2024 (2) TMI 92 - AT - Insolvency and Bankruptcy

NCLAT upholds Committee of Creditors' resolution plan approval, dismisses challenge citing Section 30(2) compliance

The NCLAT dismissed an appeal challenging the rejection of a resolution plan by the third respondent. The tribunal held that Committee of Creditors' ... Rejection of the Resolution Plan submitted by Respondent No. 3 - HELD THAT:- The Approval of the Resolution Plan by the CoC is the commercial wisdom of the CoC challenge to which approval can be on limited ground when it is shown that Resolution Plan is not in compliance with Section 30(2) of the Code. No ground has been made out in the Appeal to show that Resolution Plan is in non-compliance of Section 30(2) of the Code. Further, this Tribunal in AJR INFRA AND TOLLING LTD. (FORMERLY GAMMON INFRASTRUCTURE PROJECTS LTD.) VERSUS SUTANU SINHA; COMMITTEE OF CREDITORS PATNA HIGHWAY PROJECTS LTD. ; SILVER POINT LUXEMBOURG PLATFORM S.A.R.L. [2023 (5) TMI 1291 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] has held that the plan is in compliance of the all mandatory requirements and plan has already been upheld. Thus, no grounds have been made out to interfere with the Order impugned passed by the Adjudicating Authority - appeal dismissed. Issues Involved:1. Rejection of the Resolution Plan submitted by Respondent No. 3.2. Categorization of the Appellant's claim as disputed.3. Confidentiality and provision of the Resolution Plan to the Appellant.4. Commercial wisdom of the Committee of Creditors (CoC) in approving the Resolution Plan.5. Compliance of the Resolution Plan with the Insolvency and Bankruptcy Code.Summary:Issue 1: Rejection of the Resolution Plan submitted by Respondent No. 3The Appellant challenged the Order dated 10th May 2022, passed by the National Company Law Tribunal (NCLT), rejecting the Application for the rejection of the Resolution Plan submitted by Respondent No. 3. The Appellant argued that the Resolution Plan included a claim of Rs. 428,22,98,000/- from NHAI, which was also a claim by the Appellant but was kept under the disputed category. The Adjudicating Authority had approved the Resolution Plan, which the Appellant contended was prejudicial to their interest.Issue 2: Categorization of the Appellant's claim as disputedThe Resolution Professional categorized the Appellant's claim as disputed due to ongoing arbitration. The Appellant did not challenge this categorization before the Adjudicating Authority. The Tribunal noted that the claim was collated and verified by the Resolution Professional and kept under the disputed category, which the Appellant did not contest at any point.Issue 3: Confidentiality and provision of the Resolution Plan to the AppellantThe Appellant requested a copy of the approved Resolution Plan, which was denied on the grounds of confidentiality. The Tribunal upheld that the Resolution Plan is a confidential document, and the Appellant, being a promoter and related party, was not entitled to receive a copy.Issue 4: Commercial wisdom of the CoC in approving the Resolution PlanThe Tribunal emphasized the paramountcy of the commercial wisdom of the CoC, which had approved the Resolution Plan with a 97.95% vote share. The Tribunal referred to the Supreme Court judgments in K. Sashidhar Vs. Indian Overseas Bank and Ors. and CoC of Essar Steel India Limited Through Authorised Signatory Vs. Satish Kumar Gupta & Ors., highlighting that neither the NCLT nor the NCLAT has jurisdiction to reverse the commercial decisions of the CoC.Issue 5: Compliance of the Resolution Plan with the Insolvency and Bankruptcy CodeThe Tribunal noted that the Resolution Plan had already been upheld by the Tribunal in its judgment dated 25th May 2023, which confirmed that the plan complied with all mandatory requirements under the Insolvency and Bankruptcy Code. The Tribunal found no legal infirmity in the treatment of the Appellant's claim and no non-compliance with Section 30(2) of the Code.Conclusion:The Tribunal dismissed the Appeal, affirming that no grounds were made out to interfere with the Order of the Adjudicating Authority, which had rejected the Appellant's Application for the rejection of the Resolution Plan. The commercial wisdom of the CoC and the compliance of the Resolution Plan with the Code were upheld.