2020 (5) TMI 66 - AT - Insolvency and Bankruptcy

Tribunal Upholds Decision on Resolution Plans, Emphasizes Asset Maximization for Stakeholders

The Adjudicating Authority directed the Committee of Creditors to consider the Resolution Plan submitted by Sify Technologies Limited along with ... Corporate Insolvency Resolution Process - Resolution Plan - Committee of Creditors - Section 12 of the I&B Code - time limit for completion of insolvency resolution process - Extension of CIRP by amendment - effect of amendment - Viability and feasibility of resolution plan - maximisation of assetsResolution Plan - Committee of Creditors - Viability and feasibility of resolution plan - maximisation of assets - Validity of the Adjudicating Authority's direction to place the competing resolution plans, including the plan of Sify Technologies Limited, before the Committee of Creditors and whether the appellate court should interfere with that direction. - HELD THAT: - The Adjudicating Authority heard the applications and directed the Resolution Professional to place the plans, including the plan of Sify Technologies Limited, before the Committee of Creditors for consideration. The Tribunal declined to interfere with that direction. The court emphasised that where one or another resolution plan is found to be more viable and feasible and will maximise the assets of the corporate debtor while balancing the interests of stakeholders, no individual resolution applicant acquires a right to stall the process. The appellant's objection that a particular plan is unrealistic for want of information did not warrant appellate intervention to prevent the Committee of Creditors from considering that plan; the determination of viability and feasibility is for the Committee of Creditors in the commercial judgement exercise intrinsic to the CIRP.The direction to place the competing resolution plans before the Committee of Creditors is valid and there is no ground for interference by this Court with that direction.Section 12 of the I&B Code - time limit for completion of insolvency resolution process - Extension of CIRP by amendment - effect of amendment - Effect of the amendment to Section 12 of the I&B Code (providing extended timelines) on the challenge to the impugned order and whether the extended timeline necessitates interference. - HELD THAT: - The amendment to Section 12 came into force w.e.f. 16th August, 2019 and provides for extension of the CIRP period (including the proviso granting additional time and mandating completion within a specified overall period). In light of the additional time afforded by the statutory amendment, the court was not inclined to set aside the impugned order dated 7th August, 2019 merely because the appellant might face consequences. The extension reduced any urgency or prejudice relied upon by the appellant and weighed against interfering with the Adjudicating Authority's direction to have the Committee of Creditors consider the plans.The statutory extension of the CIRP timeline under the amended Section 12 negates the appellant's contention of prejudice and provides no basis for disturbing the impugned order.Final Conclusion: Appeal dismissed for lack of merit; impugned order directing the Resolution Professional to place competing resolution plans before the Committee of Creditors is upheld, and no interference is warranted in view of the statutory extension of time under the amended Section 12 of the I&B Code; no costs. Issues:1. Consideration of additional information for submission of Resolution Plan by Sify Technologies Limited.2. Direction to Committee of Creditors to consider Resolution Plan by Honest Orbit Ventures.3. Admission of claim by Government Employee Provident Fund Employees Organisation.4. Challenge to impugned order dated 7th August, 2019.5. Objections to Resolution Plan submitted by Sify Technologies Limited.6. Interpretation of Section 12 of the Insolvency and Bankruptcy Code.Analysis:1. The judgment pertains to a Corporate Insolvency Resolution Process involving Print House (India) Private Limited. An application was filed by Sify Technologies Limited seeking additional information from the Resolution Professional to submit a Resolution Plan. The delay in submission was requested to be condoned due to difficulties in evaluating liabilities. The Adjudicating Authority directed the Committee of Creditors to consider the Resolution Plan submitted by Sify Technologies Limited along with objections.2. Another Resolution Applicant, Honest Orbit Ventures, filed a Miscellaneous Application to direct the Committee of Creditors to consider their Resolution Plan submitted within the prescribed time. The Adjudicating Authority allowed this application, leading to a meeting being convened for the consideration of the Resolution Plan.3. A third Miscellaneous Application filed by the Government Employee Provident Fund Employees Organisation was entertained and allowed, admitting the claim of the Government Department. The impugned order dated 7th August, 2019, which included these decisions, was challenged in the appeal.4. The Appellant, a Resolution Applicant, raised objections to the Resolution Plan submitted by Sify Technologies Limited, citing unrealistic aspects due to lack of information. The counsel for the Appellant argued that the Resolution Plan submission deadline was met, and the plan by Sify Technologies Limited should not be considered.5. The judgment delves into the recent amendment of Section 12 of the Insolvency and Bankruptcy Code, extending the time for completing the Resolution Process. The Tribunal declined to interfere with the impugned order based on this development, emphasizing the importance of maximizing assets for all stakeholders involved. The appeal was dismissed without costs, as no merit was found.This detailed analysis covers the various issues addressed in the judgment, including the consideration of Resolution Plans, admission of claims, challenges to orders, objections to plans, and the interpretation of relevant legal provisions.