Appellate Tribunal Upholds CoC Decision on Resolution Plan Rejection

The Appellate Tribunal upheld the rejection of the Resolution Plan by the Committee of Creditors (CoC) for the Corporate Debtor, citing reasons such as conditional terms, lack of financial capability, and failure to meet format requirements. Despite offering a higher amount, the Tribunal found no grounds to interfere with the CoC's decision based on commercial considerations. The Appellant's application seeking to present the Resolution Plan before the CoC was rendered infructuous due to the liquidation order being passed before a decision could be made. The Appeal was dismissed in line with the principles outlined in a Supreme Court judgment, emphasizing that Resolution Applicants do not have an inherent right to plan approval.

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Issues:
Appeal against liquidation order passed by Adjudicating Authority - rejection of Resolution Plan by CoC - Appellant's claim of arbitrary rejection - consideration of pending I.A 1625/2021 - interference in liquidation order - time frame for CIRP completion.

Analysis:
1. The Appellant, a prospective Resolution Applicant, filed an Appeal against the order passed by the Adjudicating Authority approving the liquidation of the Corporate Debtor. The Appellant participated in the Corporate Insolvency Resolution Process (CIRP) and submitted a Resolution Plan, which was revised based on discussions with the Committee of Creditors (CoC). The Appellant claimed that the CoC and Resolution Professional acted arbitrarily in rejecting the Resolution Plan, despite the Appellant offering to pay &8377; 77 Crores against a total debt of &8377; 52 Crores of the Corporate Debtor.

2. The CoC meeting minutes revealed that the Resolution Plan submitted by the Appellant was rejected due to various reasons, including being conditional, lack of financial capability, absence of necessary documentation, and failure to meet prescribed format requirements. The CoC decided not to grant additional time to the Appellant and proceeded to discuss and reject the Resolution Plan based on commercial considerations. The Appellant's argument of offering a higher amount did not warrant interference as observed in a previous Supreme Court judgment.

3. The Appellant filed an application (I.A 1625/2021) seeking an opportunity to present the Resolution Plan before the CoC, which was pending before the Adjudicating Authority. However, the liquidation order was passed before the I.A could be decided, rendering it infructuous. The Appellate Tribunal noted the timeline from the admission of the Section 7 Application to the liquidation order and found no grounds to entertain the Appeal post-liquidation order under Section 12 of the IBC.

4. Citing the judgment in "Arcelormittal India Pvt. Ltd. vs. Satish Kumar Gupta & Ors." by the Supreme Court, the Appellate Tribunal emphasized that Resolution Applicants do not possess a vested or fundamental right to have their Resolution Plans approved. Commercial decisions made by the CoC were upheld, and the Appellant's claim of a larger offer did not justify interference in the impugned order. The Appeal was declined, and the matter was disposed of accordingly.

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