TaxTMI 
TaxTMI 
2018 (5) TMI 78
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...., Advocate ORDER M.M.KUMAR, PRESIDENT - 1. This is an application filed by Liberty House Group Pte. Limited (for brevity 'Liberty House') under section 60(5)(c) of the IBC, 2016 with a prayer that the decision of the Committee of Creditors (for brevity 'CoC') dated 22.02.2018 be declared illegal and set aside. The Committee of Creditors has refused to entertain the resolution plan submitted by the applicant on 20.02.2018 on the ground that it was delayed. The Liberty House has placed on record a copy of the impugned letter dated 22.02.2018 (diary No. 1024 dated 23.02.2018) after filing of the application. An additional affidavit dated 01.03.2018 placing on record copies of the affidavits, emails, copies of documents required by Resolution Professional (for brevity 'RP') and confidentiality undertaking sent to the RP were placed on record. 2. In response to notice of motion having been issued reply by RP has been filed on 05.03.2018 (diary number 1178). A separate reply has been filed by Tata Steel Limited (for brevity TSL') on 05.03.2018 (diary No. 1168). RP had also filed a Caveat application on 22.02.2018 (diary No.983). Another separate reply has been filed on behalf....
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....ution plan applicant-TSL submitted its EOI to participate in the resolution process of BSPL within the time prescribed in the EOI. It is worthwhile to note that any potential Resolution applicant who was desirous of submitting a resolution plan was required to provide relevant documents to establish that it satisfied the qualification requirements on or before 06.10.2017. 5. On 30.10.2017 Information Memorandum as required u/s 29 of the Code was prepared by RP which was supposed to contain all requirements concerning documents and information needed to be supplied to RP by a Resolution applicant to facilitate submission of proposals/resolution applications. The liquidation value of the assets of BPSL as per Regulation 36 was determined at Rs. 9500/- crores (approx). 6. The applicant 'Liberty House' sent its formal EOI dated 12.11.2017 alongwith email dated 13.11.2017. In the email the applicant 'Liberty House' has stated that it is a part of Gupta family group alliance and it would like to participate in the CIR process of BPSL in accordance with the provision of the Code; and that the formal expression of interest was forwarded with a request to RP to place it before the CoC....
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....g UK and Australian Steel Industry. 9. As has been mentioned in the preceding paras the Liberty House sent its EOI on 12.11.2017 along with the email dated 13.11.2017 (annexure-A4 colly). A copy of the qualification criteria has been placed on record (annexure-A5). A copy of an audited financial statement of the applicant for the year ended 31.3.2017 (annexure -A6). 10. The RP vide email dated 18.11.2017 replied to the email of the Liberty House and called upon the applicant to submit documents including confidentiality undertaking, Memorandum of Association, Article of Association, Incorporation documents etc. On 20.11.2017 RP expressed his thanks to the Liberty House for submitting its EOI and asked for further information and formalities for issuance of RPF and grant of access to documents. He offered to schedule site visit confirming thereby that the Liberty House was one of the prospective resolution applicant. A copy of email dated 18.11.2017 sent by RP is on record (annexure -7) and email dated 20.11.2017 is also on record (annexure -8). 11. It is claimed by RP and CoC that the Liberty House was aware about the deadline for submissions of a resolution plan which was....
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....e representative of the Liberty House called the RP on phone he was told that COC had decided not to open the Liberty House's resolution plan because it was submitted after the due date and in that regard written communication was to follow. 13. In support of the application the Liberty House has raised following grounds:- a. The applicant is a renowned global company, which is evident from its financial credentials and backgrounds as well as the background of the GFG Alliance. The applicant craves leave to refer to and rely on the foregoing paragraphs where details of its networth, turnover and other business expertise are set out. The GFG Alliance of which the applicant is a part, has a proven track record of developing the Steel Industry and acquiring and turning around businesses. b. The applicant meets the qualifying criteria furnished to it by the RP and that it is very well placed to act as the resolution applicant and participate in the insolvency resolution process for the BPSL. The applicant has submitted a highly competitive resolution plan and is reasonably sure that if its plan is accorded due consideration the plan would succeed in as much as the ....
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....the submissions made in the foregoing paragraphs. f. Due consideration of the applicant's resolution plan by the CoC would only aid and benefit the insolvency resolution process of the corporate debtor/respondent which is as per the objective of the Code. No prejudice whatsoever would be caused to any party. g. The applicant firmly believes that it has covered all aspects mandated by law in its resolution plan and if on consideration by the CoC any further information is required to be added and/or the plan itself is required to be updated, the applicant undertakes to do so promptly. h. Whilst it was in the midst of putting finishing touches to its resolution plan, the applicant came to know that the deadline for submission of resolution plan, which had been extended from time to time, stipulated as 08.02.2018. Immediately on finding this out, on 13.02.2018, the applicant wrote a letter to the RP categorically intimating that it was in the process of submitting a viable and competitive resolution plan for the corporate debtor/respondent and that it is in a position to submit a resolution plan which the CoC would consider very viable. The applicant further....
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....r BPSL may not be permitted to be finalized without considering its own resolution plan. It has also pleaded that 270 days of CIRP is to expire only on 22.4.2018 15. After filing of the application Liberty House has also filed a copy of the letter dated 20.02.2018 handed to RP. This was done on 23.02.2018. Thereafter again additional documents were filed on 01.03.2018 which are copies of affidavit required by RP (annexurel2 and annexure-14), emails sent in December 2017 (Annexure-13) and confidentiality undertaking (Annexure-15), Reply-CoC 16. In the reply filed by COC it is claimed that COC has taken every precaution to ensure a fair, transparent and open process with the object of maximizing the value and allow for approval of a successful resolution plan within a specified timeline fixed under the Code. Every opportunity has been given to all the interested parties to put forward their interest and claim. 17. Referring to the changes, the COC has averred that some changes were brought about by IBBI with respect to the eligibility of the resolution applicants by amending the Regulation which were incorporated appropriately in the process documents and thereby it ensured ....
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....ion the RP had yet again sent an email to the Liberty House on 12.12.2017 for furnishing an affidavit in compliance of section 29A of the Code along with requisite documents because new eligibility criteria for resolution applicants has been provided by way of amendment. This has never been complied with. According to CoC this fact has been concealed from the adjudicating authority-NCLT in these proceedings. A copy of email dated 02.12.2017 has been placed on record. (Annexure A). It has also concealed the fact of another email sent by RP on 08.12.2017. The time for submission of affidavit under section 29A and the required documents was extended for further period of 10 days and it was to end on 18.12.2018. A copy of the email is placed on record (annexure-B). No affidavit till date has been submitted by the Liberty House. It is claimed that on account of the aforesaid non-compliances the Liberty House is not eligible to submit the resolution plan, 20. The process document giving details of the terms and conditions and timelines for submission of resolution plan by the resolution applicant was issued on 14.12.2017 and it was made available to only those who were qualified resol....
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.... time by resolution applicant were opened on 08.02.2018 and the financial proposal was shared on 14.02.2018 with the COC. The averment made by the Liberty House in its application have been controverted. It is sought to be projected that the Liberty House has been closely watching the development of the CIRP in respect of the BPSL and has deliberately delayed it. It is also denied that applicant has a strong prima facie case and it has balance of convenience in its favour. Reply py RP 27. A separate reply by RP has been filed which is similar to the one filed by CoC. It has been reiterated that application of the Liberty House is not maintainable for the following reasons:- (a) Fulfilment of the prescribed qualification criteria is a sine qua non for consideration of resolution plan. (b) The consideration of the resolution plan of the applicant received beyond the prescribed deadline would be a prejudicial and arbitrary act on the part of the resolution professional/Committee of Creditors. (c) No judicial intervention required as the respondent and the Committee of Creditors have followed the due process of law. (d) The applicant has not di....
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....ely manner in accordance with the IBC and the CTRP Regulation as is evident from the following; (i) Submitted its EOI on 29.9.2018, which was before the last date for submission being 06.10.2018; the applicant failed to do so. (ii) Submitted the confidentiality undertaking as well as the non refundable payment of INR 10,00,000/- for access to the virtual data room when called upon to do so. It appears that the applicant has neither submitted its confidentiality undertaking nor provided the non-refundable payment of INR 10,00,000/- for access to the virtual data room, as required by the resolution professional, despite several reminders throughout the CIRP. b. The applicant's bid has come after the last date for submission which was 8.2.2018, as late as on 20.2.2018; and c. The sealed Resolution Plan were opened on 8.2.2018 as per the stipulation in the second addendum dated 26.01.2018. The applicant has, with a view to gaining an unfair advantage over other bidders (including TSL), submitted its bid after the other bids have been opened and material information regarding such other bids had already been reported in the press. 31. The whole CIR....
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....nts made in the application and additional affidavit. It is clarified that the TSL in its reply has taken the stand that the bids were opened on 8.2.2018 and the amounts were disclosed which is incorrect and misleading. Referring to the reply filed by CoC & RP it has been mentioned that financial parameters with respect to resolution plan were allegedly disclosed to CoC only on 14.2.2018 and the Liberty House was never aware of the amounts of two financial bids and that the reliance of TSL on various media reports is wholly misplaced. It has been submitted that conflicting and variant reports with regard to the bids amount offered by TSL have been mentioned in the press report ranging from Rs. 11,500/- crores to Rs. 24,500/- crores. Therefore, it is sought to be emphasised that the press reports do not project the correct bidding amount of the two resolution applicants and therefore the liberty house could not have taken any benefit from those process press reports. The Liberty House would not be able to submit its resolution plan based on the report in the media. The other resolution plans are also at consideration stage and no vested right has come into existence merely by submis....
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....e applicant as a qualified resolution applicant. The period of 270 days is to expire on 22.4.2018. The time was no longer considered as an essence of the process because the CoC and RP have been changing the timeline repeatedly. No prejudice is likely to be caused by considering the resolution plan of the Liberty House which was submitted well before the meeting of CoC on 22.2.2018. Rejoinder to the reply of CoC & RP 36. Rejoinder has also been filed to the reply filed by COC in the preliminary submissions. The averment made in the application by the Liberty House have been reiterated and it is controverted that the Liberty House is ineligible and a non serious participant. It is claimed that non opening of resolution plan of the Liberty House is prejudicial not only to itself but to all other stakeholders as it would defeat the purpose of IBC which is to maximize the value of asset. It is also claimed that Liberty House is a 'turnaround specialist' and world renowned player in steel industry. It has globally acquired fame for turning out distress industries while protecting employees and their jobs; and also by creating new jobs. The details of achievement have been listed i....
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.... before submitting the resolution plan. The Liberty House has claimed that based on its enquiry, research and information available in public domain, it had formulated and submitted a detailed resolution plan which is in full compliance of requirement of the Code. Therefore, non access to VDR by the applicant could not constitute a basis for non consideration of its resolution plan as no prejudice is caused to CoC or RP. Similar arguments have been advanced with regard to site inspection. It has also been asserted that process document was never ever treated by RP and /or CoC as sacrosanct, mandatory, or binding documents nor the time lines laid down therein has been adhered to. The RP has admitted that the process document was introduced only on 14.12.2017 which is three months after the publication of notice inviting EOI and about four weeks before the resolution plan were to be submitted. Other facts have also been noted in the preceding paras and it would not warrant to repeat the same. 40. We have heard learned counsel for the parties at a considerable length. On behalf of the Liberty House Mr. A.S. Chandhiok, Mr. Anand Chibber and Mr. K. Datta, learned senior counsel have ....
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....tly argued that Liberty House has complied with the timeline provided under the Code and Regulation. At the time when advertisement inviting EOI was issued on 21.09.2017 an express reference was made to Regulation 39(1) of the CIRP Regulations 2016. According to EOI only two requirements were to be filled namely (i) that a public invitation for resolution applicant had to be made and (ii) an endeavour was to be made for submitting a resolution plan thirty days before expiry of the maximum period permitted under section 12 of the Code. The Regulation 39 was amended by the IBBI on 3 L 12.2017 w.e.f. 01.01.2018. If the provision of new regulation were to be applied then a fresh public notice was required to be issued to highlight the change in section 25(2)(h) and Regulation 39(1). According to amendments made in section 25(2)(h) the RP was required to invite prospective resolution plan applicants who fulfilled such criteria as may be laid down by him with the approval of CoC having regard to the complexity and scale of operations of the business of the corporate debtor. It further provides that such other conditions as may be specified by the IBBI were also required to be fulfilled. ....
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....ed before the court later except the one given in the order itself because such reasons could easily be interpolated in the record after lacuna is disclosed. (v) The fair value has not been determined and the amended regulation 2(i) w.e.f 06.02.2018 has been violated. The fair value was required to be determined by appointment of two registered valuers as per section 35 which is amended on 06.02.2018. It cannot be at the discretion of the RP/CoC to apply one amendment and refuse to apply other. 41. On behalf of RP Mr. Kathpalia learned senior counsel has made following submissions:- (a) The applicant has failed to disclose material facts and documents and on that score alone the application is liable to be dismissed. The suppression of material facts and documents is intentional. According to the learned counsel the applicant has attempted to project its actions as act of good faith whereas it has miserably failed to perform its obligation under EOI. Substantiating his arguments learned counsel has submitted that Liberty House had failed to disclose the factum of submitting the EOI beyond the date prescribed in the advertisement; it has concealed its own mail d....
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....m Chartered Accountant/Auditor certifying that applicant meets the qualification criteria. The EOI was submitted by Liberty House much beyond the due date on 13.11.2017 and yet it failed to furnish qualification documents including the mandatory Chartered Accountant Certificate certifying the net worth. As the entire process was at nascent stage no prejudice would have been caused subject to the applicant submitting all eligible documents prescribed in the format dated 21.9.2017 which he failed to submit. The RP repeatedly sought the aforesaid documents and also requested the necessary confidentiality undertaking in accordance with section 29A of the code along with a deposit of Rs. 10 lacs to enable access to VDR containing all the documents with respect to Corporate Debtors necessary for resolution applicant to prepare his comprehensive resolution plan. For a period of 3 months from November to February 2018 no steps were taken by the Liberty House. It is only after crossing the barrier of qualification criteria that stage A of the process is completed and those who qualify were permitted to be promoted to the next stage B. A detailed process and timeline for submissions of resol....
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....sel also submitted that acceptance of the resolution plan of the Liberty House beyond prescribed deadline would result into a prejudicial and arbitrary act on the part of the RP/CoC. According to the advertisement a proposed document dated 14.12.2017 was provided to all the potential resolution applicants who qualified the qualification criteria. (g) Mr. Kathpalia however submitted that those who fulfilled the qualification criteria were provided the 'process document' dated 14.12.2017. It was clearly mentioned in the process document that resolution plan were to be submitted on or before 10.1.2018. This date was later extended twice for those who fulfilled the qualification criteria. The first addendum added with the process document was issued on 3.1.2018 and second addendum was issued on 26.1.2018 which was on account of amendments to the Code and CIRP Regulations. In that regard reference has been made to the Insolvency and Bankruptcy Amendment Ordinance, 2017 which came into force w.e.f. 23.11.2017 and Insolvency and Bankruptcy (Amendment) Act, 2018 w.e.f. 19.1.2018 along with the various corresponding amendments in CIR Regulations. (h) Mr. Kathpalia then sub....
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....stodia legis of the asset of a company under liquidation and the custody of the assets has now been shifted to the CoC and RP. The Code has ensured adequacy of the price by creating an eco-system wherein subsequent to a default in repayment of a debt the creditors are put in control of the company with the assistance of specialised Insolvency Professionals and are guided by a specialised regulator who are familiar with the realities of commercial world. It has therefore been submitted that the satisfaction of CoC regarding adequacy of price is of paramount importance. In that regard reference has been placed on Sections 18, 25 and 28 of the Code. Referring to the judgement in the case of Divya Jyoti Manufacturing Put Ltd. (Supra)it has been argued that the aforesaid view has now been considerably water down by a recent judgment of Hon'ble the Supreme Court rendered in the case of Vedika Procon Private Limited v. Balleshwar Greens Put. Ltd. AIR 2015 SC 3103and Valji Khimji and Company v. Official Liquidator of Hindustan Wipro Products (Gujarat) Limited [2008] 9 SSC 299. 42. On behalf of CoC Mr. Ramji Srinivasan learned Senior Counsel has made following submissions:- (i) ....
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....plication. On 3.1.2018 the submission date was revised to 10.1.2018 and then to 21.1.2018 (page 57-58 of CoC reply), Reasons for extension is that CoC in its meeting held on 26.12.2017 accorded approval for more time for CIRP Process by 90 days and the period was extended for submitting resolution plan from January 10 to January 29, 2018. On 26.1.2018 second addendum to the process document was issued and the last date for submission of resolution plan was revised to 8.2.2018. The reason is one of the qualified resolution applicant - Tata Steel requested that on account of national holiday the date may be changed. Mr. Srinivasan also submitted that he adopt all the submission made by Mr. Kathpalia who has appeared on behalf of the RP. 43. Dr. A.M. Singhvi, learned senior counsel appearing for the TSL has prefaced his arguments by giving few snippets. According to Dr. Singhvi on principle any individual who takes liberty with law and does not submit to its mandate should not be rewarded by accepting a challenge on his behalf. A tilt in favour of such a mischief-monger would marginalized the bid system which have developed around Article 14 of the Constitution under the Tender law....
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....ated and it would be violation of the statutory process contemplated by the aforesaid provisions if the application filed by the Liberty House is ordered to be considered. According to Dr. Singhvi the stand taken by the applicant is self-contradictory in a number of ways for example with regard to the time limits and the knowledge about the last date. 45. On fact learned counsel has argued that the startling facts can be divided into three parts namely before 'Expression of Interest' was floated, second before the bid date and last after the bid date. The Resolution Professional floated expression of interest where the potential Resolution Applicant were required to submit the relevant documents concerning qualifications on or before 06.10.2017 which was the deadline fixed. The Liberty House-applicant admittedly failed to adhere to the last date and filed his expression of interest on 13.11.2017 whereas TSL submitted its expression of Interest before the closing date. On the examination of the expression of interest submitted the eligibility was to be determined and in terms of the public notice the time line was to be communicated to the qualified potential Resolution Applicant....
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....rt rendered in the case of Modi Corp Limited v. Union of India & Another, 2002 (62) DRJ 542 (para 5, 20, 21 & 26) where as a part of disinvestment process of VSNL the expression of interest was floated and the Modi Corp Ltd. with its consortium members wanted to submit expression of interest after the time fixed was over which failed. Emphasizing the object of the Insolvency and Bankruptcy Code it has been pointed out that speed is the essence and maximizing the value of the assets of the company could be achieved only in a time bound manner. In that regard reliance has been placed on the observations made by this Bench in an order dated 15.02.2018 passed in the case of Clutch Auto Limited, (IB) No. 15(PB)/2017, Dr. Singhvi has argued that paradigm shift between the earlier regime and the post Insolvency and Bankruptcy Code has been noted to be the time line which is associated necessarily with the value of the assets which deplete very fast. Based on the observations made in the aforesaid order Dr. Singhvi has highlighted that acceptance of commercial decisions of Committee of Creditors ought to be a rule and interference with it should be an exception. Likewise, reliance has been....
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.... liable to be rejected. Likewise, there is a radical amendment brought in Regulation 39 w.e.f. 07.11.2017 which provide that only those resolution plans could be approved which meet the requirement of Regulation 39 therefore, the time limit fixed by the Resolution Professional in consultation with the Committee of Creditors assumes character of statutory requirement. Any prospective bidder violating the time line would not be eligible. Our attention has also been invited to the provisions of Section 29A where list of persons not eligible to submit resolution plan have been detailed. Therefore, the time line finalized by the Resolution Professional in consultation with the Committee of Creditors was required to be adhered to. Dr. Singhvi has then drawn our attention to para 27 of the judgment rendered in the case of Sorath Builders v. Shreejikrupa Buildcon Limited and Another, [2009] 11 SCC 9 and has argued that their Lordships of Hon'be the Supreme Court upheld the time schedule attached to the notice inviting tenders and did not permit a late comer to participate in the tendering process. Likewise, reliance has been placed on para 66 of the judgment rendered in the case of B.S.N. ....
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.... the Code. An Interim Resolution Professional is required to perform his/her duties under Section 17} 18 & 20 of the Code. There are various other obligations cast on the IRP including the duty of constituting a CoC as per the requirement of S. 21 r/w S. 18 (1) C of the Code, Its first meeting is to be held within seven days of its constitution (S.22). An IRP may then be appointed as RP by the CoC if not less than 75% of the voting share of Financial Creditor resolve to appoint him. Thereafter he is to conduct CIR Process by managing the affairs and operations of the Corporate Debtor (S. 23) and conduct meetings of the CoC as per the procedure postulated in S. 24 of the Code. Section 25 (1) of the Code has listed various duties of the Resolution Professional. The RP is under a sacred obligation of preserving and protecting the assets of the Corporate Debtor including its business operation. S. 25 (2) has enumerated numerous other duties cast on the RP. 52. Before 23.11.2017 S. 25 (2) (h) of the Code stood differently. In term it meant that for the purposes of preserving and protecting assets of the Corporate Debtor the RP was to 'undertake the following actions, namely .............
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....at are in force now or which may come into force subsequently, for resolution plan and all matters under, in pursuant to, in furtherance of or in relation to, this invitation. The consideration, evaluation and approval of resolution plan submitted by RP to the committee of creditors is within the powers of committee of creditors under the provisions of the IBC and CIRP Regulations. The committee may specify evaluation criteria separately for evaluation of the resolution plans. The detailed process and timeline for submission of resolution plans shall be separately communicated to the Potential Applicant who meet the qualification requirements as mentioned above. For clarifications, if any, please contact: [email protected] Please note that RP reserves the right to amend or modify the Invitation without assigning any reason and without incurring any liability of whatsoever nature. Any amendment or modification shall be posted on the website of the corporate debtor www.bhushanpowersteel.com. Potential Resolution Applicants are requested to regularly visit the aforesaid website for regular updates. Sd/- Mahender Kumar Khandelwal Resolution Professional - Bhushan Power ....
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....owing actions, namely:- (a) .................. (b) .................. (c) .................. (d) .................. (e) .................. (f) ................. (h) invite prospective lenders, investors, and any other persons to put forward resolution plans;" Regulation 38 Mandatory contents of the resolution plan* 38. (1) A resolution plan shall identify specific sources of funds that will be used to pay the - (a) insolvency resolution process costs and provide that the insolvency resolution process costs will be paid in priority to any other creditor; (b) liquidation value due to operational creditors and provide for such payment in priority to any financial creditor which shall in any event be made before the expiry of thirty days after the approval of a resolution plan by the Adjudicating Authority; and (c) liquidation value due to dissenting financial creditors and provide that such payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan. (2) A resolution plan shall provide: (a) the t....
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....ns of the business of the Corporate Debtor and such other conditions as may be specified by the IBBI. The amended provisions of Section 25 (2) (h) would read as under:- Section 25 (2) (h) "Duties of Resolution professional. 25. (1) It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor, (2) For the purposes of sub-section (1), the resolution professional shall undertake the following actions, namely:- (a) .................. (b) .................. (c) .................. (d) .................. (e) .................. (f) .................. (h) invite prospective resolution applicants, who fulfil such criteria as may be laid down by him with the approval of committee of creditors, having regard to the complexity and scale of operations of the business of the corporate debtor and such other conditions as may be specified by the Board, to submit a resolution plan or plans. 56. It is significant to notice that after issuance of public notice in print media on 21.09.....
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....bmitted within the time line prescribed under Regulation 39 (1) of the CIRP Regulations. The deadline for submitting the relevant qualification document to satisfy the qualification requirement is on or before 06.10.2017. Such Potential Resolution Applicant were also required to submit a duly stamped confidentiality undertaking as per the requirement of the Code and the CIRP Regulations which was stated to be a condition for receiving the information memorandum and other relevant information concerning the Corporate Debtor. It also makes clear that the RP was to place before the Committee of Creditors for its approval such resolution plans which conform to the conditions set out under Section 30 (2) of the Code read with Section 38 of the CIRP Regulations. It also clarifies that consideration, evaluation and approval of resolution plan was to be submitted by RP to the Committee of Creditors and that it was within the power of the Committee of Creditors under the Code and CIRP Regulations. It provides further that the CoC was to specify an evaluation criteria separately for evaluation of the resolution plans. It is significant to note that the public notice clearly specifies that (t....
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....n the absence of any public notice contrary to the one issue on 21.09.2017 no other time line could be fixed and the refusal of CoC to open the 'Resolution Plan' and its rejection on the ground of delay was based on the process which was internal affairs. 64. The resolution plan in the present case was submitted on 20.02.2018. The period of 180 days was extended to 270 days on an application filed by the Resolution Professional under Section 12 (2) vide order dated 22.12.2017. The period of 270 days admittedly would be expiring on 22.04,2018. If we apply the aforesaid yardstick then the decision of the CoC in its meeting dated 21.02.2018 would not be sustainable. Under item No. 9 discussion took place on the resolution plan submitted by Liberty House and reference was made to an email sent by it to the RP on 13.02.2018. The Resolution Professional also informs the CoC in its meeting dated 21.02.2018 that he received a resolution plan on 20.02.2018 although it was after the expiry of the time line prescribed in the process document, i.e., 1400 hours 1ST on 08.02.2018 (internal process). The Resolution Professional also disclosed to the CoC that the packet is stated to contain a R....
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.... against the resolution applicants who have submitted in accordance with such process if the resolution plan is accepted now. CoC would maintain the transparency and fairness of the process being followed to select the successful resolution applicant in accordance with the Process Document and would proceed with evaluation of only those complaint resolution plans which have been submitted on the Proposal Due Date in accordance with the requirements of the Process Document. Therefore, CoC, in the aforesaid meeting held on February 21, 2018, has decided against opening the Submitted Document and have instructed the Resolution Professional to return the Submitted Documents unopened. In light of the aforesaid, I am hereby returning all the Submitted Documents unopened. Kindly take receipt of the same by personally visiting the office of Bhushan Power & Steel Limited at F-Block, 1st Floor, International Trade Tower, Nehru Place, New Delhi-110019 today i.e. 22nd of February 2018, otherwise the same shall be sent to you by registered post to your abovementioned address." 65. The aforesaid decision of the CoC would stare in the face of the stand taken by th....
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....ts before the Tribunal without treating it as an adversarial litigation. We were amazed when on behalf of RP the stand taken in the pleadings and during the course of argument was that the TSL was to walk away from the CIR process if the Tribunal was to entertain the application of Liberty House. Such a stance by a RP is wholly untenable and there is nothing in the minutes of meeting of the Committee of Creditors to support such a stance. An RP is expected to act as an impartial umpire and is not supposed to have taken a stance which is not true. Even the Committee of Creditors spoke in the same tone which again is not borne out from the minutes of the meeting of the CoC. The majesty of Courts cannot be put to ransom by veiled threat of this nature nor the administration of justice could be thwarted by any such insinuation. 67. There cannot be any quarrel with the propositions put forward by learned senior counsel Mr. Arun Kathpalia, Mr. Ramji Srinivasan and Dr. A.M. Singhvi for RP, CoC and TSL respectively that there should be level playing field for each of the participants. In the present case the level playing field was provided by inviting resolution plan within the period ....
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....the view that the IBC does not permit the division of the process firstly by inviting 'expression of interest' and then by asking to file the resolution plans. If the speed is the essence of the whole process then it must be remembered that one consolidated process is better suited to CIR Process than splitting the process in various parts. In the present case the process which has started on 21.09.2017 could not be concluded by 21.02.2018 on account of unnecessary complications created in conducting the process by inviting expression of interests. It is worthwhile to notice that the fashionable phenomena 'expression of interest' is resorted to in cases where thousands of applicants are expected to participate. In a case where the number is not likely to exceed more than ten then such process seems to be un-necessary. In most of the cases under the IBC the number of resolution applicants are not more than ten. The reasons for such small number are evident. Firstly, most of the time it is a specialized business and the number of such person participating in the CIR process is likely to be limited as the experience has shown so far. Secondly when the magnitude of assets involved is e....
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....esaid view has been followed and applied by a Division Bench of Bombay High Court in the case of Flemingo Duty-Free Shop Put. Ltd. and Mr. Vivek S. Bhatt v. Union of India and Ors., 2008 (4) ALLMR 663. In the present case only seven applicants have come forward. As a matter of fact, no expression of interest was warranted and the vital time spend in this process could have been saved. 72. We are further of the view that the object of the Insolvency and Bankruptcy Code is to reorganize and evolve insolvency resolution of, inter alia, Corporate persons in a time bound manner for maximization of the value of assets of such person. The aforesaid statement of object is evident from para 2 of the long title of the Code which reads as under:- "The objective of the Insolvency and Bankruptcy Code, 2015 is to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the priority of payment of governme....
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....rejudice to the right of the applicant especially when there is still time as the period of 270 days is to expire on 22.04.2018. In any case, the period which is consumed in the litigation would not prima facie be part of the period prescribed for CIRP under the IBC." 75. It has come on record that the period of 270 days for CIR process is to expire on 22.04.2018. The present application by Liberty House was filed on 22.02.2018 and it is being decided on today (23rd April, 2018). The period from 22.02.2018 till date would thus stand excluded from the period of 270 days and the process may now be concluded by 23.06.2018. For the aforesaid view we draw support from the judgment of the Hon Hole National Company Law Appellate Tribunal rendered in the case of Quantum Limited v. Indus Finance Corporation Limited, Company Appeal (AT) (Insolvency) No. 35/2015 dated 20.02.2018. In that case the Mumbai Bench of NCLT had dismissed an application filed by RP under Section 12 of the Code for extension of time beyond 180 days. Learned National Company Law Appellate Tribunal set aside the order of Adjudicating Authority/NCLT and also proceeded to exclude the period of litigation by observing a....