Tribunal upholds rejection of EOI, approves liquidation. CoC's decision confirmed.

The Tribunal upheld the Committee of Creditors' decision to reject the Expression of Interest (EOI) and proceed with liquidation, finding that the rejection was within their rights and based on eligibility criteria. The Tribunal also ruled that the Resolution Professional acted within their duties in not placing the Resolution Plan before the CoC. The CoC's authority to resolve to liquidate the Corporate Debtor before the statutory period expired was confirmed, leading to the dismissal of the appeals as the decisions were deemed justified within the statutory framework and commercial wisdom.

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Issues Involved:

1. Can the Committee of Creditors reject the opportunity to submit the Resolution Plan based on the contents of the Expression of Interest (EOI)Rs.
2. Whether the Committee of Creditors can reject the EOI without a formal meetingRs.
3. Whether the application seeking direction against the Resolution Professional to receive and place the Resolution Plan before the Committee of Creditors was maintainableRs.
4. Whether the Committee of Creditors was authorized to close the Corporate Insolvency Resolution Process before the expiry of the statutory period and resolve to liquidate the Corporate DebtorRs.

Issue-Wise Detailed Analysis:

1. Rejection of Resolution Plan Based on EOI Contents:

The Appellants argued that the Committee of Creditors (CoC) rejected their Expression of Interest (EOI) hastily and prematurely. The CoC decided to apply for liquidation despite the Appellants submitting a complete EOI on January 5, 2019, before the expiry of the 180-day period under Section 12 of the Insolvency and Bankruptcy Code (IBC). The Appellants contended that the EOI should be analyzed based on criteria laid down under Section 25(2)(h) read with Regulation 36A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Tribunal found that the CoC was within its rights to reject the EOI if it did not meet the eligibility criteria, and the CoC's decision to liquidate was not premature as it was taken within the statutory framework.

2. Rejection of EOI Without Formal Meeting:

The Appellants claimed that the CoC rejected their EOI summarily without a formal meeting. The Tribunal noted that the CoC had discussed the EOI in its meetings and found that the Appellants did not submit the required documents despite reminders. The CoC's decision to reject the EOI and proceed with liquidation was based on commercial wisdom and was within their powers under Section 33(2) of the IBC.

3. Maintainability of Application Against Resolution Professional:

The Appellants filed an application seeking direction against the Resolution Professional to receive and place their Resolution Plan before the CoC. The Tribunal referred to the Supreme Court's ruling in ArcelorMittal India (P) Ltd. v. Satish Kumar Gupta, which clarified that a Resolution Professional's role is to examine and confirm that the Resolution Plan conforms to the Code and present it to the CoC. The Resolution Professional is not required to take any decision but to ensure the completeness of the Resolution Plan. The Tribunal found that the application was not maintainable as the Resolution Professional had acted within his duties.

4. Authorization to Close CIRP and Resolve to Liquidate:

The Appellants argued that the CoC acted in haste by resolving to liquidate the Corporate Debtor before the expiry of the 180-day CIRP period. The Tribunal highlighted that under Section 33(2) of the IBC, the CoC is empowered to decide to liquidate the Corporate Debtor at any time after its constitution and before the confirmation of the Resolution Plan. The Tribunal found that the CoC's decision to liquidate was within its statutory powers and commercial wisdom.

Conclusion:

The Tribunal dismissed both appeals, finding no merit in the Appellants' arguments. The CoC's decisions were within the statutory framework and commercial wisdom, and the Resolution Professional had acted within his duties. The Tribunal emphasized that the Resolution Applicant has no vested right for their Resolution Plan to be considered, and the CoC's decision to liquidate was justified.

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