Tribunal Upholds Approval of Resolution Plan under Insolvency Law

The Tribunal upheld the Adjudicating Authority's approval of the Resolution Plan, finding it compliant with the Insolvency and Bankruptcy Code. The Tribunal dismissed the Appellant's claim of unfair treatment, noting the property dispute was adequately addressed in the Resolution Plan. The Tribunal affirmed the equal treatment of creditors and upheld the commercial wisdom of the Committee of Creditors. The appeal was dismissed, confirming the Resolution Plan's validity and implementation.

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Issues Involved:
1. Justification of the Adjudicating Authority in approving the Resolution Plan as per Section 30(2) of the Insolvency and Bankruptcy Code, 2016.
2. Whether the Appellant was unfairly dealt with regarding the settlement of its claim under the Resolution Plan.

Detailed Analysis:

1. Justification of the Adjudicating Authority in approving the Resolution Plan:

The primary issue was whether the Adjudicating Authority was justified in approving the Resolution Plan in compliance with Section 30(2) of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional (RP) had filed an application for the approval of the Resolution Plan submitted by M/s. Gautam Builders in consortium with M/s. Rapid Contracts Private Limited, which was approved by the Committee of Creditors (CoC) with a 96.07% majority. The Adjudicating Authority observed that the Resolution Plan complied with the provisions of the Code, including equitable treatment of creditors and the management of the corporate debtor's affairs post-approval.

The Tribunal emphasized that the commercial wisdom of the CoC is non-justiciable unless it does not comply with Section 30(2) of the Code. The Hon’ble Supreme Court in 'K Sashidhar vs. Indian Overseas Bank & Ors.' and 'Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited' reiterated that the limited judicial review available cannot trespass upon the CoC's business decisions. The Tribunal concluded that there was no illegality or infirmity in the approval of the Resolution Plan by the Adjudicating Authority.

2. Whether the Appellant was unfairly dealt with regarding the settlement of its claim:

The Appellant, Uttar Pradesh Awas Evam Vikash Parishad (UP Housing and Development Board), contended that the Resolution Plan was approved without considering whether a property not belonging to the Corporate Debtor could be included in the Resolution Plan. The Appellant argued that the property, governed by a Higher Purchase Agreement, was wrongfully included in the Resolution Plan, and they were not informed about the CoC meetings or provided with a copy of the Resolution Plan.

The Tribunal noted that the Appellant had issued allotment letters and a Higher Purchase Agreement, creating an interest of the Corporate Debtor in the plot. Despite defaults in payments, the Agreement was not canceled, and the right of revocation was not exercised before the insolvency commencement date. The Tribunal found that the Appellant's claim as an Operational Creditor was admitted, and the Resolution Plan proposed 10% of the admitted claim amounting to Rs. 12,30,75,275/-. The Tribunal held that the belated challenge by the Appellant was untenable and that the Resolution Plan provided equal treatment to all classes of creditors.

The Tribunal also addressed the issue of non-receipt of notices, stating that emails were sent to the correct email address as per the record. The Tribunal upheld the commercial wisdom of the CoC and found no substantial grounds to interfere with the Adjudicating Authority's order.

Conclusion:

The Tribunal dismissed the appeal, affirming that the Resolution Plan met all essential requisites under Section 30(2) of the Code and was approved by the CoC with a significant majority. The implementation of the Resolution Plan was upheld, and no substantial grounds were found to interfere with the Adjudicating Authority's order. The appeal was dismissed with no order as to costs.

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