2019 (1) TMI 2044 - AT - Companies Law

Tribunal Confirms Separate CIRP for Subsidiary, Urges Quick Resolution for Holding Company's Plan Within 3 Weeks.

The Tribunal dismissed the appeal for a stay on the Corporate Insolvency Resolution Process (CIRP) of the subsidiary company, affirming that the processes ... Initiation of separate Corporate Insolvency Resolution Process against subsidiary company - Appellant submits that a resolution plan has already been approved in the case of ‘Alok Industries Ltd.’ and the matter was placed before the Adjudicating Authority in July, 2018 for its approval under Section 31 of Insolvency and Bankruptcy Code, 2016, however, no decision has been taken by the Adjudicating Authority - HELD THAT:- The concerned Adjudicating Authority should decide the same immediately. If resolution plan has been filed in the case of ‘Alok Industries Ltd.’ and Resolution Professional of the said case has placed the approved resolution plan in respect of ‘Alok Industries Ltd.’ before the Adjudicating Authority, the concerned Adjudicating Authority is required to decide it preferably within three weeks. The Corporate Insolvency Resolution Process initiated against ‘Alok Infrastructure Ltd.’ is stayed and the Resolution Professional, the Committee of Creditors and the Adjudicating Authority will continue with the same in accordance with law within the time specified in the law. Appeal disposed off. Issues:1. Initiation of separate Corporate Insolvency Resolution Processes against two related companies.2. Request for stay on insolvency resolution process until decision on holding company's resolution plan.3. Approval of resolution plan for holding company and delay in decision by Adjudicating Authority.4. Direction for Adjudicating Authority to decide on holding company's resolution plan promptly.5. Clarification on the status of the insolvency resolution process for the subsidiary company.Analysis:1. The judgment deals with the initiation of separate Corporate Insolvency Resolution Processes against two related companies, 'Alok Industries Ltd.' and 'Alok Infrastructure Ltd.' The appeal was filed by a director of 'Alok Infrastructure Ltd.' against the initiation of the insolvency resolution process for the subsidiary company.2. The appellant requested a stay on the insolvency resolution process for 'Alok Infrastructure Ltd.' until a decision was made on the resolution plan of 'Alok Industries Ltd.' However, the Tribunal rejected this request, highlighting that the two processes were distinct and separate.3. It was noted that a resolution plan had already been approved for 'Alok Industries Ltd.' but the Adjudicating Authority had not made a decision on it. The Tribunal emphasized the need for the Adjudicating Authority to promptly decide on the approved resolution plan within three weeks.4. The Tribunal clarified that it had not stayed the insolvency resolution process for 'Alok Infrastructure Ltd.' and directed the Resolution Professional, Committee of Creditors, and Adjudicating Authority to proceed with the process in accordance with the law and within the specified time frame.5. The judgment concluded by disposing of the appeal with the aforementioned observations and no costs awarded, providing clarity on the status of the insolvency resolution process for the subsidiary company and emphasizing the need for timely decisions by the Adjudicating Authority.