Appeal against Resolution Plan's Approval Dismissed

The appeal challenging the Resolution Plan's approval was dismissed by the tribunal. The plan, valued at Rs. 143 Crores for assets worth Rs. 490 Crores, was approved by the Committee of Creditors based on commercial wisdom. The CoC's decision was deemed non-justiciable, compliant with statutory requirements, and providing for all stakeholders. The tribunal found the appeal lacked merit, failed to establish irregularities, and criticized the ex-management's non-cooperation during the Corporate Insolvency Resolution Process. The tribunal upheld the plan's approval and highlighted the CoC's paramount role in such matters.

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Issues Involved:
1. Valuation of assets of the Corporate Debtor.
2. Approval of the Resolution Plan by the Committee of Creditors.
3. Compliance with statutory and regulatory requirements.
4. Maintainability of the appeal.
5. Constitution of the Bench and quorum.
6. Conduct of the ex-management during the Corporate Insolvency Resolution Process (CIRP).

Issue-wise Detailed Analysis:

1. Valuation of Assets of the Corporate Debtor:
The primary objection raised by the appellants was the undervaluation of the Corporate Debtor's assets. The appellants contended that the Resolution Plan offered Rs. 143 Crores, whereas the actual value of the properties was Rs. 490 Crores. The properties included Hotel Orient Taj in Agra and plots in Mauja Basai Mustakil and Greater Noida. The appellants argued that the fair value was Rs. 157 Crores, and the liquidation value was Rs. 125 Crores, making the Resolution Plan Rs. 50 Crores less than the fair value. However, the tribunal noted that the Committee of Creditors (CoC) approved the plan based on commercial wisdom, and there was no requirement for the bid to match the liquidation value. The tribunal referenced the case of 'Maharashtra Seamless Limited vs. Padmanabhan Venkatesh & Ors.' to support this.

2. Approval of the Resolution Plan by the Committee of Creditors:
The Resolution Plan submitted by Respondent No. 2 was approved by the CoC with 100% voting share. The tribunal emphasized that the CoC's decision, based on commercial wisdom, is paramount and non-justiciable. The CoC found the plan compliant with all statutory and regulatory parameters, providing for all stakeholders. The tribunal cited 'K. Shashidhar Vs. Indian Overseas Bank and Ors.' to highlight that the CoC's commercial wisdom is beyond judicial intervention.

3. Compliance with Statutory and Regulatory Requirements:
The tribunal found that the Resolution Plan was compliant with all statutory and regulatory requirements. The plan provided for the interests of all stakeholders, including Financial Creditors, Operational Creditors, Workmen, Employees, and even Other Creditors who had not submitted their claims. The tribunal noted that the Adjudicating Authority approved the plan after ensuring it met the requirements of Section 30(2) of the Insolvency and Bankruptcy Code (I&B Code).

4. Maintainability of the Appeal:
The tribunal held that the appeal did not raise any question for determination under Section 61(3) (i) to (v) of the I&B Code. The appellants failed to demonstrate any material irregularity or contravention of law in the Resolution Plan. The tribunal emphasized that the appeal could not disturb the commercial wisdom of the CoC or establish any lapse by the Adjudicating Authority.

5. Constitution of the Bench and Quorum:
The appellants objected to the impugned order being passed by a single member quorum. The tribunal clarified that a Special Bench was reconstituted by the Hon'ble President, NCLT, during the COVID-19 outbreak for virtual hearings. The tribunal dismissed the objection, noting that the matter was heard by a reconstituted Special Bench, ensuring justice accessibility and adherence to prescribed timelines.

6. Conduct of the Ex-management during CIRP:
The tribunal criticized the appellants, the ex-management of the Corporate Debtor, for their non-cooperation during the CIRP. The appellants were accused of obstructing the process and failing to provide necessary documents and information. The tribunal noted that the Adjudicating Authority had to issue bailable warrants against the appellants to ensure their cooperation. The tribunal concluded that the appellants' conduct portrayed a dismal picture, further justifying the dismissal of the appeal.

Conclusion:
The tribunal dismissed the appeal, finding it not maintainable and without merit. The Resolution Plan was approved based on the CoC's commercial wisdom, and all statutory and regulatory compliances were met. The appellants' objections regarding valuation and procedural issues were rejected, and their conduct during the CIRP was criticized.

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