Appeal challenging resolution plan approval dismissed. Resolution Applicant eligibility upheld. Operational Creditors' rep not required.

The Tribunal dismissed the appeal challenging the approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016. It found the Successful Resolution Applicant (SRA) eligible despite connections with the Corporate Debtor. The inclusion of the Operational Creditors' representative in the Committee of Creditors was deemed unnecessary for the plan's validity. No penal actions against the Resolution Professional were warranted, and the appeal was disposed of without costs.

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Issues Involved:

1. Approval of the resolution plan by the Adjudicating Authority.
2. Compliance with Section 29-A, Section 24(3)(c), and Section 30(2) of the Insolvency and Bankruptcy Code, 2016.
3. Eligibility of the Successful Resolution Applicant (SRA).
4. Inclusion of the representative of Operational Creditors in the Committee of Creditors (CoC).

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:

The appeal challenges the order dated 03.12.2020, which approved the resolution plan submitted by the Resolution Professional (RP) under Section 31 of the Insolvency and Bankruptcy Code, 2016 (the Code). The resolution plan was approved in the CoC meeting held on 13.11.2019 and was sanctioned by the Adjudicating Authority, subject to specific comments regarding performance security and reliefs and concessions.

2. Compliance with Section 29-A, Section 24(3)(c), and Section 30(2) of the Code:

The Appellant argued that the Adjudicating Authority failed to appreciate the mandatory provisions of Section 29-A, Section 24(3)(c), and Section 30(2) of the Code. Specifically, the Appellant contended that the SRA was ineligible under Section 29-A due to its connection with the Corporate Debtor and other related entities. The Tribunal examined the relationship between the SRA and the Corporate Debtor and found that the SRA was not ineligible under Section 29-A.

3. Eligibility of the Successful Resolution Applicant (SRA):

The Appellant argued that the SRA was ineligible to submit a resolution plan under Section 29-A of the Code. The Tribunal noted that the SRA, Passavant Energy & Environment GmbH, was related to the Corporate Debtor through Drake and Scull International PJSC, UAE. However, the Tribunal found that the SRA did not suffer from any conditions mentioned in Section 29-A that would render it ineligible. The Tribunal also considered legal opinions and advice from the process advisor and concluded that the SRA was eligible to submit the resolution plan.

4. Inclusion of the Representative of Operational Creditors in the CoC:

The Appellant claimed that the RP failed to include a representative of the Operational Creditors in the CoC, making the constitution of the CoC defective. The Tribunal reviewed the emails sent by the RP to the Operational Creditors, requesting them to appoint a representative. Despite multiple requests, no consensus was reached among the Operational Creditors to appoint a representative. The Tribunal concluded that the RP had fulfilled his duty and that the absence of a representative did not invalidate the proceedings of the CoC.

Conclusion:

The Tribunal found no merit in the appeal and dismissed it. The resolution plan was submitted and approved in accordance with the provisions of the Code. The Tribunal also found no grounds to initiate penal proceedings against the RP or to refer the matter to the Insolvency and Bankruptcy Board of India (IBBI) for disciplinary action. The appeal was disposed of with no order as to costs.

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