Tribunal upholds RP and CoC actions in CIRP, deems sale permissible.

The tribunal dismissed the appeal, upholding the validity of the RP and CoC's actions under the IBC and CIRP Regulations. The sale of the BKC property was deemed permissible, and the prohibition under Section 14(1)(b) did not extend to the RP and CoC acting within their statutory powers. The tribunal emphasized the importance of preserving the Corporate Debtor's assets and maximizing their value during the CIRP.

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Issues Involved:
1. Right of the appellant to challenge the decision of the NCLT.
2. Prohibition under Section 14(1)(b) of the Insolvency and Bankruptcy Code (IBC) on the Corporate Debtor, RP, and CoC.
3. RP's power under Regulation 29 of CIRP Regulations to sell assets during Moratorium.
4. Validity of RP and CoC's decision to sell BKC property during Moratorium.
5. Prohibition under Section 14(1)(c) on Financial Creditors to enforce security interest.
6. Relief entitled to the appellant.

Issue-wise Detailed Analysis:

1. Right of the Appellant to Challenge the Decision of the NCLT:
The appellant, a registered trade union representing 95% of aircraft maintenance engineers of the Corporate Debtor, had its claim worth INR 1,525,859,239/- admitted in the CIRP. The appellant challenged the NCLT's order approving the sale of the Corporate Debtor's assets, arguing that the sale was impermissible under the Moratorium imposed by Section 14 of the IBC. The tribunal found that the appellant had sufficient locus to file the appeal as a stakeholder with an admitted claim and interest in the Corporate Debtor's assets.

2. Prohibition under Section 14(1)(b) on the Corporate Debtor, RP, and CoC:
Section 14(1)(b) imposes a statutory freeze on the Corporate Debtor from transferring, encumbering, alienating, or disposing of its assets during the Moratorium. The tribunal examined whether this prohibition extends to the Resolution Professional (RP) and the Committee of Creditors (CoC). It concluded that the prohibition is directed at the Corporate Debtor, but the RP and CoC are not restrained by this provision if they act within the powers conferred by the IBC and the CIRP Regulations. Specifically, Section 28(1)(b) allows the RP to create security interests with CoC approval, indicating an exception to the prohibition.

3. RP's Power under Regulation 29 of CIRP Regulations to Sell Assets During Moratorium:
Regulation 29 permits the RP to sell unencumbered assets of the Corporate Debtor if necessary for better realization of value, subject to CoC approval. The tribunal held that despite the Moratorium, the RP could conduct such sales under Regulation 29, provided the sale is for better realization of value and approved by the CoC. In this case, the RP's decision to sell the BKC property was found to be within the regulatory framework, as it was approved by the CoC with 74.45% votes.

4. Validity of RP and CoC's Decision to Sell BKC Property During Moratorium:
The tribunal determined that the decision to sell the BKC property was permissible and not prohibited by the Moratorium under Section 14(1)(b). The RP acted within the powers conferred by the IBC and the CIRP Regulations, and the CoC's approval was obtained as required. The sale was deemed necessary for better realization of the Corporate Debtor's value, and the proceeds were used to secure title to six aircrafts and settle claims with HDFC.

5. Prohibition under Section 14(1)(c) on Financial Creditors to Enforce Security Interest:
Section 14(1)(c) prohibits Financial Creditors from foreclosing, recovering, or enforcing any security interest during the Moratorium. The tribunal noted that this prohibition is to prevent depletion of the Corporate Debtor's assets and ensure a successful insolvency resolution. The tribunal emphasized that Secured Creditors cannot enforce their security interests during the CIRP, as it would defeat the purpose of the Moratorium and the insolvency resolution process.

6. Relief Entitled to the Appellant:
The tribunal acknowledged that the appellant, as a stakeholder, had its claim admitted in the CIRP. However, since the CIRP had culminated in a successful resolution with an approved Resolution Plan, the tribunal was not inclined to reverse the sale transaction at this stage. The tribunal noted that the sale of the BKC property and the acquisition of the aircrafts increased the Corporate Debtor's asset value, and the Resolution Plan addressed the claims of all stakeholders, including the appellant. Consequently, no pecuniary benefit could be extended to the appellant, and the appeal was dismissed.

Conclusion:
The tribunal dismissed the appeal, upholding the validity of the RP and CoC's actions under the IBC and CIRP Regulations. The sale of the BKC property was deemed permissible, and the prohibition under Section 14(1)(b) did not extend to the RP and CoC acting within their statutory powers. The tribunal emphasized the importance of preserving the Corporate Debtor's assets and maximizing their value during the CIRP.

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