Resolution plan approval upheld despite claims of undisclosed commercial spaces in asset information

The NCLAT dismissed an application challenging the approval of a resolution plan. The appellant claimed the resolution professional failed to disclose certain commercial spaces (4th to 9th floors) in the corporate debtor's assets. The tribunal held that complete information was provided in the Information Memorandum shared with all resolution applicants, including details about floor assignments. The court emphasized that resolution applicants must conduct their own due diligence and seek clarifications if needed. The resolution plan was invited on "as is where is" basis with adequate information disclosure. The application lacked merit and was dismissed.

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Issues Involved:

1. Approval of the Resolution Plan by the Committee of Creditors (CoC).
2. Alleged failure of the Resolution Professional (RP) to provide complete information about the Corporate Debtor's assets.
3. Procedural lapses and potential unfair advantage to the Successful Resolution Applicant (SRA).
4. Request for setting aside the Impugned Order and remanding the Resolution Plan back to the CoC.

Detailed Analysis:

1. Approval of the Resolution Plan by the Committee of Creditors (CoC):

The CoC, in its 14th meeting on 24.05.2023, approved the Resolution Plan of Shriram Multicom Pvt. Ltd. The Appellant's Resolution Plan, although considered, was not approved. The Appellant challenged the approval before the National Company Law Tribunal (NCLT), Kolkata, which was dismissed on 29.02.2024. The Appellant then approached the Supreme Court, which allowed the Appellant to withdraw the appeal with liberty to file appropriate proceedings before the NCLAT.

2. Alleged failure of the Resolution Professional (RP) to provide complete information about the Corporate Debtor's assets:

The Appellant argued that the RP did not issue clarifications regarding certain commercial spaces, specifically the 4th to 9th floors of the Corporate Debtor's asset, which allegedly prevented the Appellant from enhancing its financial offer. The Respondent countered that all necessary information was included in the Information Memorandum and that it was the Appellant's responsibility to seek clarifications during due diligence. The comparative note provided by the Appellant itself indicated that the Information Memorandum mentioned the commercial spaces from the 4th to 9th floors.

3. Procedural lapses and potential unfair advantage to the Successful Resolution Applicant (SRA):

The Appellant claimed that the RP's failure to divulge information about the commercial spaces gave an unfair advantage to the SRA. However, the Tribunal found that the Information Memorandum did contain details about the commercial spaces, and it was the Appellant's duty to conduct due diligence. The Tribunal noted that the Resolution Plan was invited on an "as is where is basis," and the Appellant did not seek any clarification from the RP regarding the assets.

4. Request for setting aside the Impugned Order and remanding the Resolution Plan back to the CoC:

The Appellant sought to set aside the Impugned Order dated 04.01.2024 and remand the Resolution Plan back to the CoC for fresh consideration. The Tribunal found no merit in the Appellant's submissions, stating that the Appellant had not brought on record the Information Memorandum or any evidence to support its claims. The Tribunal concluded that the Appellant's arguments were baseless and upheld the approval of the Resolution Plan by the CoC.

Conclusion:

The Tribunal rejected the Appellant's application, finding no substance in the arguments presented. The Impugned Order dated 04.01.2024 was upheld, and the Resolution Plan approved by the CoC was not remanded for fresh consideration. The application (IA No.5691 of 2024) was dismissed.

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