Tribunal upholds CoC's decision on Resolution Plan appeal

The tribunal dismissed the appeal challenging the approval of Respondent No.3's Resolution Plan by the Adjudicating Authority. The CoC's decision to approve the plan was upheld, emphasizing their commercial wisdom. The tribunal found no breach of evaluation matrix or IBBI Regulations, stating the CoC's decision is non-justiciable. The Appellant had opportunities to revise its plan, and the grounds for appeal under Section 61(3) of the IBC were deemed unsubstantiated. The appeal was dismissed without costs, affirming the approval of Respondent No.3's Resolution Plan.

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Issues Involved:
1. Approval of the Resolution Plan by the Adjudicating Authority.
2. Compliance with the evaluation matrix and the Insolvency and Bankruptcy Board of India (IBBI) Regulations.
3. Commercial wisdom of the Committee of Creditors (CoC).
4. Opportunity for the Appellant to revise its Resolution Plan.
5. Grounds for appeal under Section 61(3) of the Insolvency and Bankruptcy Code (IBC).

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan by the Adjudicating Authority:
The appeal was filed by an unsuccessful resolution applicant challenging the order dated 13.10.2021, where the Adjudicating Authority approved the Resolution Plan of Respondent No.3. The Corporate Insolvency Resolution Process (CIRP) was initiated against Bohra Industries Limited on 9th August 2019. The Resolution Plan submitted by the Appellant was rejected by the CoC with 100% voting, while the plan by Respondent No.3 was approved unanimously.

2. Compliance with the evaluation matrix and the IBBI Regulations:
The Appellant argued that the Adjudicating Authority erred in approving the Resolution Plan of Respondent No.3, claiming the higher upfront payment offered by the Appellant should have been preferred. The CoC followed the evaluation matrix, and the Successful Resolution Applicant scored higher (51.49 marks) compared to the Appellant (48.51 marks). The value of Respondent No.3’s plan was 26.31 Crores with NPV of 24.79 Crores, while the Appellant’s plan was valued at 21.25 Crores. The tribunal found no breach of Regulation 39(3) of the IBBI Regulations.

3. Commercial wisdom of the CoC:
The tribunal emphasized the paramount status of the CoC’s commercial wisdom, as highlighted by the Hon’ble Supreme Court in K. Sashidhar vs. Indian Overseas Bank and Ors. The CoC’s decision, made after thorough examination and deliberation, is non-justiciable and beyond judicial intervention.

4. Opportunity for the Appellant to revise its Resolution Plan:
The Appellant claimed no opportunity was given to enhance its plan value after the submission of the second plan by Respondent No.3. However, the tribunal noted that multiple opportunities were provided in the 10th, 11th, 12th, and 13th CoC meetings for both applicants to revise their plans. The final plans were received and voted upon, with Respondent No.3’s plan being approved unanimously.

5. Grounds for appeal under Section 61(3) of the IBC:
The tribunal reviewed the grounds for appeal under Section 61(3) of the IBC, which include contravention of law, material irregularity, non-provision for operational creditors, insolvency resolution process costs, and non-compliance with criteria specified by the Board. The tribunal found no merit in the Appellant’s arguments, as the CoC’s decision adhered to the evaluation matrix and regulatory provisions.

Conclusion:
The tribunal dismissed the appeal, affirming the Adjudicating Authority’s approval of Respondent No.3’s Resolution Plan. The tribunal upheld the CoC’s commercial wisdom and found no procedural or regulatory breaches. The appeal was dismissed with no order as to costs.

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