Tribunal Upholds CoC's Resolution Plan, Rejects Discrimination Claims

The tribunal upheld the resolution plan approved by the Committee of Creditors (CoC) with 100% voting, dismissing the appellant's claims of discrimination against Operational Creditors. It ruled that the CoC's commercial wisdom is final and not subject to judicial review unless the plan violates the Insolvency and Bankruptcy Code or any other law. The tribunal also clarified that non-CoC members are not entitled to information on fair and liquidation value, and confirmed that the RP had properly appointed a registered valuer. The appeal was dismissed for lack of merit, affirming the Adjudicating Authority's order.

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Issues Involved:
1. Discrimination against Operational Creditors
2. Obligation to Inform Fair and Liquidation Value to Non-CoC Members
3. Appointment of Registered Valuer for Fair and Liquidation Value

Issue-wise Detailed Analysis:

1. Discrimination against Operational Creditors:

The appellant, Chhattisgarh State Power Distribution Company Ltd. (CSPDCL), contended that the Resolution Professional (RP) failed to comply with Section 30(2)(b) of the Insolvency and Bankruptcy Code (IBC), thereby discriminating against Operational Creditors. Section 30(2)(b) mandates the RP to ensure that the resolution plan provides for payment of debts to Operational Creditors in a manner specified by the Board, which should not be less than the amount payable in the event of liquidation under Section 53. The RP, however, distributed the proportionate amount to Operational Creditors adhering to Section 30(2)(b) and Section 53 of IBC, and the plan was approved by the Committee of Creditors (CoC) with 100% voting.

The appellant argued that the financial proposal against the total dues amounting to Rs. 48.38 crores of Operational Creditors was made without actual assessment of the liquidation value, violating Section 30(2)(b) read with Section 53 of IBC. The RP allegedly placed the appellant's claim in the last of the waterfall model, causing a 100% loss of the appellant's claim. However, the tribunal found no discrimination among the same class of creditors and upheld the commercial wisdom of CoC, which is final and beyond judicial review unless the plan is contrary to the provisions of IBC or any other law.

2. Obligation to Inform Fair and Liquidation Value to Non-CoC Members:

The appellant contended that the liquidation value of the Corporate Debtor was not communicated to them. The tribunal clarified that Regulation 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 mandates disclosure of liquidation value only to the members of CoC. Since the appellant was not a member of CoC, the RP was not obligated to inform them of the liquidation value. The tribunal rejected this contention, stating that the failure to provide fair and liquidation value to the appellant is not a ground to set aside the order.

3. Appointment of Registered Valuer for Fair and Liquidation Value:

The appellant argued that the RP did not appoint a registered valuer to determine the fair and liquidation value of the Corporate Debtor. The tribunal found that the RP had indeed appointed a registered valuer in compliance with Regulation 27 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The tribunal noted that the information regarding the liquidation value is confidential and is only shared with CoC members. The tribunal concluded that the resolution plan was approved by CoC in compliance with the prescribed procedure under the Code and Regulations.

Conclusion:

The tribunal dismissed the appeal, confirming the order passed by the Adjudicating Authority. The tribunal held that the appellant's contentions regarding discrimination, non-disclosure of liquidation value, and non-appointment of a registered valuer were without merit. The tribunal emphasized that the commercial wisdom of CoC is supreme and cannot be interfered with unless the resolution plan is contrary to the provisions of IBC or any other law. The appeal was found to be devoid of merits and was dismissed.

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