TaxTMI 
TaxTMI 
2019 (3) TMI 1706
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.... under Section 31 of the Insolvency and Bankruptcy Code. The other I.As. are filed by either financial creditors or operational creditors including Government authorities or by other stakeholders. Since all these I.As. arise out of the same CIRP, all the I.As were heard together and are being disposed of by this common order. For the sake of convenience, a list of all the I.As. and Intervention Petitions filed in post admission stage of the main IB Petition Nos.39 & 40 of 2017, can be described well through the following chart: Sl. Case No. Under Section Name of the Parties 1 IA 14 of 2019 in/with CP(IB) 39 of 2017 60(5) IBC Oil & Natural Gas Corporation Ltd. v. Satish Kumar Gupta 2 IA 15 of 2019 in CP(IB) 39 & 40 of 2017 60(5) IBC Arkay Logistics Ltd. v. State Bank of lndia 3 IA 16 of 2019 in IA 468 of 2018 in CP(IB) 39 & 40 of 2017 60(5) IBC State Tax Officer v. Essar Steel India Ltd. 4 IA 52 of 2019 in/with CP(IB) 40 of 2017 60(5) IBC MBTC Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 5 IA 53 of 2019 in/with CP(IB) 40 of 2017 60(5) IBC Bharat Petroleum Corporation Ltd. v. Satish Kumar Gupta (RP of Essar Steel India Ltd.) 6 IA 54 of 2019 in/wi....
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....el India Ltd., v. India Coke & Power (P.) Ltd. 26 IA 434 of 2018 in CP(1B) 39 & 40 of 2017 60(5) IBC The Resolution Professional for Essar Steel India Ltd. v. L & T Infrastructure Finance Co. Ltd. 27 IA 435 of 2018 in/with CP(IB) 39 & 40 of 2017 60(5) IBC Orissa Stevedores Ltd. v. Satish Kumar Gupta 28 IA 437 of 2018 in/with CP(IB) 39 & 40 of 2017 7 IBC Essar Steel Asia Holdings Ltd. v. Satish Kumar Gupta . 29 IA 438 of 2018 in CP(IB) 39 & 40 of 2017 60(5) IBC Gail (India) Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 30 IA 440 of 2018 in/with CP(IB) 39 & 40 of 2017 60(5) IBC Arkay Logistics Ltd. v. State Bank of India 31 IA 441 of 2018 in/with CP (IB) 39 & 40 of 2017 60(5) IBC Essar Bulk Terminal Ltd. v. State Bank of India 32 IA 442 of 2018 in/with CP (IB) 39 of 2017 60(5) IBC Berger Becker Coatings (P.) Ltd. v. Essar Steel India Ltd. 33 IA 443 of 2018 in CP(IB) 40 of 2017 60 IBC Gujarat Energy Transmission Corporation Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 34 IA 444 of 2018 in/with CP(IB) 40 of 2017 60(5) IBC Kamaljeet Singh Ahluwalia . v. State Bank of India . 35 IA 445 of 2018 in/with CP(IB) 40 of 2017 60(5) IBC....
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....P (IB) 39 & 40 of 2017 60(5) IBC COC for Essar Steel India Ltd. Through State Bank of India v. Essar Steel India Ltd. 54 IA 439 of 2018 in CP(IB) 39 & 40 of 2017 60(5) Standard Chartered Bank. v. Satish Kumar Gupta 55 IA 64 of 2019 in CP(IB) 39 & 40 of 2017 60(5) IBC Dilip Oommcn v. State Bank of India 56 IA 430 of 2018 in IA 431 of 2018 in/with CP (IB) 39 & 40 of 2017 60(5) IBC Essar Steel Asia Holdings Ltd. . v. Satish Kumar Gupta 57 Inv. P. 77 of 2018 in CP(IB) 39 & 40 of 2017 7 Arcelormit Lal India (P.) Ltd. (Intervener),Essar Steel Asia Holdings Ltd. v. Satish Kumar Gupta 2. As per material available on record, out of these applications, some of the applications have already been disposed of by this Adjudicating Authority, which are described as under; Sl. No. Case No. Name of Parties U/s. Status Date of disposal 1 IA 397 of 2018 Jalesh Kumar Grover RP of GPI Textiles Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 60(5) Dismissed 08.02.2019 (Withdrawn) 2 IA 430 of 2018 Essar Steel Asia Holdings Ltd.. v. Satish Kumar Gupta 60(5) Disposed of 29.01.2019 3 Inv. P. 77 of 2018 Arcelormittal India (P.) Ltd. (Intervener),Essar Steel Asi....
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....with the main I.A. No.431 of 2018, which are described as under:- Sl. No. Case No. Parties 1 IA 28 of 2018 Dakshin Gujarat Vij. Co. Ltd. v. Essar Steel Ltd. 2 IA 431 of 2018 The Resolution Professional for Essar Steel India Ltd. 3 IA 443 of 2018 Gujarat Energy Transmission Corporation Ltd. v. Satish Kumar Gupta KP of Essar Steel India Ltd. 4 IA 436 of 2018 COC for Essar Steel India Ltd. Through State Bank of India. v. Essar Steel India Ltd. 5 IA 438 of 2018 Gail (India) Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 6 IA442 of 2018 Berger Becker Coatings (P.) Ltd. v. Essar Steel India Ltd. 7 IA 439 of 2018 Standard Chartered Bank. v. Satish Kumar Gupta 8 IA 446 of 2018 Dakshin Gujarat Vij Co. Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 9 IA 325 of 2018 Bharat Petroleum Corporation Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 10 IA 469 of 2018 Indian Oil Corporation Ltd. v. Satish Kumar Gupta (RP) of Essar Steel India Ltd. 11 IA 467 of 2018 Dakshin Gujarat Vij Co. Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 12 IA 470 of 2018 Global Transnational Trading FZE v. Satish kumar Gupta (RP) of Essar Steel In....
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....orporation Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 896,52,00,000 11 IA 444 of 2018 60(5) IBC Kamaljeet Singh Ahluwalia . v.. State Bank of India . 360,39,65,311 12 IA 445 of 2018 60(5) IBC Signode India Ltd. v. State Bank of India . 9,54,83,196 13 IA 446 of 2018 60 IBC Dakshin Gujarat Vij Co. Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 5882,28,00,000 14 IA 447 of 2018 60(5) IBC Timken India Ltd. v. Stale Bank of India 4,42,44,835 15 IA 448 of 2018 60(5) IBC Hind Aluminium Industries Ltd. v. State Bank of India 3,77,36,394 16 IA 467 of 2018 60IBC Dakshin Gujarat Vij Co. Ltd. v. Satish Kumar Gupta RP of Essar Steel India Ltd. 606,49,00,000 17 IA 468 of 2018 60(5) IBC State Tax Officer v. Essar Steel India Ltd. 544,00,00,000 18 IA 469 of 2018 31 r.w 60(5)(c) IBC Indian Oil Corporation Ltd. v. Satish Kumar Gupta (RP) of Essar Steel India Ltd. 3762,58,74,503 19 IA 472 of 2018 GAIL 1204,15,00,000 20 IA 473 of 2018 60(5) IBC Allied Metallurgical Products v. State Bank of India 1,21,73,329 21 IA 481 of 2018 60(5) IBC L&T Infrastructure Finance Co. Ltd. v. Essar Steel India Ltd. Through Its RP Satish K....
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....A 49 IA 437 of 2018 7 IBC Essar Steel Asia Holdings Ltd. v. Satish Kumar Gupta . NA 50 IA 41 of 2018 60 IBC Satish Kumar Gupta, RP v. Union of India . NA 51 IA 470 of 2018 60(5) r.w 37 to 39 IBC Global Transnational Trading FZE v. Satish kumar Gupta (RP) of Essar steel India Ltd. NA 52 IA 434 of 2018 60(5) IBC The Resolution Professional for, Essar Steel India Ltd. v. L&T Infrastructure Finance Co. Ltd. NA 53 IA 471 of 2018 Essar Steel Asia Holding NA 54 IA 16 of 2019 State Tax Officer. v. Essar Steel India Ltd. NA 55 IA 58 of 2019 COC for Essar Steel India Ltd. NA 56 IA 430 of 2018 60(5) IBC Essar Steel Asia Holdings Ltd. v. Satish Kumar Gupta NA 57 Inv. P. 77 of 7 Arcelormillal India (P.) Ltd. (Intervener), Essar Steel Asia Holdings Ltd. v. Satish Kumar Gupta NA I.A. 125 of 2019 in I.A. 482 of 2018 and I.A. 126 of 2019 in I.A 483 of 2018 1. By these applications, the applicants have sought a prayer for setting aside the ex parte order passed against them by this Adjudicating Authority on 14.02.2019 whereby I.As. No. 482 of 2018 and 483 of 2018, of the applicants (viz., Hill View Hire Purchase Ltd. and D.R. Patnai....
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....d to be allowed and I.As. No. 482 & 483/2018 are restored to file for hearing on merits, then it would amount to dilution of the direction of the Hon'ble NCLAT in its latest order dated 28.09.2019, wherein Their Lordships have expected this Tribunal to pronounce order(s) latest by 08.03.2019, while, the present Restoration Applications are filed before this Bench only on 06.03.2019. 5. Considering the above stated peculiar facts and circumstances of the present case, we are of the view that the present I.As., at this belated stage, cannot be entertained by this Adjudicating Authority, in view of the direction given by the Hon'ble NCLAT as well as mandate of the Hon'ble Supreme Court, for conclusion of the hearing in a time bound manner. 6. Notwithstanding the above, learned counsel, Mr. Jaimin Dave, appearing for the applicants of these I.As has taken alternative plea that he is not pressing for fresh hearing in the IAs. 482 of 2018 and 483 of 2018, but only requesting this Tribunal to consider the issue of rejection of applicants claims arbitrarily by the RP and their objection for approval of the proposed Resolution Plan, as their claims does not find place in the c....
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....aforesaid reasons, the present I.As. No. 125 of 2019 in I.As. 482 of 2018 and 126 of 2019 in I.A. 483 of 2018 are liable to be rejected in view of the recent direction issued by the Hon'ble NCLAT, on 28.09.2019, to conclude the hearing and pronounce the order in I.A. 431 of 2018 in a time bound manner. Accordingly, these I.As are rejected with no order as to costs. I.A. No. 472 of 20I8 I.A. 62 of 2019 in IA. No. 431 of 2018 1. By these applications, the applicants, viz., M/s. GAIL (India) Ltd. (GAIL), and the National Thermal Power Corporation Ltd. (NTPC Ltd.)., have sought for a common relief against partly rejection of their respective claims by the Resolution Professional (RP). 2. The applicant, GAIL, in IA 472 of 2018, has stated that it is having claim of Rs. 1204.15 crore against the Corporate Debtor company as per the Gas Sale Agreement (GSA) dated 28.03.2014 and such claim has not been admitted by the RP. Hence, an appropriate direction be issued to the Respondent to admit its entire claim in CIRP proceedings of the present Corporate Debtor company and further direction to the respondent to ensure the continuation of the executed Gas Sale Agreement dated 28.03.2014 u....
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....264/- as per the Tripartite Agreement entered into between the applicant and the corporate debtor company on 09.11.1993. It further sought a direction be issued to the RP and to the CoC to ensure the continuance of the executed Tripartite Agreement and MoU dated 09.11.1993 under the proposed resolution plan otherwise in alternate such resolution plan is liable to be rejected. It also prayed for staying of the proceedings in I.A. No. 431 of 2018. 7. We have duly considered the above stated contentions of these applications. It is an admitted position in the matter that present applicants are operational creditors and having dues of less than 10% (each) of the total debts owed by the corporate debtor company. Therefore, they cannot demand a copy of the resolution plan as a matter of right nor they can have locus to participate in the proceedings of the CoC and to oppose such resolution plan, in view of the recent decision of the Hon'ble Supreme Court in the matter of K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com 139/152 SCL 312. 8. Therefore, their prayer cannot be acceded to. However, their interest as being operational creditors can be adequately be taken care a....
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....ssent, in the light of the decision of the Hon'ble Supreme Court in the matter of K. Sashidhar (supra). 4. Notwithstanding the above, it is now a settled legal position that the Resolution Professional has not been conferred with such power to adjudicate the claim submitted before it. He is required only to collate the information, verify the claims as per the provisions of the I & B Code and to update such information in the list of creditors and, thereafter, place it before the CoC for its consideration. 5. Therefore, these I.As. can partially succeed only to the extent of such direction may be issued to the Resolution Professional to register their respective claims and to update the claims in the list of creditors, because we have already held in our separate order passed in I.As. Nos. 54 & 55 of 2018. However, the apportionment of these claims cannot be made as a matter of right, but only their interest, if any, can be taken care of while dealing with the I.A. No. 431 of 2018 in succeeding paragraphs for consideration and approval of the Resolution Plan. 6. It is also expedient in the present matter in view of the directions issued by the Hon'ble NCLAT to dispose of....
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....der Note 18 which are under dispute and such claims had been admitted at notional value of Re.1/- subject to the eventual outcome of such dispute. Therefore, these applicants have prayed for equity and parity with all the other creditors. 5. They have further contended that the claims of the applicants herein cannot be rejected arbitrarily by the RP as per the settled position of law that parties those are similarly situated are required to be treated equally. Hence, it is prayed for setting aside such decision of rejection of the claims in I.A. No.49/2018 to the tune of Rs. 893,21,52,807/- and in I.A. No. 50/2018 to the tune of Rs. 1618,02,74,465/-. Hence, the present applications. 6. We have gone through the above stated contentions of the present applications and heard the counsel for the RP, who has opposed the present applications, stating that till the claims of applicants are not crystallized and quantified such claims cannot be recognized during pendency of dispute and a payment on such claim can be made only after finalization of dispute crystallizing the amount payable. 7. We have considered the rival submissions made by both the parties in this respect and we are of t....
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....in the CoC proceedings, which is reported to have not been followed in the present case. Hence, present proceedings suffer from such irregularity and matter needs to be remanded back to the CoC for its re-consideration after making supply of a copy of Resolution Plan to the concerned party in the light of this recent decision of Hon'ble Supreme Court. Otherwise, the proposed Resolution Plan is liable to be rejected on such ground alone. 2. We duly considered this aspect of the case. In the light of mandate of the Hon'ble Supreme Court, in the present matter, if a Resolution Plan is not approved, the corporate debtor shall go to the liquidation which is not the main object of the I.B. Code. It is a matter of record that except to the applicants in I.A. No. 64 of 2019, all other applicants are operational creditors and having debts value less than of 10%. Hence, they cannot demand a copy of the resolution plan as a matter of right. 3. It is also a matter of record that promoters/shareholders of the Corporate-Debtor-Company had earlier filed I.A. 430 of 2018 seeking for settlement of the present CIRP proceedings by redeeming its entire debt. Wherein, they have elaborately de....
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....esolution plan. According to us, the resolution plan submitted by one or other Resolution Applicant being confidential cannot be disclosed to any other competitor Resolution Applicant nor any opinion can be taken or objection can be called for from other Resolution Applicants with regard to one or other resolution plan." 6. It is pertinent to note here that, the CoC was considering such Resolution Plan on 19.10.2018, the prevailing legal position as per the judgment of Hon'ble NCLAT was that, a copy of Resolution Plan could not be supplied. Hence no illegality can be attributed in the decision of the CoC by not providing a copy of the Resolution Plan at the relevant time to the suspended management nor on such basis such proceedings of the CoC meeting cannot be treated to have been vitiated. 7. Moreover, keeping in view of the mandate of Hon'ble Supreme Court under Article 142 of the Constitution of India, if a Resolution Plan is not approved on such ground, then the company shall go in to liquidation. Hence, it would not be appropriate for this Adjudicating Authority to remand the matter back to the CoC for reconsideration after providing a copy of the Resolution Plan to....
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....-Resolution Professional communicated to it through e-mail dated 08.10.2018, whereby the applicant's claim has been rejected. It is the case of the applicant that it sanctioned a Term Loan of Rs. 75 crore to one Essar Power Gujarat Limited (EPGL) vide its sanction letter dated April 26, 2016. As per one of the terms and conditions contained in the Facility Agreement read with Addendum to such Agreement, the borrower (EPGL) was required to arrange post-dated cheques from the present Corporate Debtor to the satisfaction of the applicant towards the Debt Servicing Obligation. 2. It is submitted that the present Corporate Debtor, vide its letter dated May 13, 2016, has issued 45 crossed post-dated cheques in favour of the applicant for a total sum of Rs. 61,71,68,861/-. Therefore, as per the applicant, the Corporate Debtor issuing such post-dated cheques, in favour of the applicant has assumed its liability in the nature of a guarantor to secure the loan/financial facility, given to the borrower-EPGL by the present applicant. 3. However, the applicant, felt aggrieved with such impugned decision of the respondent-Resolution Professional (communicated through e-mail dated 08.10.20....
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....he respondent-RP, while opposing the present application and in order to fortify his stand, obtained legal opinion from his legal adviser, who also opined that the claim of the applicant-L&T Infrastructure Finance Company Limited cannot be classified as a "financial debt" because such post-dated cheques were issued by the Corporate Debtor (ESIL) due of its payment obligation towards Bhander Power Limited (BPL) and its instance such post-dated cheques were issued in favour of the applicant in order to discharge its obligation to BPL and not issued with a view to secure any payment obligation of EPGL. Hence, it is contended that the present Corporate Debtor (ESIL) is not a party to the above stated Promoter Obligation Agreement or any Facility Agreement nor there is any kind of tripartite agreement among L&T Infrastructure Finance Company Limited, EPGL and with the present Corporate Debtor. As the Corporate Debtor, it cannot be termed as a guarantor, therefore, the applicant also cannot be called a Financial Creditor of the Corporate Debtor company not its debts fall under the definition of 'Financial Debt' under Sections 5,7 and 8 of the I & B Code. For the aforesaid reaso....
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.... written a letter on 27th May, 2016 to the Corporate Debtor requesting it to issue post-dated cheques in favour of L&T Infrastructure Financial Co. Ltd. against payment due to BPL. By perusal of the contents of such letter, it is evident that the present Corporate Debtor, who issued some post-dated cheques in favour of the applicant so as to discharge its liability of making payment of amount due to BPL. Hence, Corporate Debtor did not step into the shoe of a surety or stood as guarantor of such loan facility. Hence, in our view, by no stretch of imagination, the applicant can be termed as a guarantor. Moreover, in the strict legal issue, the status of the Corporate Debtor can only be of a garnishee, as per the provisions of the Code of Civil Procedure, having money of M/s. BPL in its hand and was asked by the BPL to be paid to the present applicant- L & T, in order to discharge its financial obligation. Hence, it cannot be fastened with the liability of a surety of EPGL. 7. Therefore, by relying on the decision of the Honourable NCLAT in the matter of Nikhil Mehta & Sons (HUF) (Supra), we are of the view that the present applicant does not fall within the purview and definition o....
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....hat it lodged its claim before the R.P. and CoC as a financial Creditor claiming for Rs. 3487.09 Crore. Later on the applicant was also classified as a secured financial creditor and out of these, a sum of Rs. 2646.05 Crores is shown as principal outstanding due to the applicant which is payable by the Corporate Debtor Company. However, it has been alleged that such dues are not being paid as per the proof of admitted claim on pro rata basis and proposed to be paid on a different criteria/different formula adopted by the CoC, for making apportionment of such amount, which is based on the value of security possessed by the applicant and in terms of the liquidation value of the assets of the company. Thereby, the applicant is going to receive only 1.7% of its admitted claim amounting to a sum of Rs. 60.71 Crores, while, other financial creditors are receiving a sum of around 92% of their entire principal debt. Hence, such being discriminatory practice, cannot be treated fair and equitable. 5. The applicant has further proposed that there should be some reasonable apportionment of the amount receivable from the Resolution Applicant among all the financial creditors on a pro rata basi....
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....da 5 4.6 92.0% 4.3 85.6% 15 Punjab National Bank 2,936.25 2,701.01 92.0% 2,512.6 85.6% 16 Deutsche Bank 2,829.88 2,603.17 92.0% 2,421.6 85.6% 17 ICICI Bank 2,294.11 2,110.31 92.0% 1,963.1 85.6% 18 Union Bank of India 2,122.60 1,952.55 92.0% 1,816.4 85.6% 19 Bank of India 1,985.08 1,826.04 92.0% 1,698.7 85.6% 20 Corporation Bank 1,566.62 1,441.11 92.0% 1,340.4 85.6% 21 Syndicate Bank 967.91 890.37 92.0% 828.3 85.6% 22 S C Lowy 900.12 828.01 92.0% 770.3 85.6% 23 UCO Bank 582.26 535.62 92.0% 498.3 85.6% 24 Exim Bank 556.26 511.7 92.0% 476.0 85.6% 25 Central Bank of India 510.04 469.18 92.0% 436.5 85.6% 26 Allahabad Bank 320.49 294.81 92.0% 274.3 85.6% 27 SREI Infrastructure Finance 175.28 161.24 92.0% 150.6 85.6% 28 Standard Chartered Bank 3,487.10 60.71 1.7% 2,983.98 85.6% Total 49,046.34 41,970.00 41,970.00 7. In support of its above stated proposal the applicant further raised some objections contending that the committee of creditors ("CoC") including the RP could not have delegated with such power to decide manner of distribution of the amount among ....
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.... charge holders over the second charge holders and subservient charge holders nor it clarify that in such financial package what would be nature of charge over the tangible or intangible assets of the company. Therefore, as per the applicant, such distribution of the amount is not just nor fair. Thus, the entire decision making process of the CoC is with such intention to deny the present applicant to receive its legitimate dues and exclude it to be marginalised . Hence, such decision needs to be aside by this Adjudicating Authority. 10. The applicant has further challenged the process of CoC on the ground of material irregularity committee in setting up core committee, sub-committee and on other delegation of powers by the of CoC to this Core committee/ Sub-committee to negotiate with the Resolution Applicant about the Resolution Plan which is illegal as it de horse the provision of the Code. 11-12. Hence, the present application seeking for above stated relief from this Court. 13. The respondent RP and Resolution Applicant have opposed the present I.A. by contending that the decision of the CoC for approval of the Resolution Plan was in conformity with the relevant provisions ....
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....ll as Shri Ravi Kadam, Mr. Soli Cooper and Shri N.K. Kaul, Mr. Sriniwasan, Mr. Navin Pahva, Sr. Advocates from the Respondent side. 18. We find that as per Material available on record, the present applicant has been one of the main applicant for initiation of Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor company by filing CP(IB) No. 39/7/NCLT/AHM/2017 which was commonly decided by this bench with CP(IB) No. 40/7/NCLT/AHM/2017 on 02.08.2017 whereby this adjudicating authority has categorically given finding to this effect (in para 33 onwards of its judgment) that application filed by the Standard Chartered Bank as well as State Bank of India are complete in all respects, for triggering the CIRP against the Corporate Debtor Company. With such findings, it further held that the Corporate Debtor company has committed default in making payment of its financial debt to the financial creditors, including Standard Chartered Bank and the State Bank of India. The amount of debts has also been quantified by this Bench in the aforesaid judgment stating inter alia that, the Standard Chartered Bank ("SCB") had provided loan of amount of USD 413000000 to M/s. Ess....
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....go into the correctness of the choice made by the administrator and will not substitute its decision to that of the administrator. The scope of judicial review is limited to the deficiency of the decision-making process and not the decision. The duty of the court in exercising the power of judicial review is thus lo confine itself to the following questions: (1) Whether a decision-making authority exceeded its powers? (2) Whether the authority has committed an error of law? (3) Whether the authority has committed a breach of the principles of natural justice? (4) Whether the authority has reached a decision which no reasonable person would have reached? (5) Whether the authority has abused its powers?" 21.1 For the sake of convenience, the relevant portion of the aforesaid decision of the Hon'ble Supreme Court can be reproduced herein below: "16. Judicial review conventionally is concerned with the question of jurisdiction and natural justice and the Court is not much concerned with the merits of the decision but how the decision was reached. In Council of Civil Service Unions v. Minister of State for Civil Service (1984) 3 All ER 935 the (GCHQ Case) the House of....
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....stressed that in all cases raising a human rights issue proportionality is the appropriate standard of review. The House of Lords in R (Daly) v. Secretary of State for the Home Department (2001) 2 AC 532 demonstrated how the traditional test of Wednesbury unreasonableness has moved towards the doctrine of necessity and proportionality. Lord Steyn noted that the criteria of proportionality are more precise and more sophisticated than traditional grounds of review and went on to outline three concrete differences between the two: - (1) Proportionality may require the reviewing Court to assess the balance which the decision maker has struck, not merely whether it is within the range of rational or reasonable decisions. (2) Proportionality test may go further than the traditional grounds of review inasmuch as it may require attention to be directed to the relative weight accorded to interests and considerations. (3) Even the heightened scrutiny test is not necessarily appropriate to the protection of human rights. ............. 22. Position in English Administrative Law is that both the tests that is. Wednesbury and proportionality continue to co-exist and the proportionality....
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....hat the decision is disproportionate i.e. if the court feels that it is not well balanced or harmonious and does not stand to reason it may tend to interfere." 22. Therefore, in the light of the above stated discussion, we are of the view that the present application can be suitably disposed of on the basis of the alternative prayers being made by the applicant seeking for equitable distribution of amount mentioned in the Rs. 42000 Crores among the financial creditors and other stakeholders which will be considered while dealing with and disposing of the IA No. 431 of 2018. 23. Further, this authority need not to go into the details of the controversy involved in the present IA and to examine merits thereof, or to make judicial review of a commercial decision of the CoC but this Adjudicating Authority can certainly make some observations and suggestions by following the well-known Wednesbury principle of unreasonableness and Doctrine of proportionality as widely accepted by the Hon'ble Supreme Court in catena of its decisions. 24. While relying on above stated principle, we are equally conscious enough about the jurisdiction of this Adjudicating Authority under Sections 30 &....
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...." of the financial creditors taken collectively or for that matter their individual opinion, as the case may be, on this count. 63. It was then contended that NCLAT committed manifest error in not calling upon the dissenting financial creditors to respond to the applications filed in the concerned appeals pending before it, including with a prayer to allow the resolution applicant to revise the resolution plan. We find no merits in this submission. The reliefs claimed in the stated application fled before the NCLAT would not take the matter any further. For, it is enough for the dissenting financial creditors to disapprove the proposed resolution plan by voting as per its voting share, based on commercial decision. Indeed, if the opposition of the dissenting financial creditors is in regard to matter(s) within the jurisdiction of the Tribunal ascribable to Sectionss 30(2) or 61(3), then the situation may be somewhat different. But that is not in issue in these cases. 64. As regards the application by the resolution applicant for taking his revised resolution plan on record, the same is also devoid of merits inasmuch as it is not open to the Adjudicating Authority to entertain a....
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.... by the requisite majority of the Committee of Creditors ("CoC") seeking approval of this Adjudicating Authority under Section 31 of the I&B Code. By this application, the applicant RP has sought for the following prayers :- "(a) That this Tribunal be pleased to pass order approving:- the Resolution Plan submitted by ArcetorMittal India Private Limited for the Corporate Debtor as per Section 31(1) of the Insolvency and Bankruptcy Code, 2016; (b) approving the appointment of the Monitoring Committee, with the constitution as specified in the Resolution Plan, to function from the Plan Approval Date until the Effective Date in the manner provided in the Resolution Plan; (c) directing that the powers of the Board of Directors of the Corporate Debtor shall continue to remain suspended until the Effective Date and shall be exercised by the Monitoring Committee; (d) approving and directing the grant of the reliefs and concessions and key directions as set forth in Annexure I of this Application, for successful implementation of the Resolution Plan; (e) directing that in accordance with Section 31(1) of the Code, the Resolution Plan shall be binding on th....
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.... not be applicable. Further, the transaction shall not be treated as void under Section 281 of the Income-tax Act, 1961 for any claims in respect of Tax or any other sum payable by the Corporate Debtor. Similarly, any requirements to obtain waivers from any Tax Authorities including in terms of Section 79 and Section 115B of the Income-tax Act, 1961 is deemed to have been granted upon approval of this Resolution Plan on the Plan Approval Date. 3. The Corporate Debtor and the Resolution Applicant shall be granted an exemption from all Taxes, levies, fees, transfer charges, transfer premiums, and surcharges that arise from or relate to implementation of the Resolution Plan, since payment of these amounts may make the Resolution Plan unviable. Foregoing reference to Taxes shall include the following: Transaction Cost Relevant Governmental Authority Any transfer premiums or charges, change of ownerships/control charges payable in connection with the implementation of this Resolution Plan and the consequent change in ownership and control of the Corporate Debtor. Includes but is not limited to: * Odisha Industrial Development Corporation, Government of Odisha * Chhattis....
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....ing on or prior to the Effective Date and which shall continue for a period of 12 months after the Effective Date. 8. All Business Permits of the Corporate Debtor that may have lapsed or expired, shall be renewed by the respective Governmental Authorities with effect from the Plan Approval Date and the Corporate Debtor shall take all necessary steps to ensure such renewal in furtherance of its statutory duties under Section 20(1) read with Section 23(2) of the Code. For avoidance of doubt, it is hereby clarified that, all Business Permits rights, entitlements, benefits and privileges whether under applicable Law, contract, lease or license granted in favour of the Corporate Debtor or which the Corporate Debtor is entitled to or accustomed to, which have expired on or prior to the Plan Approval Date or the Effective Date, shall be renewed by the relevant Governmental Authority on an expedited basis and pending receipt of such Business Permits, the Corporate Debtor shall be permitted to continue to operate its business as a going concern without disruption for the benefit of the Corporate Debtor for a period of 24 months or until renewed by the relevant Governmental Authority, whic....
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....entation of this Resolution Plan shall stand withdrawn and dismissed and all liabilities and obligations therefore, whether or not set out in the balance sheets of the Corporate Debtor or the profit and loss account statements of the Corporate Debtor will be deemed to have been written off fully, and permanently extinguished and no adverse orders passed in the said matters should apply to the Corporate Debtor or the Resolution Applicant. Upon approval of this Resolution Plan, all new inquiries, investigations, notices, suits, claims disputes, litigations, arbitrations or other judicial, regulatory or administrative proceedings will be deemed to be barred and will not be initiated or admitted against the Corporate Debtor in relation to any period prior to the Effective Date. 10. Upon approval of the Resolution Plan by the Adjudicating Authority, all financial obligations under any contract to which the Corporate Debtor is a party relatable to the period prior to the Plan Approval Date shall sand assigned or novated in favour of the Resolution Applicant unless extinguished as per directions of the Resolution Applicant. From and on the Plan Approval Date, all assets of the Corporate....
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....ust, in view of the present condition of the business of the Corporate Debtor. In the event the directions are denied or rejected by the Adjudicating Authority, the same will have an adverse impact on the business condition of the Corporate Debtor, its stakeholders and inter alia may result in failure of the Resolution Plan to resolve insolvency. 1. Assets Owned/Controlled by Existing Promoter Group: Currently the Corporate Debtor's business is highly dependent on the assets and services provided by Related Parties (most of which are controlled by the Existing Promoter Group). Therefore, the Resolution Applicant and the Corporate Debtor will require protection by way of the directions sought below to ring-fence themselves from any the Corporate Debtor. In the event the directions are denied or rejected by the Adjudicating Authority, the same will have an adverse impact on the business condition of the Corporate Debtor, its stakeholders and inter alia may result in failure of the Resolution Plan to resolve insolvency. 1. Assets Owned / Controlled by Existing Promoter Group: Currently the Corporate Debtor's business is highly dependent on the assets and services provide....
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....minal Limited to continue with the contractual arrangement with the Corporate Debtor for such period as the Corporate Debtor requires such access for its business and operations. e. Continuation of Cargo Service Contract in Vizag: The Resolution Applicant seeks a direction to Essar Vizag Terminal Limited for continuation of the cargo services arrangement with the Corporate Debtor on less favourable terms than the existing terms, and further a direction to the Vishakhapatnam Port 'Trust to direct Essar Vizag Terminal Limited to continue with the contractual arrangement with the Corporate Debtor for such period as the Corporate Debtor requires such access for its business and operations. 2. Third Party Assets: Land issues: the Resolution Applicant seeks indulgence from the Adjudicating Authority to direct the regularization of two land parcels in Hazira duly occupied by the Corporate Debtor in line with rates that were prevalent when the original application was preferred for regularization and adjust the payables so computed against any amounts already paid by the Corporate Debtor towards the conversion process (for which the charges along with, the applicable penalty has ....
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....tion of the corporate debtor. Section X and Section XI 3 Regulation 38(1A) of the CIRP Regulations. Statement on him the resolution plan has dealt with the interests of all stakeholders, including financial creditors and operational creditors of the corporate debtor. Section VIII 4 Regulation 38(2)(a) of the CIRP Regulations. The term of the resolution plan and its implementation schedule. Section VII and Section X 5 Section 30(2) (c) of the Code and Regulation 38 (2) (b) of CIRP Regulations. Mechanism regarding management and control of the affairs of the corporate debtor post approval of the resolution plan by this Tribunal. Section X 6 Section 30(2) (d) of the Code and Regulation , 38(2) (e) of CIRP Regulations. The implementation and supervision of the resolution plan. Section X 7 Section 30(2)(e) of Code Declaration that the Resolution Plan is not in contravention of provisions of applicable law Covering Letter 8 Regulation 38(3) of the CIRP Regulations. Details of AM India and its connected persons. Attached as Format V to the Resolution Plan 5. The applicant, in this application, has further described about the salient features of the proposed Resol....
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....al infusion would be made over one or more tranches within 90 days from the date on which this Hon'ble Tribunal approves the Resolution Plan ("Plan Approval Date"). Further, the AM India will inject the capital in the form of equity shares or equity linked instruments or shareholder loans. Proposal to the Operational Creditors and Other Creditors The financial proposal by AM India to the Operational Creditors and other Creditors (as defined in Section 1.49 and Section 1.52 of the Resolution Plan) of ESIL is detailed in Section V.B of the Resolution Plan. (a) Proposal to Trade Creditors and Government Creditors AM India has proposed to make pavmenl of INR 196 crores to the Trade Creditors and Government Creditors (as defined in Section 1 of the Resolution Plan). The aforesaid amount includes the AM India's proposal in pay all Admitted Claims to small Trade Creditors (defined as less than INR 1 crore in Admitted Claim) in an initiative lo foster trust and support in the MSME segment. (b) Proposal for Workmen and Employees AM India has proposed payment to workmen and employees of an aggregate amount of INR 18 crores in full against their Admitted Claims. These amou....
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.... of the Corporate Debtor; within 5(five) Business Days from, the Effective Date; and (c) be deemed to have waived all claims and dues (including interest and penalty, if any) from the Corporate Debtor arising on and from the Insolvency Commencement Date, until the Effective Date. Any claims made under any guarantees issued by the Corporate Debtor on behalf of its subsidiaries and third parties, excluding the guarantees dealt with above (i.e. as issued in favour of Financial Creditors of the Corporate Debtor), shall not constitute financial debt and all such guarantees shall also stand extinguished us a part of the Resolution Plan and the beneficiaries of such guarantees shall be expected to recover the monies with respect to uninvoked guarantees from the principal borrower and for any shortfall, they shall not have any recourse against the Corporate Debtor and/or the Resolution Applicant. For the sake of brevity, the underlying loans to such principal borrower shall continue with right to full recovery. (d) In the event that the Corporate Debtor is required to pay any amounts pursuant to the invocation of guarantees given for and on behalf of the Corporate. Debtor or paym....
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....ate Debtor (See Section VII and Section VIII of the Resolution Plan). The detailed proposal is provided in Part B to Schedule X (Implementation Schedule (Acquisition Structure), Supervision of Implementation Plan and Management) of the Resolution Plan, which inter alia include as follows: I. Equity, Equity Linked Instruments and Shareholder Loans No later than the Effective Date, AM India shall commence the process to issue equity or equity linked instruments and, if necessary, other financial instruments permitted under the foreign exchange norms (including equity shares, preference shares and debentures) as well as accept (if appropriate) upfront funds' infusion by way of loans (s) from external parties and/or ArecelorMittal group companies. Equity Infusion in Corporate Debtor and Reduction of Current Share Capital Subject to the completion of the Conditions Precedent, as contemplated under Section XIV (Approvals Required for Implementation of the Resolution Plan), AM India will infuse equity in the Corporate Debtor at fair value (which will be a part of the Upfront Fresh Capital Infusion proposed to be invested in accordance with Section V). Upon the receipt of the....
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....me shall be met by AM India. In this regard. AM India has provided a letter of commitment dated March 30, 2018 (as further extended by October 18, 2018) from Credit Agricole Corporate and Investment Bank ("Letter of Commitment")Annexed herewith and marked as Exhibit 21 is a copy of the Letter of Commitment. II. Payment of Workmen and Employee Settlement Amount As per Section VIII (Treatment of Various Stakeholders) 100% of the Claims (whether admitted, rejected or pending verification) of the Workmen and Employees (as defined in Sections 1.81 and 1.25 of the Resolution Plan) are proposed to be paid. Further, paragraph A.5 of Section X. (Implementation Schedule (Accquisition Structure), Supervision of Implementation Plan and Management) of the Resolution Plan provides that the Workmen and Employees Dues Amount shall be paid in priority to payments to the Financial Creditors. Further, the current business plan does not envisage the retrenchment of the Workmen of the Corporate Debtor. III. Payment of the Operational Creditors Paragraph A.5 of Section X (Implementation Schedule (Acquisition Structure), Supervision of Implementation Plan and Management) of the Resolution Plan pr....
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....btor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), if may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (1),- (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease, to have effect: and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the. resolution plan to the Board to be recorded on its database." "30. Submission of resolution plan (1) ................................. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the repayment of other debts of the corporate debtor; (b) provides for the repayment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less tha....
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....tion 30(2) of the I&B Code. Therefore, it is the prime duty of the Resolution Professional to examine and ascertain that each Resolution Plan should be in conformity with the relevant provisions of Section 30(2) of the I&B Code. Thereafter only such Resolution Plan needs to be put up before the CoC for its approval with requisite majority. 9. It is a mailer of record that the Resolution Professional, after making necessary scrutiny of and by satisfying himself with the present Resolution Plan that it is in conformity with the provisions of Section 30(2) of the I&B Code, has placed it before the Committee of Creditors for deliberation and necessary consideration for approval of the Plan with necessary voting. 10. In the preceding paragraph of this order, we have already described and discussed the salient features/key contents of the Resolution Plan. That apart, the Resolution Professional. through a chart, as given in paragraph 3, duly submitted that the approved Resolution Plan seems to meet with all the requirements of Section 30 (2) of the Code and Regulation 38 of the CIRP Regulations. Further, the CoC in its subsequent meeting, i.e. 19" Meeting, has duly considered and delib....
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.... commenced on October 24, 2018 and lasted till October 25, 2018 and, in the result, the CoC approved the Plan with its requisite majority of 92.24% voting. In support of this statement, the Resolution Professional has produced a copy of e-voting results (Exhibit-18). Subsequent thereto, the present Resolution Applicant also submitted an addendum to the Resolution Plan on October 25, 2018, as proposed by the sub-committee:, which also has formed part of the present Resolution Plan, By going through the above stated contents, it seems that all procedural formalities were completed and relevant provisions of the I&B Code are duly complied with hence, such Plan deserves approval. 11. Our attention was also drawn by the learned counsel for the parties to the latest Supreme Court judgments in the matter of Chitra Sharma v. Union of India [2018] 96 taxmann.com 216/148 SCL 833, Swiss Ribbons Pvt. Ltd. (supra), Vijaykumar Jain (supra) and K. Sashidhar (supra) and also to the decision of the Honourable NCLAT' in the matter of Binani Industries Limited (supra) 11.1 In Swiss Ribbons, Their Lordships of the Honourable Supreme Court have been pleased to observe as under :- "43 Under the ....
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....ng factor where there is no specific debt contract with the debtor, such as in the case of damage claimants e.g. for environmental damage and, tax authorities. Even though the principle of equitable treatment may be modified by social policy on priorities and give way to the prerogatives pertaining to holders of claims or interests that arise, for example, by operation of law, it retains its significance by 12 UNCITRAL Legislative Guide on Insolvency Law ensuring that the priority accorded to the claims of a similar class affects all members of the class in the same manner. The policy of equitable treatment permeates many aspects of an insolvency law, including the application of the stay or suspension, provisions to set aside acts and transactions and recapture value for the insolvency estate, classification of claims, voting procedures in reorganization and distribution mechanisms. An insolvency law should address problems of fraud and favouritism that may arise in cases of financial distress by providing, for example, that acts and transactions detrimental to equitable treatment of creditors can be avoided." 46. The. NCLAT has, while looking into viability and feasibility of r....
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....." 11.2 In addition to the above, the Honourable NCLAT, in the matter of Binani Industries Ltd. (supra) has observed and held that :- "17.' To decide the issue it will be desirable to notice the object of the 'I & B Code', object of 'Resolution ' and what is expected from the 'Committee of Creditors', as summarized below; 1. The objective of the 'I&BCode' As evident from the long title of the 'I&B Code'. it is or reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound matter for maximisation of value of assets of such persons to promote entrepreneurship, availability of credit, and balance the interests of all stakeholders. The recent Ordinance explicit aims to promote resolution over liquidation. 2. The objective of the 'I&B Code' is Resolution. The Purpose of Resolution is for maximisation of value of assets of the 'Corporate Debtor' and thereby for all creditors, It is not maximisation of value for a 'stakeholder' or 'a set of stakeholders' such as creditors and to promote entrepreneurship, availability of credit and balance the interest....
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....n process must also be met in any negotiated solution." 6. The 'I&B Code' aims at promoting availability of credit. Credit comes from the 'Financial Creditors' and the 'Operational Creditors'. Either creditor is not enough for business Both kinds of credits need to be on a level playing field. 'Operational Creditors' need to provide goods and services. If they are not. treated well or discriminated, they will not provide goods and services on credit. 'The objective of promoting availability of credit will be defeated c. The 'I&B Code' is for reorganisation and insolvency resolution of corporate persons. ...for maximisation of value of assets of such persons to.....balance interests of all stakeholders. It is possible to balance interests of all stakeholders if the resolution maximises the value of assets of the 'Corporate Debtor'. One cannot balance interest of all stakeholders, if resolution maximises the value for a or a set of stakeholder such as 'Financial Creditors' One or a set of stakeholders cannot benefit unduly stakeholder at the cost of another. d. The 'I&BCode' prohibits any action to foreclose, r....
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....on Process'. Interim Resolution Professional'. 'Resolution Professional'. interim finance, calm period, essential services, Committee of Creditors or 'Resolution Applicant' and detailed, regulated process for the purpose of sale. It is possible then under a 'Resolution Plan', certain rights in the 'Corporate Debtor', or assets and liabilities of the 'Corporate Debtor' are exchanged, but that is incidental It is not an auction. Depending on the facts and circumstances of the 'Corporate Debtor'. 'Resolution Applicant' May Propose a 'Resolution Plan ' that entials change of management, technology product portfolio or marketing strategy; acquisition or disposal of assets. undertaking or business; modification of capital structure or leverage; infusion of additional resources in cash or kind over tune; etc. Each plan has a different likelihood of turnaround depending on credibility and track record of 'Resolution, Applicant' and feasibility and viability of a 'Resolution Plan' are not amenable to bidding or auction. It requires application of mind by the 'Financial Creditors' who understand....
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.... financial creditors, workmen and employees, yet the operational creditors having debt value of Rs. 1 crore and above are getting nil amount (token amount of Re. 1 /-). While the total dues of the operational creditors come to around Rs. 4700 crore, the Resolution Applicant has made additional provision of Rs. 196 crore towards payment of dues of those operational creditors having debt less than Rs. 1 crore. On the other hand, the comparative chart prepared for making payments of financial creditors and other class of creditors, which has been annexed by the Applicant-Standard Chartered Bank in I.A. No.439 of 2018 (at Annexure-A page 65), goes to show that the CoC has decided to make repayment of claims as per the chart and thus, all financial creditors except Standard Chartered Bank would receive 92% of their admitted claim amount, but Standard Chartered Bank, although a financial creditor, is provided payment as per a ratio of only 1.7% of its total claim, which, prima facie, not only seems to be unequitable but also discriminatory. Had the CoC adopted some other reasonable and fair formula for apportionment of the amount among all the stakeholders, including financial and operat....
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....the grounds of attack which could he made against the decision, citing unreasonableness as an 'umbrella concept' which covers the major heads of review and pointed out that the court can interfere with a decision if it is so absurd that no reasonable decision maker would in law come to it. In GCHQ Case (supra) Lord Diplock fashioned the principle of unreasonableness and preferred to use the term irrationality as follows: "By 'irrationality' I mean what can now be succinctly referred to as "Wednesbury's unreasonableness",...... It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it." 18. In R. v. Secretary of State for the Home Department ex parte Brind (1991) 1 All ER 720, the House of Lords re-examined the reasonableness of the exercise of the Home Secretary's discretion to issue a notice banning the transmission of speech by representatives of the Irish Republican Army and its political party, Sinn Fein. Court ruled that the exercise of the Home Secretary's power did not amount to an unreasonable e....
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....now be held to be applicable in view of the development in constitutional law in this behalf. See, for example Huang v. Secy of State for the Home Deptt. wherein relating to R v. Secy of State of the Home Deptt., exp. Daly, it was held that in certain cases, the adjudicator may require to conduct a judicial exercise which is not merely more intrusive than Wednesbury, but involves a full-blown merit judgment, which is yet more than ex p. Daly, requires on a judicial review where the court has to decide a proportionality issue." xxxxxxxxx 30. Wednesbury and Proportionality - Wednesbury applies to a decision which is so reprehensible in its defiance of logic or of accepted moral or ethical standards that no sensible person who had applied his mind to the issue to be decided could have arrived at it. Proportionality as a legal test is capable of being more precise and fastidious than a reasonableness test as well as requiring a more intrusive review of a decision made by a public authority which requires the courts to 'assess the balance or equation' struck by the decision maker. Proportionality test in some jurisdictions is also described as the "least injurious means" or ....
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....andard Chartered Bank can also adequately be protected as it would get considerable amount rather than 1.7% as offered by the CoC. 15. We further suggest that rest of the amount, i.e.. 15% of the amount of Rs. 42,000 crore, which comes to Rs. 6300 crore, may be distributed among other operational creditors and other stakeholders, who are going to receive nil amount, because the Resolution Applicant has made additional provision of Rs. 196 crore meant only for those operational creditors whose debt value is less than Rs. 1 crore. Hence, such amount of 15% can be paid to other operational creditors who are having debt value of Rs. 1 crore and above on the basis of their verified/admitted/undisputed claim, so that they could be able to receive minimum 50% of their principal dues. 16. If such suggestion is accepted and followed, then we find no infirmity in the Resolution Plan as it will achieve the true spirit of law compliant under Section 30(2) of the I&B Code. Our such view finds support from the decision of the Honourable Supreme Court in the matter of Chitra Sharma (supra), wherein the Honourable Supreme Court, by exercising its extraordinary jurisdiction under Article 142 of t....
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....are a strict regime. That means the resolution plan must appear to not less than requisite voting share of the financial creditors to be an overall crediable plan, capable of achieving timelines specified in the Code generally, assuring successful revival of the corporate debtor and disavowing endless speculation. 18. Further, while approving the resolution plan, we also considered certain additional reliefs and statutory concessions being sought for by the Resolution Applicant from this Authority as pre-requisite for successful implementation of the Plan, which we have already referred in the preceding paragraphs of this judgment, whereby the Resolution Applicant has sought exemption from payment of stamp duty, taxes, fees, transfer charges, transfer premium, etc. But in our humble view, such aspect falls within the domain of the appropriate Government and competent statutory authority. Therefore, the Resolution Applicant, after approval of this plan, is always can always approach to the statutory authorities by making proper submission/application before it seeking such concession and reliefs in the light of approval of this Plan by this Adjudicating Authority. Hence, it would b....
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.... view of the direction given/mandate issued by the Honourable Supreme Court, under Article 112 of Constitution of India in ArecelorMittal India (P.) Ltd. (supra). In our earlier order dated 29.01.2019 (passed in IA No. 430 of 2018) we held that such settlement plan could be considered by the RP & CoC after having a specific permission from the Honourable Supreme Court or from the Honourable NCLAT. Further such application could be moved only under Section 12 of the I & B Code by a Financial Creditor as per the procedures stipulated therein. Therefore, by disposal of the above stated I.A. No. 430 of 2018, some common alternative prayers made in most of the pending I.As. became infructuous. Notwithstanding the above, in the interest of justice, we were required to deal with these pending I.As. in accordance with law along with I.A No. 431 of 2018 in a time bound manner, by following the directions given by the Honourable NCLAT. Hence, common arguments in respect of all I.As. were heard together along with hearing in the main I.A. bearing No. 431 of 2018 which were concluded. Thereafter, some of the parties preferred to file written submissions in support of their contentions/case, wh....
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....ues could be cleared as soon as possible. Acceding to this request, in order to do complete justice under Article 142 of the Constitution of India, and oho for the reason that the law on Section 29A has been laid down for the first time by this judgment, we give one more opportunity to both resolution applicants to pay off the NPAs of their related corporate debtors within a period of two weeks from the date of receipt of this judgment, in accordance with the proviso to Section 29A(c). If such payments are made within the aforesaid period, both resolution applicants can resubmit their resolution plans dated 2.4.2018 to the Committee of Creditors, who are then given of period of 8 weeks from this date, to accept, by the requisite majority, the best amongst the plans submitted, including the resolution plan submitted by Vedanta. We make it clear that in the event that no plan is found worthy of acceptance by the requisite majority of the Committee of Creditors, the corporate debtor, i.e. ESIL, shall go into liquidation. The appeals are disposed of, accordingly". 22. We also considered the salient features of the Resolution Plan in the light of the relevant provisions of Section 31 r....
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....ries Ltd. (supra), which stands conlirmcd by the Hon'ble Court by dismissing the SLP preferred against such decision. 23. While making our such observations/suggestions, we are conscious enough about the jurisdiction of this adjudicating authority not to substitute its view with the commercial wisdom of the CoC nor it is made open to this Adjudicating Authority in the light of decision of the Honourable Supreme Court in the matter of K. Sashidhar (supra) to make judicial review of decision of the CoC on a resolution plan which is beyond the scope and purview of Section 31 read with Section 30(4) of the I&B Code. Our such suggestion is aimed to supplement the view of the CoC and not to supplant it for better and effective implementation of the resolution plan in a more workable and effective manner, so as to avoid multiple proceedings in the present CIRP. Hence, our such observations and suggestions are not to be construed to be not approving the resolution plan. 24. Section 30(2)(e) of I & B Code stipulates that the resolution plan should not contravene any provisions of law for the time being in force. Therefore, the law of the land must be given due respect and weightage wh....
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....ave given any exemption in law or statutory concession, because, in our humble view, it lies in the domain of an appropriate Government and competent Authority. The applicant is at liberty to approach them on the strength of this resolution plan approved by this Adjudicating Authority, which seems to be sound and law compliant. We hope this will suffice the purpose of the resolution applicant for seeking necessary exemption from appropriate Government and other competent/statutory authorities. 27. Since we dealt with many interim I.As filed by various applicants, claiming to be either financial creditors or secured creditors or operational creditors or stakeholders, requesting for apportionment of the amount of Rs. 42,000 crore proposed in the resolution plan fairly and reasonably, so that their interest can also be adequately taken care of while dealing with these I.As, although we are of the view that this Adjudicating Authority has limited jurisdiction to make scrutiny of the resolution plan and cannot impose its views on the commercial wisdom of the members of the CoC, yet by following the decision of the Hon'ble NCLAT in the matter of Binani Industries (supra), wherein Th....