NCLAT upholds fresh Form G issuance after Rs.3 crore property addition during CIRP process

NCLAT Principal Bench affirmed the Adjudicating Authority's order directing issuance of fresh Form G after properties worth approximately Rs.3 crores were added to Corporate Debtor's assets during CIRP process under HC Delhi orders. The tribunal agreed that since property value exceeded the Resolution Applicant's plan value, fresh Form G was justified to inform interested parties of increased corporate value. NCLAT disposed of the appeal while directing completion of entire resolution process within three months and confirming appellant's right to submit fresh Expression of Interest.

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Issues involved:
Delay condonation application for filing appeal, Direction for issuance of fresh Form G, Rejection of present Resolution Plan, Fresh valuation of Corporate Debtor's properties, Completion of entire process within three months, Committee of Creditors' contention on revaluation of assets, Application of legal precedent on valuation of assets in insolvency cases.

The judgment addressed an application for condonation of delay in filing the appeal, granting the condonation due to valid reasons provided by the Appellant. The main issue revolved around the direction given by the Adjudicating Authority for the issuance of a fresh Form G, following the addition of properties to the assets of the Corporate Debtor. The Adjudicating Authority's decision was based on the need to inform prospective Resolution Applicants of the increased value of the Corporate Debtor due to the newly added properties.

The Appellant challenged the Adjudicating Authority's order, arguing that the Resolution Plan had already addressed the property dispute, and there was no need for the issuance of a fresh Form G. However, the Resolution Professional clarified that the properties were not yet in possession of the Corporate Debtor and would only be acquired after the sale deed execution. The Tribunal agreed with the Adjudicating Authority's reasoning for issuing the fresh Form G, as the added property value exceeded the plan value submitted by the Resolution Applicant.

A direction was issued by the Tribunal to complete the entire process, including the consideration of the Resolution Plan, within three months. The Committee of Creditors contested the revaluation of assets ordered by the Adjudicating Authority, citing a legal precedent. However, the Tribunal differentiated the present case, emphasizing that the addition of property value necessitated the issuance of a fresh Form G to attract higher bids and maximize the value for the Corporate Debtor.

The Tribunal rejected the Committee of Creditors' objection to the issuance of a fresh Form G, emphasizing the importance of reflecting the increased asset value to benefit the Corporate Debtor. The judgment concluded by disposing of the appeal, allowing the Appellant to submit an Expression of Interest in response to the Form G issued by the Resolution Professional.

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