the Applicant to submit its Resolution Plan within two ... Acceptance of EOI - seeking to declare Applicant as a prospective resolution applicant in terms of Regulation 36A of CIRP Regulations - seeking to issue a fresh Form G inviting EOI - seeking restraint on CoC from proceeding ahead on the current rushed up process, thereby obtaining and approving any other resolution plan without considering the Resolution Plan of the Applicant - HELD THAT:- It is seen from the record that the RP and CoC allowed other group Companies of M/s. Jindal Power Ltd., to submit the Resolution Plan changing Form-G, although that group Company was not a Resolution Applicant at all. Even the Resolution Plan submitted by the group company of M/s. Jindal Power Ltd. is still under consideration by CoC. The Applicant approached the CoC and requested them to allow to submit the Resolution Plan, in view of the changed circumstances, but, CoC did not consider the prayer. It is to be noted that the Applicant has already submitted the EOI vide emails dated 28.06.2021 and 04.07.20201 along with its Net worth certificate showing its desire to submit the Resolution Plan. The RP has not controverted the eligibility of the Applicant on the basis of any criteria as laid down under RFRP. It appears that CIRP period is already over but since one plan is pending and since there is likelihood of Resolution of Insolvency of Corporate Debtor, we did not pass order of Liquidation - the RP and CoC are directed to allow the Applicant to submit the Plan on the basis of amendment of Form - G on which the Group Companies of M/s. Jindal power Ltd. were allowed to submit the plan. Application disposed off. Issues Involved:1. Acceptance of Expression of Interest (EOI) and declaration as a prospective resolution applicant.2. Issuance of a fresh Form G inviting EOI.3. Alleged discriminatory treatment in the resolution process.4. Compliance with CIRP Regulations and timelines.5. Commercial wisdom of the Committee of Creditors (CoC).Issue-wise Detailed Analysis:1. Acceptance of Expression of Interest (EOI) and Declaration as a Prospective Resolution Applicant:The Applicant, M/s. Riddhi Siddhi Gluco Biols Limited, sought relief for the Respondents to accept its EOI and declare it as a prospective resolution applicant under Regulation 36A of the CIRP Regulations. The Applicant argued that the Respondent No. 1 (Resolution Professional) and Respondent No. 2 (Committee of Creditors) should provide requisite time for submitting a Resolution Plan and consider it on its merits. The Tribunal noted that the Applicant had already submitted the EOI via emails dated 28.06.2021 and 04.07.2021, along with its Net worth certificate, showing its desire to submit the Resolution Plan.2. Issuance of a Fresh Form G Inviting EOI:As an alternative relief, the Applicant requested the Tribunal to direct the Respondents to issue a fresh Form G to invite EOI, thereby enlarging the field for multiple potential resolution applicants. The Applicant referenced the judgment in Kotak Investment Advisors Ltd. vs. Mr. Krishna Chamadia & Ors., where it was held that the Resolution Professional, with CoC approval, could invite fresh EOI after the deadline for submission of the Resolution Plan had expired. The Tribunal observed that no Resolution Plan had been submitted by any resolution applicant, implying that issuing a fresh Form G could have been a viable option.3. Alleged Discriminatory Treatment in the Resolution Process:The Applicant alleged that the Respondents unfairly facilitated the participation of a new entity from Jindal Group by allowing it to replace the earlier EOI submitted by Jindal, under the guise of being a Group company. The Tribunal found that the RP and CoC allowed other group companies of M/s. Jindal Power Ltd. to submit the Resolution Plan by changing Form-G, despite those companies not being original Resolution Applicants. The Tribunal noted that the Applicant had approached the CoC to allow it to submit the Resolution Plan under the changed circumstances, but the CoC did not consider the request.4. Compliance with CIRP Regulations and Timelines:The Respondents argued that the RP was bound by Regulation 36A(6) of the CIRP Regulations, which mandates the rejection of any EOI received after the specified time. They cited cases such as Bilagi Sugar Mill Limited vs. Mr. M.V. Sudarshan and Amit Gupta vs. Yogesh Gupta to support their stance. The Tribunal acknowledged that the CIRP is a time-bound process and emphasized the need to maintain parity in the process. It directed the RP and CoC to allow the Applicant to submit the Resolution Plan based on the amended Form-G, which had allowed the group companies of M/s. Jindal Power Ltd. to submit their plans.5. Commercial Wisdom of the Committee of Creditors (CoC):The Respondents highlighted the commercial wisdom of the CoC, referencing the Supreme Court judgment in Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta. The Tribunal recognized the CoC's commercial wisdom but stressed that it should not come at the cost of transparency and fair play. The Tribunal directed the RP and CoC to consider both the Applicant's and Jindal Group's Resolution Plans within two weeks, ensuring a fair and transparent process.Conclusion:The Tribunal directed the RP and CoC to allow the Applicant to submit its Resolution Plan within two weeks and to consider both the Applicant's and Jindal Group's plans within two weeks thereafter. The Tribunal emphasized the need to complete the CIRP process within 30 days, excluding the lockdown period and the period during which CIRP was stayed. The IA No. 325/2021 was disposed of, with any interim orders merged into this final order.