Resolution plan with 100% creditor approval upheld despite shared utilities dispute under Section 30(2)

NCLAT upheld the adjudicating authority's approval of a resolution plan that received 100% CoC vote share. The tribunal followed SC precedents establishing that commercial wisdom of CoC is paramount and non-justiciable, with interference permitted only when resolution plans violate Section 30(2) provisions. The appellant challenged shared utilities arrangements between corporate debtor and successful resolution applicant. NCLAT found no Section 30(2) violations, noting the resolution plan properly addressed shared utilities used by both hotel operations and appellant's residential/commercial establishments. The tribunal clarified that plan approval doesn't prevent parties from establishing separate arrangements for shared utilities or pursuing rights in competent courts.

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Issues Involved:
1. Approval of the Resolution Plan by the Adjudicating Authority.
2. Reliefs and concessions granted regarding shared utilities and services.
3. Appellant's challenge to the Resolution Plan and reliefs granted.

Summary:

1. Approval of the Resolution Plan by the Adjudicating Authority:
The Appeal was filed by a Shareholder of the Corporate Debtor challenging the order dated 04.01.2024 by the National Company Law Tribunal (NCLT), Kolkata Bench, which approved the Resolution Plan submitted by Shriram Multicom Pvt. Ltd. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor commenced on 11.02.2022 u/s 7 of the Insolvency and Bankruptcy Code, 2016. The Resolution Plan was approved by the Committee of Creditors (CoC) with a 100% vote share on 30.05.2023.

2. Reliefs and Concessions Granted Regarding Shared Utilities and Services:
The Appellant contended that the impugned order exceeded the scope of the Expression of Interest (EOI) issued by the Resolution Professional (RP) since the Resolution Plan contained conditions beyond the EOI. The Appellant argued that the Adjudicating Authority erred in granting reliefs and concessions for utilities and shared services outside the leasehold area without the Appellant's consent. The RP and CoC refuted these submissions, arguing that the commercial wisdom of the CoC is paramount and non-justiciable. The reliefs and concessions were necessary for running the Corporate Debtor and did not adversely affect the Appellant's rights.

3. Appellant's Challenge to the Resolution Plan and Reliefs Granted:
The Appellant argued that the shared utilities and services were not part of the Information Memorandum and that the Adjudicating Authority could not direct the Appellant to provide unfettered access to these utilities. The Tribunal noted that the shared utilities and equipment were installed when the Corporate Debtor was a subsidiary of the Appellant. The Tribunal found no error in granting reliefs and concessions but stated that this does not fetter the Appellant's right to enter a fresh arrangement with the Successful Resolution Applicant (SRA) or to seek relief in a competent court.

Conclusion:
The Tribunal upheld the impugned order dated 04.01.2024 approving the Resolution Plan, stating that no grounds were made out to interfere with the approval within the meaning of Section 30(2) of the Code. The approval of the Resolution Plan and the grant of reliefs and concessions do not fetter the right of the parties to establish their rights and obligations in a competent court. The Appeal was disposed of accordingly, with parties bearing their own costs.

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