2026 (2) TMI 440 - AT - IBC

Approval of resolution plan and revival of lease affirmed; Committee commercial wisdom upheld and appeal dismissed

Approval of a resolution plan under insolvency law was maintained on merits: the adjudicating authority found the Committee of Creditors' commercial ... Approval of resolution plan in accordance with Section 30(2) of the IBC - binding effect of Committee of Creditors' commercial wisdom - duty of the Resolution Professional to protect assets and share information with the Successful Resolution Applicant - effect of setting aside termination of lease and revival of lease - challenge to resolution plan approval on alleged irregularities by the Resolution Professional - petition for post approval directions against the Resolution Professional and third parties supporting implementation of the plan - HELD THAT:- The termination notice issued by GIDC terminating the lease deed has been set aside and the lease is revived and the corporate debtor still continues to hold the lease. I.A. 159/2020 was revived by order dated 21.03.2025 for fresh consideration and accountment to the order dated 21.03.2025 parties were heard on I.A. No. 159/2020 and by the impugned order I.A. No. 159/2020 has been allowed and resolution plan approved. The observations made by the adjudicating authority as noticed indicate that all facts and circumstances of the present case has been noticed by the adjudicating authority reasons due to which the delay was caused due to repeated litigation has also been noticed. SRA who has submitted the plan whose plan has been approved is also fully bound by the plan and cannot be allowed to resile from the plan on any reason. The objections and submissions made by the SRA with respect to termination notice issued by GIDC having already taken care by the RP, and this Tribunal having already set aside the termination notice, the lease in favour of the corporate debtor survives and continues. The prayers made by the appellant in I.A. 717/2025 that GIDC should give undertaking that they shall not terminate the lease could not be allowed by the adjudicating authority. Alleged irregularity by the RP in conduct of CIRP also does not give any reason to interfere with the order approving the resolution plan. The submission of appellant that approved resolution plan has been altered is not substantiated. We do not find any ground at the instance of the appellant to interfere with the order allowing the I.A. 159/2020. No ground has been made out to interfere with the impugned order. The appeal is dismissed. Issues: (i) Whether the adjudicating authority was vitiated in approving the resolution plan (I.A. No.159/2020) and in rejecting the applicant's I.A. No.717/2025 seeking directions against the Resolution Professional and protections regarding the lease, such as to warrant interference by this Tribunal.Analysis: The appeal challenges the approval of the resolution plan on grounds including alleged non-disclosure/withholding of pleadings by the Resolution Professional, denial of inspection, unilateral alteration of the plan, failure to file Form-H and uncertainty regarding the status of the corporate debtor's lease granted by GIDC. The adjudicating authority and this Tribunal's earlier order set aside GIDC's termination of the lease and revived I.A. No.159/2020; the CoC had approved the plan with a clear voting majority and the plan complied with Section 30(2) of the Insolvency and Bankruptcy Code, 2016. The adjudicating authority recorded that the SRA was aware of the lease and had conducted due diligence; safeguards required under the information memorandum and plan implementation (including no-dues obligations regarding GIDC) fall on the RP and CoC. Repeated litigation accounted for delay and does not provide a ground to permit the SRA to resile from a plan duly approved by the CoC. Alleged procedural irregularities by the RP (inspection denial, non-sharing of pleadings, failure to file Form-H) were considered by the adjudicating authority and found insufficient to upset plan approval; the reliefs sought in I.A. No.717/2025 (including directions to IBBI and undertaking from GIDC) were not shown to be necessary to protect the implementability of the plan given the revival of the lease and the adjudicating authority's findings.Conclusion: The adjudicating authority's approval of I.A. No.159/2020 and rejection of I.A. No.717/2025 do not warrant interference; the appeal is dismissed and the decision is in favour of the Respondent.