Appellate Tribunal Upholds NCLT Approval of Resolution Plan with 100% Creditor Support

The Appellate Tribunal affirmed the National Company Law Tribunal (NCLT) Hyderabad Bench-I's approval of the Resolution Plan submitted by the Resolution Applicant, endorsed by 100% voting share of the Committee of Creditors. The plan was deemed feasible, meeting CIRP Regulations requirements, with priority payment provisions. No allocation to Operational Creditors was made, citing IBC provisions. The Tribunal upheld the plan's binding nature on government entities, dismissing the appeal and concluding that the Adjudicating Authority's decision aligned with IBC provisions, referencing previous judgments.

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Issues Involved:
1. Approval of the Resolution Plan by the Adjudicating Authority.
2. Non-payment to Operational Creditors in the Resolution Plan.
3. Jurisdiction of the Adjudicating Authority to waive electricity dues.
4. Applicability of the Supreme Court decision in TSSPDCL vs. Srigdhaa Beverages.
5. Binding nature of the Resolution Plan on government entities.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan by the Adjudicating Authority:
The Adjudicating Authority, National Company Law Tribunal (NCLT), Hyderabad Bench-I, approved the Resolution Plan submitted by the Resolution Applicant, which was endorsed by 100% voting share of the Committee of Creditors (CoC). The plan was deemed feasible and viable, meeting the requirements specified by the Corporate Insolvency Resolution Process (CIRP) Regulations. The plan included a provision for payment of CIRP costs as a first priority and was above the liquidation value. The approval was contingent on the Resolution Applicant filing an undertaking that the Performance Security Deposit would not be withdrawn until the full bid amount was paid.

2. Non-payment to Operational Creditors in the Resolution Plan:
The Resolution Plan did not allocate any payment to Operational Creditors, including the Andhra Pradesh Central Power Distribution Company Limited (APCPDCL), a government undertaking. The Adjudicating Authority noted that, according to Section 30(2)(b) of the Insolvency and Bankruptcy Code (IBC), Operational Creditors would not receive any amount in the event of liquidation. Furthermore, by virtue of the amendment to Section 31(1) of the IBC, the Resolution Plan is binding on the State Government, making it permissible to approve the plan even without allocation to Operational Creditors.

3. Jurisdiction of the Adjudicating Authority to Waive Electricity Dues:
The Appellant argued that the Adjudicating Authority lacked jurisdiction to waive electricity dues recoverable from the premises, as per Clause 8.4 of the General Terms and Conditions of Supply approved by the Andhra Pradesh Electricity Regulatory Commission. The Appellant contended that the Adjudicating Authority failed to consider this clause, leading to a miscarriage of justice.

4. Applicability of the Supreme Court Decision in TSSPDCL vs. Srigdhaa Beverages:
The Appellant referenced the Supreme Court decision in TSSPDCL vs. Srigdhaa Beverages, which emphasized non-waiver of past dues of premises. The Appellant argued that the Adjudicating Authority's failure to consider this precedent resulted in a serious miscarriage of justice. However, the Appellate Tribunal noted that this issue had been previously addressed in similar cases, including the judgment in Comp. App. (AT) (Ins) No.1078/2020, where it was established that the IBC has overriding effect under Section 238, making any contrary provision in other statutes, including electricity regulations, redundant.

5. Binding Nature of the Resolution Plan on Government Entities:
The Adjudicating Authority highlighted that, as per the amendment to Section 31(1) of the IBC, the Resolution Plan is binding on the central government, any state government, or any local authority to whom statutory dues are owed. The Resolution Applicant is required to obtain necessary approvals within one year from the date of approval of the Resolution Plan.

Conclusion:
The Appellate Tribunal dismissed the appeal, affirming that the issues raised by the Appellant were already covered by previous judgments, particularly the decision in Comp. App. (AT) (Ins) No.1078/2020. The Tribunal concluded that the Adjudicating Authority's approval of the Resolution Plan was in accordance with the provisions of the IBC, and no interference with the impugned order was warranted. The connected application for exemption from filing a certified copy of the order was also closed.

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