2019 (5) TMI 1353 - AT - Insolvency and Bankruptcy

Appellate Tribunal Ensures Fair Distribution in Resolution Plans, Reserves Right to Modify

The Appellate Tribunal clarified that the Resolution Plan should be implemented as per the Adjudicating Authority's directions, emphasizing fair ... Recall of Interim Order - the impugned order dated 18th March, 2019 was not stayed by this Appellate Tribunal - HELD THAT:- The order dated 18th March 2019 if read with order dated 15th March, 2019 and as the impugned judgement particularly the observations as made at para 22 and para 28 having not been stayed, the ‘Resolution Plan’ is to be implemented in terms with the direction of the Adjudicating Authority which shall be subject to the decision of this Appellate Tribunal. Aforesaid order was passed to ensure that during the pendency of the appeal the ‘Successful Resolution Applicant’ do not suffer. The Resolution Professional is required to call for the meeting of the Committee of Creditors for its decision in terms of the decision of the Adjudicating Authority, which shall be subject to the decision of these appeals. Post these appeals for ‘admission’ on 27th March, 2019 at 2.00 p.m. Issues:1) Application for recall of interim order dated 18th March, 2019 or to pass an appropriate order.2) Interpretation of the Adjudicating Authority's approval of the plan as discriminatory.3) Implementation of the Resolution Plan by Arcelor Mittal India Pvt. Ltd.4) Concerns raised by Financial Creditors regarding the impact of non-implementation.5) Clarification of orders by the Appellate Tribunal regarding the Resolution Plan.Analysis:1) The Appellant, Standard Chartered Bank, filed an application seeking the recall of the interim order dated 18th March, 2019, or an appropriate order. The order was related to the approval of the Resolution Plan submitted by Arcelor Mittal India Pvt. Ltd. The Appellant argued that the plan's distribution of amount among Financial Creditors and Operational Creditors was discriminatory.2) The Adjudicating Authority conditionally approved the Resolution Plan, which was challenged for discriminatory distribution. The Appellate Tribunal clarified that it did not stay the implementation of the plan but reserved the right to modify it if found discriminatory without affecting its viability. The Tribunal emphasized the need for proper distribution between Financial Creditors and Operational Creditors.3) The Respondents, representing some Financial Creditors, opposed the Appellant's prayer for non-implementation of the Resolution Plan. They argued that failure to implement the plan as ordered would adversely affect Financial Creditors. The Appellate Tribunal observed that the Resolution Plan should be implemented as per the Adjudicating Authority's directions, subject to the Tribunal's decision.4) The Appellate Tribunal directed the Resolution Professional to convene a meeting of the Committee of Creditors to decide in line with the Adjudicating Authority's directions. The Tribunal also noted a typographical error in the previous order and instructed the necessary correction. The order dated 18th March, 2019 was clarified to ensure the Resolution Plan's proper implementation.5) The Appellate Tribunal disposed of the application, clarifying the order and scheduling the appeals for admission on a later date. The Tribunal aimed to safeguard the interests of the Successful Resolution Applicant during the appeal process and maintain the integrity of the Resolution Plan's implementation.