Tribunal upholds Resolution Plan approval, emphasizes compliance with statutory provisions, and dismisses pending interim applications.

The tribunal dismissed the appeal, upholding the Adjudicating Authority's approval of the Resolution Plan. It found that the Resolution Professional had not breached duties, Carval was not ineligible due to false information, and the reduced Bank Guarantee amount was accepted within commercial wisdom. The tribunal emphasized compliance with statutory provisions, including obtaining CCI approval before final approval, and noted that pending interim applications were disposed of without costs.

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Issues Involved:
1. Non-compliance with obtaining prior approval from the Competition Commission of India (CCI).
2. Suppression of material facts and breach of duties by the Resolution Professional.
3. Ineligibility of Carval due to submission of false information.
4. Non-provision of Bank Guarantee as per the Request for Resolution Plan (RFRP).

Issue-wise Detailed Analysis:

1. Non-compliance with Obtaining Prior Approval from the CCI:
The appellants argued that the Resolution Plan was approved by the Committee of Creditors (CoC) without obtaining the mandatory prior approval from the CCI, making the approval process null and void. They cited various legal precedents to support their claim that prior approval is a statutory precondition. However, the respondents contended that the requirement for CCI approval is directory and not mandatory. They referenced the judgment in Arcelormittal India Pvt. Ltd. Vs. Abhijeet Guhathakurta, which held that CCI approval could be obtained before the Adjudicating Authority's approval of the plan. The tribunal agreed with the respondents, noting that the CCI approval was obtained on June 4, 2019, before the Adjudicating Authority's approval on April 30, 2020, thus fulfilling the requirement.

2. Suppression of Material Facts and Breach of Duties by the Resolution Professional:
The appellants claimed that the Resolution Professional (RP) acted in breach of his duties and obligations, leading to grave irregularities in the exercise of his powers. They alleged that there was suppression of material facts before the Adjudicating Authority. The tribunal examined these claims and found that the RP had acted in compliance with the provisions of the Insolvency and Bankruptcy Code (IBC) and the Corporate Insolvency Resolution Process (CIRP) regulations. The tribunal noted that the Adjudicating Authority had provided various directions to ensure the operationalization of the Resolution Plan, indicating that the RP had not suppressed any material facts.

3. Ineligibility of Carval Due to Submission of False Information:
The appellants alleged that Carval was ineligible under Regulation 39(1)(c) of the CIRP Regulations for submitting a Resolution Plan with false information. They pointed out that Carval falsely represented Dr. Johannes Sittard as a director of Nithia Capital Resources Advisors LLP, despite his resignation effective April 1, 2018. The respondents clarified that Dr. Sittard had resigned only as a partner but continued to hold the designation of Non-Executive Chairman and Director. The tribunal found the respondents' explanation satisfactory and noted that the Adjudicating Authority had already made provisions for the appointment of an observer to ensure the successful implementation of the Resolution Plan.

4. Non-provision of Bank Guarantee as per the RFRP:
The appellants argued that the Resolution Applicant did not provide a Bank Guarantee as required by the RFRP, leading to material irregularity. They claimed that the reduction of the Bank Guarantee from Rs. 250 Crores to Rs. 50 Crores was done unilaterally by certain financial creditors and was not disclosed to the Adjudicating Authority. The respondents explained that due to the financial crisis caused by the COVID-19 pandemic, the CoC accepted the reduced Bank Guarantee amount. The tribunal found that the CoC had exercised its commercial wisdom in accepting the reduced amount and that this decision was within the provisions of the RFRP.

Conclusion:
The tribunal dismissed the appeal, finding no merit in the appellants' arguments. It upheld the Adjudicating Authority's approval of the Resolution Plan, noting that the requirements of the IBC and CIRP regulations had been met. The tribunal emphasized the commercial wisdom of the CoC and the compliance with statutory provisions, including obtaining CCI approval before the Adjudicating Authority's final approval. Pending interim applications were disposed of, and there were no orders as to costs.

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