2022 (2) TMI 17 - AT - Insolvency and Bankruptcy

Tribunal grants access to Resolution Plan for appeal, balancing confidentiality and appellant's rights.

Association of aggrieved Workmen of Jet Airways (India) Limited Versus Jet Airways (India) Ltd., Committee of Creditors led by State Bank of India, Shri Ashish Chhawchharia, The Consortium of Mr. Murari Lal Jalan & Mr. Florian Fritsch

The Tribunal ruled that the Resolution Plan, once approved, is not confidential and should be accessible to claimants with a genuine interest. The ... Entitlement of Appellant(s)/ Applicant to be given a copy of Resolution Plan or any part of the Resolution Plan in the Appeal - whether the Appellant who has filed Appeal against the order of the Adjudicating Authority approving the Resolution Plan submitted by Respondent No.4 is entitled for a copy of Resolution Plan or any part of it in these proceedings? - HELD THAT:- Since Section 24 of the IB Code read with Regulation 21 (3) (iii) of Process Regulation 2016, makes it clear that all Members, who were to participate in the meeting of the Committee of Creditors had to be provided copies of all relevant documents. Thus, the entitlement of copy of documents during the CIRP is for only those who are to participate in CIRP. As per Section 24 of the Code, Operational Creditors or their representatives, if the amount of their aggregate dues is not less than 10% of the debt, are also entitled for notice of meeting of Committee of Creditors. Thus, the category of creditors including the Members of the suspended Board of Directors or the partners of the corporate persons, who are entitled to participate in the meeting of the Committee of Creditors are entitled to receive copies of all documents. Hon’ble Apex Court had occasion to consider these provisions of Code and the Regulations in context of right to have access to Resolution Plan by erstwhile/ suspended Board of Directors of the Corporate Debtor in Vijay Kumar Jain vs. Standard Chartered Bank and Ors. [2019 (2) TMI 97 - SUPREME COURT] - The Hon’ble Supreme Court held that Members of suspended Board are entitled to participate in the meeting of Committee of Creditors. They are also entitled to be given a copy of Resolution Plan before such meetings are held. When the right to Appeal on the ground enumerated in sub-section (3) of Section 61 is provided, unless the Appellant is aware of the contents of the Resolution Plan, how he will be able to satisfy the Appellate Court that the grounds enumerated in sub-section (3) of Section 61 are made out in reference to approval of the Resolution Plan. The provision of Section 61, sub-section (3) reaffirms the view that after approval of the Resolution Plan, Resolution Plan does not remain a confidential document, so as to deny its perusal to a claimant, who is aggrieved by the Plan and has come up on the Appeal - Resolution Plan after its approval by the Adjudicating Authority is no more a confidential document, so as to deny access to even a claimant. Now coming back to the facts of the present case, as submitted by the learned Counsel for the Respondent No.4 that there are more than 20,000 Operational Creditors apart from Financial Creditors and other stakeholders. It is noticed that before the Adjudicating Authority, Applications were filed by several Applicants including National Aviators’ Guild, Jet Aircraft Maintenance Engineers Welfare Association, Bhartiya Kamgar Sena, Jet Airways Cabin Crew Association etc. before the Adjudicating Authority praying for copy of Resolution Plan, which Application was rejected by detailed order dated 22nd February, 2021. We, thus, are not inclined to issue a direction to provide entire Resolution Plan to the Appellant herein. The prayer made by Appellant/ Applicant for the copy of Resolution Plan is decided accordingly. Issues Involved:1. Entitlement of the Appellant to a copy of the Resolution Plan.2. Confidentiality of the Resolution Plan post-approval.3. Right to access the Resolution Plan for effective appeal under Section 61(3) of the Insolvency and Bankruptcy Code (IBC).Issue-wise Detailed Analysis:1. Entitlement of the Appellant to a Copy of the Resolution Plan:The Appellant, an association of aggrieved workmen of Jet Airways (India) Ltd., challenged the order approving the Resolution Plan on several grounds. They sought a copy of the Resolution Plan to effectively support their appeal. The Appellant argued that confidentiality in CIRP proceedings is limited and not meant to be maintained after the CIRP concludes, citing Section 31(3)(b) of the IBC, which mandates the Resolution Professional (RP) to forward all records, including the Resolution Plan, to the Insolvency and Bankruptcy Board of India (IBBI). The Respondents countered that the Resolution Plan is a confidential document and cannot be disclosed without the consent of the Resolution Applicant, and only the Committee of Creditors (CoC) members are entitled to access it.2. Confidentiality of the Resolution Plan Post-Approval:The Tribunal examined the confidentiality provisions under the IBC and related regulations. It noted that while confidentiality is maintained during the CIRP, the Resolution Plan, once approved by the Adjudicating Authority, becomes part of the public record. The Tribunal referred to Rule 114 of the NCLT Rules, 2016, which allows parties to inspect the record of the case, including the Resolution Plan. The Tribunal concluded that the Resolution Plan does not remain confidential after approval by the Adjudicating Authority, and the Appellant, being a claimant, is entitled to access it.3. Right to Access the Resolution Plan for Effective Appeal under Section 61(3) of the IBC:Section 61(3) of the IBC provides grounds for appeal against the approval of a Resolution Plan, including contravention of law, material irregularity, and non-compliance with criteria specified by the Board. The Tribunal emphasized that to effectively appeal, the Appellant must be aware of the contents of the Resolution Plan. Without access to the Resolution Plan, the Appellant cannot substantiate their grounds for appeal. The Tribunal reaffirmed that the Resolution Plan, after approval, is not a confidential document and should be accessible to claimants who have a genuine interest in the process.Conclusion:The Tribunal directed that the relevant part of the Resolution Plan dealing with the claims of workmen and employees should be provided to the Appellant within three weeks. The Tribunal balanced the need for confidentiality with the Appellant's right to access information necessary for their appeal, ensuring that the Resolution Plan's confidentiality is maintained only during the CIRP and not post-approval.