Tribunal Upholds Authority's Jurisdiction in CIRP Appeal

The Tribunal dismissed the appeals, upholding the Adjudicating Authority's order. It found that the Adjudicating Authority had jurisdiction to decide the application involving CIRP or liquidation proceedings. GIACL had the standing to challenge DSKL's inclusion as a Prospective Resolution Applicant. DSKL was deemed unnecessary as a party to the application, and allowing it to file EOI after the deadline was considered a regulatory violation. Adverse remarks against Pankaj Joshi were upheld due to biased conduct. The decision highlighted the lack of merit in DSKL and Joshi's arguments, emphasizing Joshi's lack of good faith and bias influence.

---

---

Issues Involved:
1. Jurisdiction of Adjudicating Authority under Section 31 of IBC.
2. Locus standi of GIACL to challenge the inclusion of DSKL in the CIRP.
3. Necessity of DSKL as a party to the Application I.A. No. 1029 of 2020.
4. Nature of the decision to allow DSKL to file EOI after the due date.
5. Validity of adverse remarks against Pankaj Joshi in Para 54 of the impugned order.

Issue-wise Detailed Analysis:

Issue No. (i): Jurisdiction of Adjudicating Authority under Section 31 of IBC
The contention was whether the Adjudicating Authority could interfere before a quasi-judicial determination under Section 31 of the IBC. The Supreme Court’s decision in Arecellor Mittal India Pvt. Ltd. clarified that Section 60(5) of the IBC empowers the NCLT to entertain or dispose of any application or proceeding by or against a corporate debtor. The Tribunal held that the Adjudicating Authority had jurisdiction to entertain and decide the Application I.A. No. 1029 of 2020, as it involved questions of law or facts arising out of CIRP or liquidation proceedings.

Issue No. (ii): Locus standi of GIACL to challenge the inclusion of DSKL in the CIRP
GIACL had the locus standi to challenge DSKL's inclusion as it was one of the shortlisted Prospective Resolution Applicants and had a vested right under Regulation 36-A (11) of the Regulations 2016 to object to the inclusion of any other applicant. The Tribunal distinguished this case from Arecellor Mittal India Pvt. Ltd. Vs. Abhijit Guhathakurta, where the context was different, affirming GIACL’s right to challenge.

Issue No. (iii): Necessity of DSKL as a party to the Application I.A. No. 1029 of 2020
The Tribunal agreed with the Adjudicating Authority that DSKL was not a necessary party to the application as no relief was sought against it directly. The focus was on the actions of the RP and CoC, and DSKL had no vested right after failing to submit EOI within the deadline.

Issue No. (iv): Nature of the decision to allow DSKL to file EOI after the due date
The Tribunal concluded that allowing DSKL to file EOI after the due date was not a commercial decision but a regulatory violation. Regulation 36-A (6) mandates that EOIs received after the specified time must be rejected. The Tribunal found that the CoC’s decision to revisit their earlier resolution was influenced by Pankaj Joshi and lacked transparency and fairness.

Issue No. (v): Validity of adverse remarks against Pankaj Joshi in Para 54 of the impugned order
The Tribunal examined the conduct of Pankaj Joshi and found that he acted with bias and manipulated the process to favor DSKL. Despite a factual error in Para 54 regarding the acceptance of the resolution plan, the Tribunal upheld the adverse remarks, emphasizing the necessity of such observations to appreciate the material facts and decide the matter.

Conclusion:
The appeals were dismissed, affirming the Adjudicating Authority’s order. The Tribunal found no merit in the arguments presented by DSKL and Pankaj Joshi, maintaining that the actions of Pankaj Joshi were not in good faith and were influenced by bias. The decision to allow DSKL to submit EOI after the due date was not a commercial decision but a regulatory breach.

---