Tribunal orders CoC to review resolution plan, stresses transparency & applicant's rights.

The tribunal allowed the applicant's request and directed the Committee of Creditors (CoC) to reconsider the resolution plan within two weeks, emphasizing the importance of transparency and the right of the resolution applicant to be heard. The Resolution Professional (RP) was instructed to submit a status report promptly. The tribunal found that the applicant was not afforded a fair opportunity, violating the principle of natural justice, and mandated compliance with statutory provisions and regulations in the resolution process.

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Issues Involved:
1. Rejection of the resolution plan of Acme Chem Ltd.
2. Revision of the Resolution Professional's report.
3. Conducting open competitive bidding.
4. Violation of the principle of natural justice.
5. Allegations of favoritism and non-transparency.
6. Consideration of the viability and feasibility of the resolution plan.
7. Compliance with statutory provisions and regulations.

Issue-wise Detailed Analysis:

1. Rejection of the resolution plan of Acme Chem Ltd.:
The applicant requested the tribunal to reject the resolution plan of Acme Chem Ltd., which was approved by the Committee of Creditors (CoC) on 12.09.2018. The applicant argued that the plan was approved without considering the full and true facts and figures, and alleged that the process was not transparent.

2. Revision of the Resolution Professional's report:
The applicant sought a directive for the Resolution Professional (RP) to revise his report, taking into account the applicant's resolution plan and resubmitting it to the CoC for further consideration. The applicant contended that the RP did not fully disclose the applicant's offer, including additional financial benefits to creditors.

3. Conducting open competitive bidding:
The applicant requested the tribunal to direct the RP to conduct open competitive bidding to ensure transparency and maximization of the value of assets for the benefit of all creditors.

4. Violation of the principle of natural justice:
The applicant argued that the RP and CoC violated the principle of natural justice by not granting the applicant an opportunity to be heard. The applicant cited the NCLT Kolkata's order in Binani Cement Ltd. v. Mr. Vijaykumar V Iyer and the NCLAT's decision in Rajputana Properties (P.) Ltd. v. Ultratech Cement Ltd., emphasizing that the resolution applicant should be allowed to participate in the CoC meeting where their resolution plan is considered.

5. Allegations of favoritism and non-transparency:
The applicant alleged that the RP favored Acme Chem Ltd. by reducing the eligibility threshold for resolution applicants and not disclosing the applicant's additional financial offers to the CoC. The applicant contended that Acme Chem Ltd. did not meet the revised eligibility criteria and that the RP's actions were biased.

6. Consideration of the viability and feasibility of the resolution plan:
The applicant argued that the CoC did not record its satisfaction with the viability and feasibility of Acme Chem Ltd.'s resolution plan, as required under Section 30(4) of the Insolvency and Bankruptcy Code (IBC), 2016. The applicant contended that the CoC's decision lacked reasoning and was liable to be declared null and void.

7. Compliance with statutory provisions and regulations:
The applicant contended that the RP did not comply with Regulation 39(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which requires the RP to submit all resolution plans that meet the requirements of the Code and regulations. The applicant argued that the entire procedure adopted in ranking the resolution applicants was vitiated and discriminatory.

Tribunal's Decision:
The tribunal noted that the applicant was not given a reasonable opportunity to attend the CoC meeting on 12.09.2018 due to religious constraints, which violated the principle of natural justice. The tribunal emphasized that under Section 30(5) of the IBC, 2016, the resolution applicant is entitled to attend the CoC meeting where their resolution plan is considered. The tribunal relied on the NCLAT's judgment in ANG Industries Ltd. v. Shah Brothers Ispat Pvt. Ltd. and observed that the CoC should follow a transparent procedure and allow resolution applicants to express their views.

The tribunal allowed the applicant's request and directed the CoC to reconsider the applicant's resolution plan by providing a reasonable opportunity of being heard within two weeks. The RP was instructed to file a status report within two working days thereafter. The application was disposed of accordingly.

Conclusion:
The tribunal found that the applicant was not given a fair opportunity to present their case, which violated the principle of natural justice. The CoC was directed to reconsider the applicant's resolution plan with due consideration and transparency, ensuring compliance with statutory provisions and regulations.

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