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2020 (1) TMI 277
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....ited' (Appellant) is one of the 'Resolution Applicants', whose 'Resolution Plan' was not voted in its favour by the 'Committee of Creditors'. The 'Committee of Creditors' by majority vote of 73.14% approved the 'Resolution Plan' submitted by 3rd Respondent- 'Royale Partners Investment Fund Limited'. The Appellant preferred Miscellaneous Application challenging the decision of the 'Committee of Creditors' which has been rejected by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai. 2. Learned counsel for the Appellant submitted that approval of plan is in contravention of the mandatory requirement under the proviso to Section 31(4) of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short), as amended, requiring 'Resolution Applicants' to obtain approval of the Competition Commission of India prior to approval by the 'Committee of Creditors'. 3. According to Appellant, the 'Committee of Creditors' without appreciating the fact that the Appellant's 'Resolution Plan' is ex facie better 'Resolution Plan' and serves the twin objects of the 'I&B Code' has rejected the plan. 4. It was further submitted that the action of the 'Committee of Cr....
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.... now to be determined is whether any challenge can be made at various stages of the corporate insolvency resolution process. Suppose a resolution plan is turned down at the threshold by a Resolution Professional under Section 30(2). At this stage is it open to the concerned resolution applicant to challenge the Resolution Professional's rejection? It is settled law that a statute is designed to be workable, and the interpretation thereof should be designed to make it so workable........." 76. Given the timeline referred to above, and given the fact that a resolution applicant has no vested right that his resolution plan be considered, it is clear that no challenge can be preferred to the Adjudicating Authority at this stage. A writ petition under Article 226 filed before a High Court would also be turned down on the ground that no right, much less a fundamental right, is affected at this stage. This is also made clear by the first proviso to Section 30(4), whereby a Resolution Professional may only invite fresh resolution plans if no other resolution plan has passed muster. xxx xxx xxx 79. Take the next stage under Section 30. A Resolution Professional has pres....
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....an' and approve another resolution plan which is under consideration of the Adjudicating Authority. 11. Section 5 of the Competition Act, 2002 is limited to the enterprises and the matter of merger, amalgamation and acquisition, if it comes within threshold of value of assets, as mentioned therein, which reads as follows: "5. Combination.─ The acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises and persons or enterprises, if- (a) any acquisition where- (i) the parties to the acquisition, being the acquirer and the enterprise, whose control, shares, voting rights or assets have been acquired or are being acquired jointly have,- (A) either, in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees three thousand crores; or (B) [in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars, including at least rupees five hundred crores in India, or turnover more than fifteen hundred million US dollars, including at least rupees fifteen hun....
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.... (A) either in India, the assets of the value of more than rupees one thou sand crores or turnover more than rupees three thousand crores; or (B) [in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars, including at least rupees five hundred crores in India, or turnover more than fifteen hundred million US dollars, including at least rupees fifteen hundred crores in India; or] (ii) the group, to which the enterprise remaining after the merger or the enterprise created as a result of the amalgamation, would belong after the merger or the amalgamation, as the case may be, have or would have,- (A) either in India, the assets of the value of more than rupees four-thou sand crores or turnover more than rupees twelve thousand crores; or (B) [in India or outside India, in aggregate, the assets of the value of more than two billion US dollars, including at least rupees five hundred crores in India, or turnover more than six billion US dollars, including at least rupees Fifteen Hundred Crores in India Explanation.- For the purposes of this section,- (a) "control" includes controlling....
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.... under Section 54, as notified, on 27th March, 2017. 15. We have noticed and hold that proviso to sub-section (4) of Section 31 of the 'I&B Code' which relates to obtaining the approval from the 'Competition Commission of India' under the Competition Act, 2002 prior to the approval of such 'Resolution Plan' by the 'Committee of Creditors', is directory and not mandatory. It is always open to the 'Committee of Creditors', which looks into viability, feasibility and commercial aspect of a 'Resolution Plan' to approve the 'Resolution Plan' subject to such approval by Commission, which may be obtained prior to approval of the plan by the Adjudicating Authority under Section 31 of the 'I&B Code'. In present matter already approval of the Competition Commission of India has been taken to the 'Resolution Plan'. 16. For the reasons aforesaid and in view of the decision of the Hon'ble Supreme Court, we dismiss the appeal being not maintainable. The Appellant has no vested fundamental right to challenge the plan approved by the 'Committee of Creditors'. In absence of any merit, the appeal is dismissed. No costs. ============= Document 1 MINISTRY OF CORPORATE AFFAIRS NOTIFICA....