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of <h1>Tribunal upholds CoC's Resolution Plan over OTS offer, citing commercial wisdom and stakeholder benefit.</h1> <h3>Bharat Hydro Power Corporation Private Limited Versus Sachin Gopal Jathar, Central Bank of India, Kundan Care Products Limited</h3> Bharat Hydro Power Corporation Private Limited Versus Sachin Gopal Jathar, Central Bank of India, Kundan Care Products Limited - TMI Issues Involved:1. Acceptance of One Time Settlement (OTS) Proposal.2. Consideration of OTS Proposal by Committee of Creditors (CoC).3. Approval of the Resolution Plan.4. Jurisdiction and commercial wisdom of CoC.Issue-wise Detailed Analysis:1. Acceptance of One Time Settlement (OTS) Proposal:The Appellant proposed an OTS amount of Rs. 10 Crores to the Central Bank of India on 14.10.2020, which the Bank responded to on 16.10.2020, indicating that if the Corporate Debtor intended to settle under OTS, an appropriate application under Section 12A of the Insolvency and Bankruptcy Code, 2016 (IBC) needed to be filed. The Bank's letter did not accept the OTS offer but required further details for consideration. The Appellant reiterated its proposal on 09.11.2020, but the Bank never formally accepted the OTS offer. Consequently, no application under Section 12A was filed before the Adjudicating Authority.2. Consideration of OTS Proposal by Committee of Creditors (CoC):The CoC considered the OTS proposal during its meeting on 03.02.2021. The Suspended Board of Directors presented the OTS offer, but the CoC decided to continue with the Corporate Insolvency Resolution Process (CIRP) and proceed with the Resolution Plan. The CoC's decision indicated that the OTS offer was not accepted. Regulation 30A of the IBC specifies the procedure for withdrawal applications under Section 12A, which includes obtaining 90% CoC approval, which was not achieved in this case.3. Approval of the Resolution Plan:The Resolution Plan submitted by Respondent No. 3, Kundan Care Products Ltd., was approved by the CoC with 100% voting. The Appellant's argument that their OTS offer was better than the Resolution Plan was dismissed, as the commercial wisdom of the CoC in approving the Resolution Plan is not subject to judicial review. The CoC's decision was based on the commercial viability and overall benefit to the stakeholders.4. Jurisdiction and Commercial Wisdom of CoC:The Tribunal emphasized that the commercial wisdom of the CoC cannot be judicially reviewed. The CoC's decision to approve the Resolution Plan over the OTS offer was within its jurisdiction and commercial discretion. The Tribunal referenced previous judgments to support this principle, highlighting that the CoC's decisions are based on commercial considerations and are not to be interfered with unless there is a procedural irregularity or illegality.Conclusion:The Tribunal found no error in the Adjudicating Authority's order rejecting the Appellant's I.A. No. 70 of 2021 and approving the Resolution Plan as per I.A. No. 134 of 2021. The appeals were dismissed, affirming the CoC's decision and the Adjudicating Authority's orders. The Tribunal reiterated the importance of the CoC's commercial wisdom and the procedural requirements under Section 12A of the IBC.
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