Tata Steel appeal dismissed, case remitted for new order under Section 31. Stakeholders treated equally.

The appeal by Tata Steel was dismissed as premature and not maintainable. The case was remitted to the Adjudicating Authority for passing an appropriate order under Section 31, ensuring that all stakeholders are treated similarly. The period of pendency of the appeal was excluded from the counting of the 270-day period for the Corporate Insolvency Resolution Process.

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Issues Involved:
1. Adjudicating Authority's directive to consider Liberty House's Resolution Plan.
2. Alleged delay and multiple opportunities given to Liberty House.
3. Submission and consideration of improved financial offers by JSW Steel.
4. Tata Steel's objection to the improved financial offers.
5. Committee of Creditors' (CoC) discretion in considering revised offers.
6. Allegations of bias and malafide conduct against CoC.
7. Prematurity and maintainability of Tata Steel's appeal.
8. Approval process and voting shares within CoC.
9. Treatment of Operational Creditors in the Resolution Plan.

Detailed Analysis:

1. Adjudicating Authority's Directive to Consider Liberty House's Resolution Plan:
The Adjudicating Authority directed the CoC to consider the Resolution Plan submitted by Liberty House, emphasizing that considering another competitor's plan would advance the objective of maximizing the assets of the Corporate Debtor. The directions included placing the unopened sealed cover containing Liberty House's plan before the CoC and ensuring that the plan is not rejected on grounds of delay.

2. Alleged Delay and Multiple Opportunities Given to Liberty House:
The appellant, Tata Steel, argued that Liberty House failed to participate and provide necessary documents within the timelines set by the Resolution Professional. Despite this, Liberty House was given multiple opportunities to submit its documents and express interest. However, during the appeal, Tata Steel did not strongly challenge the opportunities given to Liberty House.

3. Submission and Consideration of Improved Financial Offers by JSW Steel:
JSW Steel submitted an improved financial offer after the Adjudicating Authority's order, which included better offers for various creditors and substantial upfront equity for improving the Corporate Debtor's operations. The CoC allowed all three Resolution Applicants, including Tata Steel, Liberty House, and JSW Steel, to submit improved financial offers by a specified date.

4. Tata Steel's Objection to the Improved Financial Offers:
Tata Steel objected to the consideration of improved financial offers and filed an application to restrain the CoC from considering these offers. However, Tata Steel failed to implead JSW Steel as a party respondent, despite knowing that JSW Steel would be affected by the application.

5. Committee of Creditors' (CoC) Discretion in Considering Revised Offers:
The CoC has the discretion to consider improved financial offers to ensure value maximization within the timeframe prescribed by the Insolvency and Bankruptcy Code (I&B Code). The CoC can negotiate better terms with compliant Resolution Applicants and extend timelines if necessary for obtaining the best Resolution Plan.

6. Allegations of Bias and Malafide Conduct Against CoC:
Tata Steel alleged malafide conduct by the CoC, claiming that the CoC favored JSW Steel. The CoC refuted these allegations, stating that the orders of the Appellate Tribunal did not restrict the CoC from seeking clarifications from the Resolution Applicants and that the CoC acted in accordance with the law.

7. Prematurity and Maintainability of Tata Steel's Appeal:
The Appellate Tribunal held that Tata Steel's appeal was premature and uncalled for, as no final decision had been taken by the Adjudicating Authority under Section 31. The Tribunal emphasized that a Resolution Applicant has no vested or fundamental right to have its Resolution Plan considered or approved.

8. Approval Process and Voting Shares Within CoC:
The CoC is required to approve a Resolution Plan by a vote of not less than sixty-six percent of the voting share of the financial creditors. Only members of the CoC who attend the meeting directly or through video conferencing can exercise their voting powers. In this case, the Resolution Plan submitted by JSW Steel was approved with 97.12% voting shares.

9. Treatment of Operational Creditors in the Resolution Plan:
The Adjudicating Authority must ensure that all stakeholders, particularly Operational Creditors, are treated similarly and that no discrimination is made between Financial Creditors and Operational Creditors. If discrimination is found, the Adjudicating Authority may give JSW Steel an opportunity to improve its plan.

Conclusion:
The appeal by Tata Steel was dismissed as premature and not maintainable. The case was remitted to the Adjudicating Authority for passing an appropriate order under Section 31, ensuring that all stakeholders are treated similarly. The period of pendency of the appeal was excluded from the counting of the 270-day period for the Corporate Insolvency Resolution Process.

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