TaxTMI 
TaxTMI 
TaxTMI 
2019 (12) TMI 1311
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.... 270 days he filed a Resolution plan on 22.11.2019, which was approved by the Committee of Creditors by 84.7% voting shares for our approval. It is submitted that the Resolution Plan complies with all the provisions of the I & B Code, 2016 and Rules under CIRP Regulations and that it does not contravene any of the provisions of the law for the time being in force and therefore deserves to be approved. 2. The approval of the Resolution Plan was objected to by one purported Resolution Applicant viz., M/S. PHIL Mineral Benefication & Energy Pvt. Ltd. (In short PHIL) by filing CA 1650/KB/2019 and one another unsuccessful Resolution Applicant who was ranked as H3 viz., M/S. Rituraj Steel Private Limited filed C.A. (1B) No. 1577/KB/2019. Other than the above said two objectors, nobody else came forward for objecting to the approval of the resolution plan. 3. M/S. PHIL Mineral Benefication & Energy Private Limited allegedly an associate of Assets Reconstruction Limited (In Short RARL) challenged the approval of Resolution Plan contending innumerable allegations. Out of the several objections, the three objections which according to us are relevant for consideration are the following:- ....
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....e attempt on the said of the applicant/ Phil Mineral Benefication & Energy Private Limited is that it is an associate company of Rare Asset Reconstruction Company Limited and RARCL filed the resolution plan along with the applicant and, therefore, it has the locus standi to object the approval of the resolution plan. The Resolution Plan submitted by Rare Asset Reconstruction Limited (RARL) was brought to our notice at the time of hearing on the side of the RP. A very look at the Plan of Rare Asset Reconstruction Limited does not indicate that Phil Mineral Benefication & Energy Private Limited is an associate of Rare Asset Reconstruction Limited as alleged. 7. The name of two sponsors of Rare Asset Reconstruction Limited reveals from the resolution plan submitted by the RARL are Renaissance Fiscal Services Private Limited and Mr. Praveen Kumar Jain. At this juncture an affidavit under section 29A purportedly served upon the RP was referred to us by the Ld.Sr.Counsel for the PHIL. The Said affidavit (Annexure G) seen executed only on 19.11.2019 i.e., one day before the completion of the bids. No supporting evidence was brought to our notice to prove that the said affidavit was deliv....
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....P constitute fresh issue of RFRP and amounts to modification and therefore it would violate Regulation 36B(5) of the CIRP Regulation. One more submission was made on the side of the applicant that it was given only one day's notice to respond to the change in the modification of the request for the resolution plan by an e-mail dated 19th November 2019 and therefore it was unable to revise its resolution plan. Upon the said contention what is prayed for is to issue directions to RP to enable the Applicant to have proper investigation, enquiry and scrutiny of the documents of the Corporate Debtor. 10. The above said objections other than the objections that the H3 has not given a fair and just opportunity to raise a competitive offer in the process of negotiation for maximization of the value of the assets of the Corporate Debtor are found devoid of any merit. We have carefully screened the copies of minutes of COC held on 11.11.2019, 14.11.2019, and 20.11.2019. The e-mail dated 19th November, 2019 was seen issued by the RP intending to meet the requirements already directed to comply by all the resolution applicants but seen not complied by the H3, Rituraj Steel Private Limited....
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....deliberation regarding feasibility and viability and in short, there is no fair and just bidding and negotiation so as to select the best offers from amongst the three prospective resolution applicants attempted to compete with each other and thereby the COC has allegedly done the bidding in a closed room so as to ensure that the HI's Plan is to be approved. 14. There are altogether three prospective Resolution Plans identified by the RP which seem to have been filed in compliance with requirements to be meted out under Section 30(2) of the Code. The three Resolution Applicants, who reached up to the final round of bidding process, are the following : i) Rituraj Steel Private Ltd. (H3) ii) Rare Asset Reconstruction Limited (RARL-H2) iii) Consortium of Shrawan Kumar Aggrawal (HI). 15. All the above referred Resolution Applicants were admittedly called for negotiation. The negotiation for selection of the best among the three is found started from the 12th meeting of the Committee of Creditors (COC) held on 14-11-2019 and negotiations for finalising the bidding offer is found concluded in the 13th COC meeting held on 20-11-2019. The agenda No. 3 in the copy of minutes, of....
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....their willingness to file an affidavit swearing that there was no such disclosure of bid amount as recorded in the minutes. In the above said peculiar circumstances we cannot ignore the above said submission on the side of the objectors, though we have already found that PHIL has no locus standi to object the approval of the resolution plan. 17. Upon conclusion of the negotiations, the RP has declared Consortium of Shrawan Kumar Agarwal as the HI bidder, Rare Asset Reconstruction Company Limited was declared as H2 bidder and M/S. Rituraj Steel Pvt. Ltd., was declared as H3 bidder. According to the RP, the negotiations continued until the Applicants gave their final figures. The final figure of bid amounts offered according to the RP, as per the minutes dated 20-11-2019, is the following : i) HI Bidder : Total bid amount- Rs. 89.86 Crores ii) H2 Bidder : Offered Rs. 85.66 Crores iii) M/S. Rituraj Steel Pvt. Ltd. offered Rs. 57 Crores 18. Though, the Ld. Counsel for the RP attempted to convince us that the final offer of the bid amount was made known to the bidders who had participated in the negotiations there is nothing in the record to support the submission. So also the c....
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....o reconsider the Plan submitted before us for approval for conducting a fresh open bid or closed envelop bid by adhering to any established procedure for conducting the bidding process?. Our answer is yes. 22. The Ld. Counsel for the RP relying upon Hemant Khaitan Vs. Alex Green Energy Pvt. Ltd [CP(IB) No.1439/KB/2018-CA(lB) No.1205/KB/2019- NCLT, Kolkata Bench-I] and K Sashidhar V. Indian Overseas Bank [Civil Appeal No. 10673 of 2018 - 2019 SCC on Line SC] submits that since 270 days of CIRP in the case in hand already expired and the revised bids were offered after the completion of the CIRP, if it is allowed it would allow all the similarly placed applicants to circumvent the process and is against the fundamental object of the Code in keeping timeline and against the principle laid down in the above cited decisions. 23. Ld.Sr.Counsel for the PHIL on the other hand submits that though the 270 days period is over, as per the 3rd proviso added to the section 12(3) of the Code, this Adjudicating Authority can direct the COC to continue the bidding process permitting the resolution applicants to revise the bidding offer since 330 days time fixed as maximum has not expired in the c....
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....ding the feasibility and viability of the plan selected among the three Plans in the minutes. The Hon'ble Supreme Court Upheld the Order by the NCLAT in Rajputana Properties Private Limited vs. Ultratech Cement Limited and Others (SC- Civil Appeal No.10998 of 2018) wherein it has been observed that approval of the Plan by the NCLT is not a bare requirement or formality, although NCLT not permitted to alter the terms of the Plan. In order to approve a plan as held in the above cited decision, we are bound to look into the following aspects:- i) Whether the plan complies with the requirements of Section 30(2)?. ii) Whether the plan is fair and equitable or there is any unjust discrimination not envisaged in law? iii) Whether the Plan adheres to the object of the Code i.e. maximise the value of assets and balance the interests of all the Stakeholders?. 27. We are unable to answer aforesaid (ii) and (iii) questions in the affirmative. The aforesaid discussions satisfactorily establish that the plan before us is not adhering to the object of the Code i.e. maximising the value of assets and balancing the interests of the stakeholders. There is unjust discrimination in regard t....