2024 (4) TMI 570 - SCH - Insolvency and Bankruptcy

Resolution Plan Overturned Due to Procedural Errors; Matter Remanded for Reconsideration Under Companies Act and Bankruptcy Code.

Bank of Baroda (Erstwhile Vijaya Bank) and Others Versus Suchi Paper Mills Ltd and Others

The NCLAT set aside the NCLT's order approving the Resolution Plan due to procedural violations, specifically the involvement of a Single Member contrary ... Maintainability of appeal - Approval of Resolution Plan - case in impugned order is that an order approving the Resolution Plan was passed by a Single Member of the NCLT in violation of the provisions of Section 419 (3) of the Companies Act 2013 - HELD THAT:- Since the impugned order of the NCLAT is by way of an order of remand, the appeal is not entertained at the present stage keeping open all the rights and contentions of the parties to be urged before the NCLT. The parties would be at liberty to approach the NCLT at an early date so that orders can be passed in accordance with the above directions. Appeal disposed off. Issues Involved:The issues involved in the judgment are the validity of the order of the National Company Law Tribunal (NCLT) approving the Resolution Plan and the compliance with relevant provisions of the Companies Act 2013 and the Insolvency and Bankruptcy Code 2016.Validity of NCLT Order:The National Company Law Appellate Tribunal (NCLAT) set aside the NCLT's order approving the Resolution Plan due to it being passed by a Single Member of the NCLT in violation of Section 419(3) of the Companies Act 2013. Additionally, the NCLAT noted that the Single Member did not consider the circumstances required under Section 30(2) of the Insolvency and Bankruptcy Code 2016.Representation during Hearing:During the hearing, Mr. Gaurav Agarwal, senior counsel, appeared for the appellant, while Mr. R. Venkataramani, Attorney General for India, represented the fourth respondent, the successful Resolution Applicant.Substantial Steps Taken:It was argued that significant actions were taken following the approval order, including the settlement of financial creditors' dues. These matters, crucial for consideration, will be reviewed by the NCLT when the case is remanded back to it.Order of Remand:As the NCLAT's order was a remand, the Supreme Court did not entertain the appeal at the present stage, preserving all rights and contentions of the parties to be presented before the NCLT. The parties were granted the liberty to approach the NCLT promptly for further proceedings and orders in line with the directions provided.Disposition of Appeal:The appeal was disposed of accordingly, with any pending applications also being resolved as a consequence of the judgment.