Tribunal Upholds CoC's Decision on Resolution Plans, Orders Liquidation

The Tribunal dismissed the Applicant's requests to reconsider the Resolution Plan and extend the CIRP period. It upheld the CoC's decision to reject Resolution Plans, ordered liquidation of the Corporate Debtor, and appointed the Resolution Professional as Liquidator. The Tribunal emphasized that CoC's commercial wisdom in evaluating Resolution Plans cannot be challenged.

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Issues Involved:
1. Reconsideration of the Resolution Plan by CoC.
2. Extension of CIRP period.
3. Request for liquidation by the Resolution Professional.
4. Locus standi of the Applicant (Director of Suspended Board).

Detailed Analysis:

1. Reconsideration of the Resolution Plan by CoC:
The Applicant, a Director of the Suspended Board of Corporate Debtor, requested the Tribunal to direct the CoC members to reconsider his Resolution Plan. The Applicant argued that his plan was rejected without due justification and that his plan offered a total payment of Rs. 16,405.91 Lacs against the liquidation value of Rs. 5000 Lacs. However, the CoC, exercising its commercial wisdom, did not approve any Resolution Plan, including the Applicant's. The Tribunal held that it cannot sit in appeal over the decision of the CoC, which is the competent body to decide the feasibility and viability of any Resolution Plan.

2. Extension of CIRP period:
The Applicant sought an extension of the CIRP period by 122 days, arguing that this period was not utilized due to the replacement of Resolution Professionals. The Tribunal noted that the CIRP period had already been extended by 90 days beyond the initial 180 days and that the maximum period allowed (270 days) had elapsed. The Tribunal found that the IRP and subsequent Resolution Professionals had performed their duties as per the IBC, 2016, and that the Applicant had no locus standi to seek such an extension being a member of the suspended Board of Directors. The Tribunal dismissed the Applicant's request for an extension.

3. Request for liquidation by the Resolution Professional:
The Resolution Professional filed an application under Section 33(1)(a) and 34(1) of the IBC, 2016, seeking directions to pass a liquidation order against the Corporate Debtor and to appoint the Resolution Professional as the Liquidator. The CoC had not approved any Resolution Plan, and the CIRP period had ended. The Tribunal, therefore, passed an order of liquidation against the Corporate Debtor, appointing the Resolution Professional as the Liquidator and directing the initiation of the liquidation process as per the IBC regulations.

4. Locus standi of the Applicant:
The Tribunal questioned the locus standi of the Applicant, who is a Director of the Suspended Board of the Corporate Debtor, to file an application for the exclusion of time from the CIRP period. The Tribunal found that the Applicant did not have the standing to seek such relief, as the decision to exclude time or extend the CIRP period must be taken by the CoC with a majority. The Tribunal dismissed the Applicant's application on these grounds.

Conclusion:
The Tribunal dismissed the Applicant's requests to reconsider the Resolution Plan, extend the CIRP period, and prevent the liquidation of the Corporate Debtor. The Tribunal upheld the CoC's decision to reject the Resolution Plans and ordered the liquidation of the Corporate Debtor, appointing the Resolution Professional as the Liquidator. The Tribunal emphasized that the CoC's commercial wisdom in evaluating the feasibility and viability of Resolution Plans cannot be challenged by the Adjudicating Authority.

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