Appellate Tribunal corrects errors, converts dissenting vote, upholds Resolution Plan approval

The Appellate Tribunal allowed the appeals, correcting the Adjudicating Authority's errors regarding the enforceability of excluded securities in the Resolution Plan. The Tribunal also permitted the conversion of ICICI Bank's dissenting vote to an assenting vote, with the Committee of Creditors' consent. The Resolution Plan's approval was upheld, with only the interpretations related to excluded securities being adjusted.

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Issues Involved:
1. Approval of the Resolution Plan.
2. Clarification on the enforceability of Excluded Securities.
3. Conversion of ICICI Bank's dissenting vote to an assenting vote.

Detailed Analysis:

1. Approval of the Resolution Plan:
The Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor was initiated on 14th May 2018. The Resolution Plan submitted by Respondent No. 2 was approved by the Committee of Creditors (CoC) with a 91.06% majority on 25th June 2021. The Resolution Professional filed an application for the approval of the Resolution Plan, which was granted by the Adjudicating Authority on 3rd February 2022. The Appellate Tribunal reviewed the Resolution Plan, noting that the plan did not contemplate the extinguishment of excluded securities, contrary to the Adjudicating Authority's conclusion.

2. Clarification on the Enforceability of Excluded Securities:
The Resolution Plan defined "Excluded Securities" as certain guarantees and encumbrances. The Adjudicating Authority's order suggested that these excluded securities were no longer enforceable, as the unpaid debt would be converted into non-convertible redeemable preference shares. However, the Appellate Tribunal found that the Resolution Plan explicitly stated that excluded securities would not be extinguished or waived. The Tribunal concluded that the Adjudicating Authority erred in its interpretation and deleted the part of the order stating that excluded securities were no longer enforceable.

3. Conversion of ICICI Bank's Dissenting Vote to an Assenting Vote:
ICICI Bank filed an application seeking clarification on the enforceability of excluded securities and requested that its dissenting vote be considered as an assenting vote if the excluded securities were enforceable. The CoC had no objection to this request. The Appellate Tribunal allowed this prayer, noting that the approval of the Resolution Plan by the CoC with a 91.06% majority would not be affected by converting ICICI Bank's dissenting vote to an assenting vote. The Tribunal emphasized that this direction should not be treated as a precedent in other matters.

Conclusion:
The Appellate Tribunal allowed the appeals, deleting the parts of the Adjudicating Authority's orders that incorrectly stated that excluded securities were no longer enforceable. The Tribunal also permitted the conversion of ICICI Bank's dissenting vote to an assenting vote, with the CoC's consent. The Resolution Plan's approval remained unaffected except for the corrected interpretations regarding excluded securities.

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