Insolvency resolution plan clauses upheld as consistent with development rights, ownership structure and eligibility requirements.

In an insolvency resolution plan involving a development arrangement, the plan clauses were read consistently with the memorandum of understanding, joint development agreement and prior recognition of development rights, so they did not divest the landowner's ownership or create any independent land right in the resolution applicant. The approved plan also did not transfer title in the 10.19 acres of land, but operated only to implement the existing development structure. The repayment schedule contained defined timelines and no exit route for the successful resolution applicant, so the plan was not treated as contingent or incapable of approval. On the record, audited financial statements and the resolution professional's affidavit supported satisfaction of the eligibility criteria.

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Issues: (i) Whether clauses 5(c), 5(h), 5(i), 5(j) and 5(l) of the resolution plan took away the Energy's ownership rights or contravened the memorandum of understanding and joint development agreement; (ii) whether the approved resolution plan took away the Energy's ownership in the 10.19 acres of land; (iii) whether the resolution plan was contingent and conditional so as to be incapable of approval; (iv) whether the successful resolution applicant satisfied the eligibility criteria.

Issue (i): Whether clauses 5(c), 5(h), 5(i), 5(j) and 5(l) of the resolution plan took away the Energy's ownership rights or contravened the memorandum of understanding and joint development agreement.

Analysis: The clauses in the resolution plan were read in the light of the memorandum of understanding, the joint development agreement and the earlier adjudication that recognised development rights in favour of the corporate debtor. Clause 5(c) reflected the agreed mechanism for refund and appropriation of security deposit under the joint development agreement and did not accelerate repayment merely by reason of approval of the plan. Clause 5(h) was consistent with the existing contractual permission to create project finance security. Clause 5(i) only substituted the designated power of attorney holders in aid of implementation of the plan and did not create any independent right in the land. Clause 5(j) continued the agreed shareholding and directorship arrangements. Clause 5(l) also operated within the framework of the development arrangement and did not alter ownership of the land.

Conclusion: The clauses neither took away the Energy's ownership rights nor contravened the memorandum of understanding or the joint development agreement.

Issue (ii): Whether the approved resolution plan took away the Energy's ownership in the 10.19 acres of land.

Analysis: The earlier binding determination had held that the corporate debtor possessed development rights constituting property and assets under the insolvency code, while the land owner continued to remain the owner of the land. The approved plan proceeded on that basis and did not transfer title to the corporate debtor or the successful resolution applicant. The plan regulated implementation of the existing development arrangement and not divestment of ownership.

Conclusion: The Energy's ownership in the land was not taken away under the approved resolution plan.

Issue (iii): Whether the resolution plan was contingent and conditional so as to be incapable of approval.

Analysis: The repayment and implementation schedule in the plan contained defined timelines and did not provide any exit route for the successful resolution applicant. The contingencies referred to by the appellant did not make the plan uncertain in the legal sense or render it contrary to the insolvency regulations. The plan remained capable of implementation in accordance with its terms.

Conclusion: The resolution plan was not held to be a contingent or conditional plan barring approval.

Issue (iv): Whether the successful resolution applicant satisfied the eligibility criteria.

Analysis: The record contained audited financial statements and the resolution professional's affidavit supporting the financial worth and deployed funds of the successful resolution applicant. On that material, the eligibility threshold prescribed in the invitation process stood satisfied.

Conclusion: The successful resolution applicant fulfilled the eligibility criteria.

Final Conclusion: The challenge to the rejection of the appellant's objection failed, and the approved resolution plan was sustained.

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