Tribunal directs negotiation with resolution applicants, actions subject to order

The Tribunal partly allowed the application by directing the RP and CoC to invite the present applicant, along with earlier and fresh resolution applicants, for negotiations. The Tribunal clarified that actions taken by the RP or CoC during the interim period would be subject to this order, ultimately disposing of the application accordingly.

---

---

Issues Involved:
1. Compliance with Tribunal's previous orders.
2. Eligibility criteria for resolution applicants.
3. Authority and actions of the Resolution Professional (RP) and Committee of Creditors (CoC).
4. Applicant's locus standi and rights.
5. Interpretation of Tribunal's order dated 24.05.2022.
6. Commercial wisdom and maximization of value.

Issue-wise Detailed Analysis:

1. Compliance with Tribunal's Previous Orders:
The applicant sought compliance with the Tribunal's order dated 24.05.2022, which directed the CoC to consider other resolution plans after declaring the erstwhile successful resolution applicant ineligible under Section 29A(f) of the Insolvency and Bankruptcy Code, 2016. The applicant contended that the RP and CoC acted contrary to this order by issuing a fresh Form G and altering the eligibility criteria without Tribunal's permission, which was beyond their duties and responsibilities.

2. Eligibility Criteria for Resolution Applicants:
The applicant argued that the revised eligibility criteria, which included a net-worth requirement of Rs.35 Crores and an Earnest Money Deposit of Rs.100 Lacs, were impermissible and designed to exclude them. The respondents countered that the new criteria were approved by the CoC in its commercial wisdom to ensure participation from serious prospective resolution applicants.

3. Authority and Actions of the RP and CoC:
The RP and CoC defended their actions by stating that fresh valuation and revised eligibility criteria were necessary due to improved operations and significant time elapsed since the last valuation. They asserted that their actions were within the scope of the Code and aimed at maximizing the value of the corporate debtor. The Tribunal noted that the RP and CoC should have sought directions from the Tribunal before re-initiating the CIRP with new criteria.

4. Applicant's Locus Standi and Rights:
The respondents argued that the applicant, being an unsuccessful resolution applicant, had no vested right to have its plan considered and lacked locus standi to file the application. They cited precedents where it was held that resolution applicants do not have a vested right to have their plans considered. However, the Tribunal found that the applicant had locus standi as the order dated 24.05.2022 was passed in an application filed by the applicant.

5. Interpretation of Tribunal's Order Dated 24.05.2022:
The Tribunal clarified that the order dated 24.05.2022 directed the CoC to make another attempt for consideration of other resolution plans in accordance with law. The Tribunal interpreted this as including both earlier and fresh resolution plans. The Tribunal emphasized that the words "other resolution plans" did not necessarily mean "fresh resolution plans" and directed that the earlier resolution applicants should also be given an opportunity to participate in the negotiation process.

6. Commercial Wisdom and Maximization of Value:
The respondents argued that the fresh process and revised eligibility criteria were in line with the commercial wisdom of the CoC and aimed at maximizing the value of the corporate debtor. The Tribunal acknowledged the importance of commercial wisdom but emphasized that the earlier resolution applicants should also be considered to ensure a fair and comprehensive process.

Conclusion:
The Tribunal partly allowed the application, directing the RP and CoC to invite the present applicant along with other earlier resolution applicants and fresh resolution applicants for negotiations. The Tribunal clarified that steps taken by the RP or CoC during the interim period would be subject to this order. The application was disposed of accordingly.

---