2021 (4) TMI 1183 - Tri - Insolvency and Bankruptcy

Tribunal orders Committee of Creditors to reassess Resolution Plan amid implementation delays.

The Tribunal directed the Resolution Professional to reconvene the Committee of Creditors to reassess the necessity of proceeding with the Resolution Plan ... Validity of Resolution Plan - reinstatement of Committee of Creditors of the Corporate Debtor and the Resolution Professional - invitation of fresh Resolution Plans from interested parties for being considered by the Committee of Creditors of the Corporate Debtor - direction to invoke and appropriate the Performance Bank Guarantee - HELD THAT:- We are surprised the manner in which the members of the Committee of Creditors have not taken any steps for the proper implementation of the Resolution Plan even though long time has elapsed and no stay was granted by Hon'ble NCLAT. In the meantime, some of the Financial Creditors who have approved the Resolution Plan have filed IA for revoking the approval of Resolution Plan. In view of the same, we hereby direct the RP to reconvene the meeting of Committee of Creditors for considering whether this Resolution Plan is still required to be proceeded with or not in view of the inordinate delay that has taken place in implementing the Resolution Plan and also taking into consideration the changed circumstances. Application disposed off. Issues:1. Application filed by Kotak Mahindra Bank under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.2. Approval of the Resolution Plan dated 11.12.2018 by the Tribunal.3. Non-implementation of the Resolution Plan.4. Appeal filed by IDBI Bank before NCLAT challenging the approval of the Resolution Plan.5. Allegations of lack of bona fides against the Resolution Applicant.6. Request to set aside the Resolution Plan and reinstate the Committee of Creditors.Analysis:1. The Application filed by Kotak Mahindra Bank sought to set aside the Resolution Plan dated 11.12.2018 and reinstate the Committee of Creditors. The bank alleged that the Resolution Applicant had not complied with its obligations within the specified timeline, prejudicing the interests of the Petitioner and other creditors. The Resolution Professional had admitted the Resolution Plan despite pending appeals challenging its approval.2. The Resolution Plan was approved by the Committee of Creditors on 11.12.2018, with a majority voting share. However, the Resolution Applicant failed to implement the Plan, citing pending appeals before the NCLAT. The Tribunal noted the lack of progress in implementing the Plan despite the absence of any stay order from the NCLAT. Financial Creditors had filed applications to revoke the Plan's approval, prompting the Tribunal to direct the RP to reconvene the COC for a fresh consideration of the Plan's necessity.3. The Tribunal expressed surprise at the delay in implementing the Resolution Plan and directed the COC to reassess the situation and submit a fresh resolution. The COC was instructed to incorporate the views of members seeking to revoke the Plan's approval. The entire process was to be completed within three weeks, with the RP required to submit the revised resolution for the Tribunal's consideration. The Tribunal disposed of the application, emphasizing the need for a prompt resolution by the COC.4. The allegations of lack of bona fides against the Resolution Applicant were based on its failure to implement the approved Resolution Plan despite the Tribunal's order. The Petitioner contended that the Resolution Applicant's actions were prejudicial to the interests of the creditors and the Corporate Debtor. The Tribunal highlighted the importance of adhering to approved Resolution Plans and ensuring timely implementation to protect stakeholders' interests.5. The appeal filed by IDBI Bank before the NCLAT challenged the approval of the Resolution Plan and sought a stay on its implementation. The NCLAT's order indicated that any decision regarding the Plan's implementation would be subject to the appeal's outcome. The unresolved status of the appeal was cited as the reason for the non-implementation of the Plan by the Successful Resolution Applicant.6. In conclusion, the Tribunal directed the RP to reconvene the COC to reevaluate the necessity of proceeding with the Resolution Plan due to the significant delay in implementation. The COC was instructed to submit a fresh resolution considering the changed circumstances and the concerns raised by members seeking to revoke the Plan's approval. The Tribunal emphasized the need for a prompt resolution by the COC to address the ongoing issues related to the Resolution Plan's implementation.