Tribunal upholds CoC's commercial wisdom, dismisses Resolution Applicant's application. No vested rights for plan approval.

The tribunal dismissed the application IA No. 166/2019 filed by the unsuccessful Resolution Applicant as not maintainable, emphasizing the paramount status of the commercial wisdom of the CoC. The tribunal highlighted that there is no vested right for a resolution applicant to have its plan considered or approved, citing relevant case law. The related application IA No. 759/2019 was closed as a result of this decision.

---

---

Issues Involved:

1. Validity of the CoC's decision to approve the resolution plan of the successful Resolution Applicant.
2. Allegations of bias and lack of transparency in the CIRP process.
3. Right of the unsuccessful Resolution Applicant to have its revised resolution plan considered.

Detailed Analysis:

1. Validity of the CoC's decision to approve the resolution plan of the successful Resolution Applicant:

The CoC in its meeting dated 21.02.2019 approved the resolution plan of M/s. Kamini Metalliks Private Limited (KMPL) and the resolution plan was placed before the Adjudicating Authority by way of IA No. 173/2019 on 22.02.2019. The application IA No. 166/2019 was filed by the unsuccessful Resolution Applicant on 26.02.2019. The main prayer of the applicant was to direct the RP to conduct another CoC meeting to consider its revised resolution plan. However, the tribunal noted that no concrete evidence was provided to prove the allegations of bias and that the revised resolution plan was submitted suo motu by the applicant after the RP had already submitted IA No. 173/2019 seeking approval of the resolution plan approved by the CoC.

2. Allegations of bias and lack of transparency in the CIRP process:

The applicant alleged bias in favor of the successful Resolution Applicant and claimed that the CoC accepted the bid of the successful RA by ignoring the higher bid submitted by the applicant. However, the tribunal found no concrete evidence to support these allegations. The tribunal emphasized that under the provisions of IBC, the commercial wisdom of the CoC has been given paramount status without any judicial intervention. The tribunal referred to the Hon'ble Supreme Court's judgment in K. Sashidhar vs. Indian Overseas Bank & Ors., which stated that the financial creditors act on the basis of thorough examination of the proposed resolution plan and their collective business decision is non-justiciable.

3. Right of the unsuccessful Resolution Applicant to have its revised resolution plan considered:

The tribunal referred to the Hon'ble Supreme Court's judgment in Arcelor Mittal India Pvt. Ltd. vs. Satish Kumar Gupta, which held that a resolution applicant cannot claim a vested right that his resolution plan be considered. The tribunal also referred to the Hon'ble NCLAT's judgment in JMF ARC vs. Welldo Holdings and Export Pvt Ltd, which stated that no interlocutory applications would be maintainable during the period of submission of a CoC-approved resolution plan by the RP before the Adjudicating Authority for final determination. Consequently, the tribunal dismissed the application IA No. 166/2019 as not maintainable, as there is no vested right or fundamental right with any resolution applicant to have its resolution plan considered or approved.

Conclusion:

The tribunal dismissed the application IA No. 166/2019 filed by the unsuccessful Resolution Applicant as not maintainable and closed the related application IA No. 759/2019. The tribunal emphasized the paramount status of the commercial wisdom of the CoC and the lack of any vested right for a resolution applicant to have its plan considered or approved.

---