2021 (7) TMI 496 - Tri - Insolvency and Bankruptcy

Tribunal rejects modifications to Resolution Plan, stresses commitment adherence post-approval

The Tribunal dismissed the Resolution Applicant's application seeking modifications and extensions to the Resolution Plan. Emphasizing the importance of ... Seeking modification in Resolution Plan - incorporation of mutually agreed position regarding the grace period - permission to follow the revised timeline based on mutual agreement between the parties during the 9th CoC meeting - seeking grant of extension of two months to the timelines proposed under the Resolution Plan - HELD THAT:- The prayer to modify the Resolution Plan incorporating mutually agreed position regarding the grace period and to follow the revised timeline based on that cannot be accepted by this Adjudicating Authority, because once a Resolution Plan is approved by the Adjudicating Authority, it cannot be reopened and add another condition in the Plan. In this connection, the decision of Hon'ble the Supreme Court in Rahul Jain v. Rave Scans Pvt. Ltd [2019 (11) TMI 449 - SUPREME COURT] may be referred to, in which it was held that once a Resolution Plan is approved by the NCLT, it attains finality and cannot be disturbed. Since, it is clear that the Applicant failed to honour his commitments in complying with the conditions in the approved Resolution Plan, grant of any further time is not called for in this matter - application dismissed. Issues:Resolution Plan modification regarding grace period, Extension of timelines due to medical condition of the Applicant, Compliance with Resolution Plan commitments.Analysis:1. The Successful Resolution Applicant filed an application seeking modifications to the Resolution Plan regarding the grace period, extension of timelines, and consideration of medical conditions under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The Applicant faced challenges in meeting the deadlines due to Covid-19 illness, seeking extensions supported by CoC resolutions and mutual agreements.2. The Resolution Applicant's contentions revolved around the agreed grace period for payments and compliance with the Resolution Plan. The Applicant highlighted the medical condition's impact on meeting timelines and emphasized the commitment by already paying a performance guarantee. However, the Respondent Bank contended that the Applicant failed to adhere to the agreed payment schedule, leading to the invocation of the performance guarantee.3. The Respondent Bank disputed the Applicant's interpretation of the CoC meeting minutes, emphasizing the absence of a mutually agreed cure period and the Applicant's failure to fulfill financial obligations under the Resolution Plan. The Respondent sought to rely on meeting records to refute the Applicant's claims of agreed grace periods.4. The Tribunal deliberated on the submissions, noting the Resolution Applicant's failure to meet commitments under the approved Resolution Plan. Citing legal precedents, the Tribunal emphasized the finality of approved plans and the inability to modify them post-approval. The Tribunal highlighted the importance of honoring commitments and dismissed the Applicant's request for further extensions.5. The Tribunal concluded that the Applicant's failure to comply with the Resolution Plan's commitments warranted dismissal of the application seeking modifications and extensions. Emphasizing the need for adherence to approved plans and timelines, the Tribunal declined the Applicant's plea for additional time, ultimately dismissing the application.This detailed analysis covers the issues raised in the legal judgment, providing a comprehensive overview of the arguments presented by the parties and the Tribunal's decision based on legal principles and factual circumstances.