Tribunal overturns order, sends Resolution Plan back to COC for resubmission.

The Tribunal allowed the appeal, setting aside the Impugned Order and remitting the matter back to the Adjudicating Authority. The Adjudicating Authority was directed to send back the Resolution Plan to the COC for resubmission, considering the Tribunal's observations and ensuring compliance with the parameters laid down by the Supreme Court in the "Essar Steel" judgment and the IBC. The Adjudicating Authority was instructed to specify a time period for the RP to place the matter before the COC for resubmission of the Resolution Plan. The appeal was disposed of with no costs.

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Issues Involved:
1. Viability and feasibility of the Resolution Plan.
2. Alleged material irregularities in the Corporate Insolvency Resolution Process (CIRP).
3. Confidentiality breach of liquidation value.
4. Non-publication of Notice inviting Expression of Interest (EOI).

Detailed Analysis:

1. Viability and Feasibility of the Resolution Plan:
The Appellant contended that the Resolution Plan approved by the Committee of Creditors (COC) was not feasible and viable. The ethanol plant, crucial for the Corporate Debtor's operations, was owned by a third party (Respondent No.3) and not the Corporate Debtor. The Resolution Plan assumed the plant and machinery belonged to the Corporate Debtor, which was incorrect. The COC did not consider the impact of the plant's removal on the viability of the Resolution Plan. The Tribunal noted that the plan's feasibility was compromised as it did not account for the potential removal of the ethanol plant machinery, making the plan unworkable.

2. Alleged Material Irregularities in the CIRP:
The Appellant argued that the CIRP conducted by the Resolution Professional (RP) had several material irregularities. The RP issued a public notice for the outright sale of the Corporate Debtor as a going concern instead of inviting Resolution Plans. The Resolution Plan was hurriedly approved by the COC without proper examination. The Tribunal found that the RP did not adequately examine the Resolution Plan as required under Section 30(2) of the Insolvency and Bankruptcy Code (IBC). The COC's approval process was rushed, and the plan was not thoroughly evaluated for feasibility and viability.

3. Confidentiality Breach of Liquidation Value:
The Appellant claimed that the Respondent No.2 (Successful Resolution Applicant - SRA) knew the exact liquidation value before submitting the Resolution Plan, which indicated a breach of confidentiality. The Tribunal found it difficult to accept the RP’s argument that the exact liquidation value mentioned by the SRA was a mere coincidence. The SRA did not provide any material evidence for its independent valuation. The Tribunal concluded that there was a breach of confidentiality regarding the liquidation value.

4. Non-publication of Notice Inviting Expression of Interest (EOI):
The Appellant asserted that there was no publication inviting EOI, which was a requirement under Regulation 36A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The RP admitted that the notice published was for the outright sale of the company, not for inviting Resolution Plans. The Tribunal found that this irregularity diverted potential Resolution Applicants and disadvantaged the Corporate Debtor.

Order:
The Tribunal allowed the appeal, setting aside the Impugned Order and remitting the matter back to the Adjudicating Authority. The Adjudicating Authority was directed to send back the Resolution Plan to the COC for resubmission, considering the Tribunal's observations and ensuring compliance with the parameters laid down by the Supreme Court in the "Essar Steel" judgment and the IBC. The Adjudicating Authority was instructed to specify a time period for the RP to place the matter before the COC for resubmission of the Resolution Plan. The appeal was disposed of with no costs.

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