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Issues: (i) Whether a Resolution Applicant (SRA) whose name was not included in the final list of Prospective Resolution Applicants (PRAs) could be permitted to submit and have its Resolution Plan considered by the CoC in contravention of Regulation 36A and Regulation 39 of the CIRP Regulations; (ii) Whether the Consortium of Dharmesh Jain (SRA) fulfilled the net-worth eligibility criteria required for submission of EoI; (iii) Whether the CIRP had expired when the Resolution Plan was approved by the CoC; (iv) Reliefs available to the Appellants in view of the findings on the process.
Issue (i): Whether the SRA whose name was not in the final list of PRAs could be permitted to submit and have its Resolution Plan considered by the CoC in contravention of Regulation 36A and Regulation 39 of the CIRP Regulations.
Analysis: Regulation 36A requires issuance of a provisional list within ten days of the last date for submission of EoI, an opportunity to object within five days, and issuance of a final list after considering objections. Regulation 36A(6) rejects EoIs received after the time specified; Regulation 39(1B) bars consideration of plans from persons not appearing in the final list. While Form-G may permit the CoC to extend timelines, statutory steps for issuing provisional/final lists and inviting objections (sub-regs 1012) must be complied with when late EoIs are accepted after extension. The record showed no publication of an amended provisional list and no opportunity for objections after the Consortiums late EoI, hence non-compliance with Regulation 36A sub-regs 1012.
Conclusion: In favour of Respondent. The Tribunal upholds the Adjudicating Authoritys conclusion that the SRAs Plan could not lawfully be considered because the statutory requirements of Regulation 36A were not complied with.
Issue (ii): Whether the Resolution Applicant fulfilled the net-worth eligibility criteria.
Analysis: The Adjudicating Authority noted absence of audited financial statements for the immediate preceding year but did not finally hold the Consortium ineligible; records included net-worth certificates and subsequent affidavits. The Authoritys observations recorded that adequate documentary proof at the EoI stage was lacking, but no conclusive finding of ineligibility under Section 29A or the invitation criteria was recorded.
Conclusion: In favour of Appellant. The Tribunal held that the Adjudicating Authority did not record a finding that the Consortium was ineligible to submit the Resolution Plan.
Issue (iii): Whether the CIRP period had expired when the Resolution Plan was approved by the CoC.
Analysis: The CIRP period had been extended by the Adjudicating Authority until 30.09.2024. The Plan approval and related approvals fell within the extended CIRP timeline; any discrepancy in filing dates did not demonstrate breach of the CIRP period on the material before the Tribunal.
Conclusion: In favour of Appellant. The Tribunal held there was no breach of the CIRP period in the resolution process.
Issue (iv): Reliefs whether and what reliefs the Appellants are entitled to given the procedural infirmities identified.
Analysis: Although the Tribunal upheld the Adjudicating Authoritys rejection of the specific Resolution Plan on the ground of non-compliance with Regulation 36A, the projects nature (large real-estate project with numerous homebuyers) and the interest of stakeholders justified relief short of directing liquidation. The Tribunal examined powers to re-commence CIRP and to exclude pendency periods for a fresh timeline.
Conclusion: In favour of Appellant. The Tribunal modified the impugned order by setting aside the direction to initiate liquidation and directed the RP/CoC to issue a fresh Form-G, recommence the CIRP from issuance of Form-G, complete the process within 90 days (extended by exclusion of pendency periods), and, if not completed, permit the RP to file for liquidation.
Final Conclusion: The Tribunal affirmed the Adjudicating Authoritys refusal to approve the impugned Resolution Plan for failure to comply with Regulation 36A, but it set aside the direction to commence liquidation and directed recommencement of the CIRP by issuance of a fresh Form-G with a 90-day timeline to conclude the process; the Resolution Plan approval, if any, is to be filed afresh for adjudication.
Ratio Decidendi: Inclusion of a late Expression of Interest after extension of timelines is permissible only where the Resolution Professional and Committee of Creditors comply with Regulation 36A sub-regulations 1012 by issuing an amended provisional list, inviting and considering objections, and then publishing a final list; failure to follow these statutory steps invalidates consideration of the late applicants Resolution Plan.
Invitation for Expression of Interest and Regulation 36A compliance led to plan rejection; process ordered restarted with fresh Form-G and 90-day timeline.
Failure to publish an amended provisional list and invite objections after extending the EoI timeline breached the mandatory provisional-list/objection mechanism, so a belated EoI and its resolution plan could not be validly considered; consequence: the plan was rightly not approved. The adjudicating authority did not find the late applicant ineligible to submit an EoI. No substantive breach of the CIRP period was found. In the interest of stakeholders, the liquidation direction was set aside and the RP and CoC were directed to restart the resolution process by issuing a fresh Form-G, publish provisional and final lists, and conclude solicitation of plans within 90 days, failing which liquidation may follow.
Invitation for Expression of Interest - Final list of Prospective Resolution Applicants - Extension of timelines by the Committee of Creditors - Compliance with provisional list and objection mechanism under Regulation 36A(10)-(12) - Committee of Creditors' commercial wisdom - Adjudicating Authority's power to approve a resolution plan - Section 30(2) of the Insolvency and Bankruptcy Code, 2016 - Whether the process adopted by the CoC and the RP to include Consortium of Dharmesh Jain as one of the Resolution Applicant, after approval of the CoC, is in accordance with Regulation 36A and Regulation 39 of the CIRP Regulations. - HELD THAT:- Regulation 36A sub-regulation 10 provides for issuance of provisional list of eligible PRAs within 10 days from the last date for submission of EoI to the Committee and to all prospective Resolution Applicants, who submitted the EoI. Sub-regulation 11 of Regulation 36A provides for objections for inclusion or exclusion of a PRA within five days and under sub-regulation 12, the RP is to issue final list of PRAs. Coming to the facts of the present case, as noted, as per Form-G published on 05.04.2023, the 26.04.2023 was the last date for receiving of EoI, 28.04.2023 was the date for issuance of provisional list of eligible PRAs and 03.05.2023 was last date for receiving the objections to provisional list. Provisional list was issued on 28.04.2023, in which name of Consortium of Dharmesh Jain obviously was not there. When Form-G, Note-2 contemplate extension of timelines, extension of timeline has to be considered to be extension of all timelines as mentioned in Form-G, including last date of receipt of EoI, issue of provisional list of PRAs and submission of objections to provisional list of PRAs and issuance of final list of PRAs. The requirement of issue of provisional list of all PRAs and inviting objection, is a statutory requirement as per Regulation 36A, sub-regulations 10 and 11. Even if the submission of Shri Datta is accepted that CoC could have extended the timelines for receipt of the EoIs and Resolution Plans, any EoI could have been accepted and included in the final list of PRAs only after due compliance of requirement under sub-regulations 10 and 11. We, thus, are of the view that after extension of timeline for receiving EoIs, as per Form-G, even though it was not necessary to issue a fresh Form- G and CoC was competent to extend the timeline for receipt of EoIs and Resolution Plans, the statutory requirement in sub-regulations 10, 11 and 12 of Regulation 36A of CIRP Regulations has to be complied with. In the present case, we have looked into all relevant Minutes of the CoC and letters and other correspondence and it is clear that after a request was made to the RP by Consortium of Dharmesh Jain on 30.01.2024, in the Minutes of the Meeting of the CoC held on 02.02.2024, it was decided by the CoC to accept the EoI and to extend the last date for submission of Resolution Plan for the CD. The Resolution Plan given by Consortium of Dharmesh Jain was considered and voted, but it is not shown that after receipt of the EoI from Consortium of Dharmesh Jain on 30.01.2024, any amended list of PRAs for the purpose of inviting objections was published and the compliance was made of sub- regulations 10, 11 and 12 of Regulation 36A. When no provisional list of eligible PRAs, including the name of Consortium of Dharmesh Jain inviting any objections was published, inclusion the name of Consortium of Dharmesh Jain, cannot be said to be in accordance with the statutory requirements. Hence, we are of the view that Resolution Plan of Consortium of Dharmesh Jain could not have been considered by the CoC. We are in full agreement with the reasons given by Adjudicating Authority in Paragraph 9.2 (ii), (iii) and (iv). When the Resolution Plan submitted by Consortium of Dharmesh Jain could not have been considered without complying the statutory requirements of Regulation 36A as noted above, the Adjudicating Authority did not commit any error in not approving the Resolution Plan of Consortium of Dharmesh Jain. We, thus, upheld the decision of Adjudicating Authority in not approving the Resolution Plan of Consortium of Dharmesh Jain for the reasons indicated above. Eligibility of Consortium of Dharmesh Jain to submit EoI - HELD THAT:- In the findings although the Adjudicating Authority has noticed the breach of Regulation 36A and other observations, but there is no finding or conclusion recorded that Consortium of Dharmesh Jain is not eligible to submit the Resolution Plan. Rather, the observation is that Nirmal Consortium has not offered any performance security, which can be forfeited in the event of non-implementation of the Resolution Plan. We, thus, are of the view that Adjudicating Authority has not held the Consortium of Dharmesh Jain as ineligible to submit the Resolution Plan. Question is decided accordingly. Expiry of CIRP - extension of CIRP period - HELD THAT:- The CoC has submitted that the plan approval application was filed on 30.09.2024, whereas the Adjudicating Authority in the above paragraph has observed that the Plan approval application was filed only on 24.10.2024. Be that as it may, when the Resolution Plan was approved within the CIRP period, no fault can be found with the process on the ground that application for approval of Resolution Plan was filed on 24.10.2024, whereas as noted above, the case of the CoC is that the application was filed on 30.09.2024. We, thus, do not find any breach of CIRP period in the resolution process. Question is decided accordingly. We have noted that CIRP period was extended by the Adjudicating Authority till 30.09.2024 and thereafter, Plan approval application was pending before the Adjudicating Authority, giving rise to these Appeal(s). In the facts of the present case, we are of the view that ends of justice will be served in modifying the judgment of the Adjudicating Authority by deleting the direction issued by Adjudicating Authority for filing of liquidation application. We are conscious that CIRP period is over long ago, but in view of interest of 2200 homebuyers, who are homebuyers in different projects of the CD, one last effort needs to be made for resolution of the CD by a Resolution Applicant. The Tribunal upheld the Adjudicating Authoritys refusal to approve the resolution plan because the belated EOI and ensuing plan were considered without complying with the provisional-list/objection requirements of Regulation 36A. The Tribunal declined to decide the plan-specific compliance questions as unnecessary on that finding, but in the interest of stakeholdersparticularly homebuyersset aside the liquidation direction and directed the RP and CoC to re-commence the CIRP by issuing a fresh Form-G, publish provisional and final lists and invite resolution plans, to be concluded within 90 days, failing which the RP may apply for liquidation.