Tribunal Orders Simultaneous Processing of Resolution Plan and PUFE Applications to Ensure Prompt Decisions

The Tribunal directed the Adjudicating Authority to proceed with the Resolution Plan Application without waiting for the decision on PUFE Applications. It was found that the consideration of the Resolution Plan should not be deferred, and the eligibility of the Resolution Applicant could be assessed simultaneously. The Adjudicating Authority was instructed to handle both types of applications concurrently and aim for prompt decisions.

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Issues Involved:
1. Whether the Adjudicating Authority committed an error in directing for consideration of PUFE Transaction Applications first and adjourning the Application for approval of the Resolution Plan to be heard later.
2. The eligibility of the Resolution Applicant under Section 29A of IBC.
3. The procedural conduct of the Adjudicating Authority in handling the CIRP and related applications.

Summary:

Issue 1: Consideration of PUFE Transaction Applications First
The Appellant challenged the Order dated 12th April 2023, which directed that the PUFE Transaction Application (I.A. No. 1960 of 2021) be heard first before the Plan Approval Application (I.A. No. 5385 of 2021). The Appellant contended that the Plan Approval Application, pending for over a year and a half, should be prioritized. The Adjudicating Authority reasoned that if preferential transactions are established against the Appellant, the project's fate would be in jeopardy. The Tribunal found that the legislative intent under Section 26 of the Code is clear that avoidance applications should not affect the CIRP proceedings. The Tribunal directed that the Plan Approval Application should not be deferred and can be considered simultaneously with the PUFE Applications.

Issue 2: Eligibility of the Resolution Applicant
The Intervener, IIFL Finance Limited, argued that the Appellant indulged in preferential, undervalued, and fraudulent transactions, making him ineligible under Section 29A(g) of IBC. The Tribunal noted that while considering the Plan Approval Application, the Adjudicating Authority could also consider the eligibility of the Resolution Applicant. The Tribunal emphasized that the Resolution Plan contemplates that the SRA would pursue the PUFE Transactions' Application and that the pendency of such applications does not prohibit the insolvency resolution process from proceeding.

Issue 3: Procedural Conduct
The Tribunal observed that the Adjudicating Authority had the jurisdiction to consider both the Plan Approval Application and PUFE Applications together. The Tribunal found that the Adjudicating Authority erred in observing that the consideration of the Plan Approval Application had to be deferred until after the PUFE Applications were decided. The Tribunal directed the Adjudicating Authority to proceed with the Plan Approval Application and consider the eligibility of the Resolution Applicant as raised by the Intervener.

Conclusion:
The Tribunal disposed of the Appeal with the following directions:
1. The Adjudicating Authority shall proceed to consider the Resolution Plan Application (I.A. No. 5385 of 2021) without awaiting the decision in PUFE Applications.
2. The Adjudicating Authority shall decide the Plan Approval Application and consider the eligibility of the Resolution Applicant.
3. The Adjudicating Authority may hear and decide the Plan Approval Application and PUFE Applications simultaneously.
4. If the Resolution Plan Application is decided, the RP may seek liberty from the Adjudicating Authority to prosecute the PUFE Applications instead of the SRA.
5. The Adjudicating Authority shall endeavor to decide the Applications at an early date.

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