2020 (9) TMI 44

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....n Sharma, Advocates ORDER (Through Virtual Mode) The Successful Resolution Applicant has filed this Appeal under Section 61 of the Insolvency & Bankruptcy Code, 2016 (in short 'I&B Code') against the impugned order dated 02nd July 2020 passed by Adjudicating Authority/NCLT Mumbai Bench in MA No. 422 of 2020 in CP (IB) No.241/30(6)/MB/2018, whereby the Adjudicating Authority while approving the Resolution Plan as submitted by the Appellants,has made observations in para 23, 24 and 25 of the Impugned Order thereby modifying the provisions of the approved Resolution Plan. The Appellant contends that the observations made in para 23, 24 and 25 of the Impugned Orderare without any basis and reasoning, and the Adjudicating Authority h....

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....ly unviable. It is submitted that the Adjudicating Authority exercises limited jurisdiction while approving a Resolution Planin terms of Section 31 of I&B Code and the observations made in para 23, 24 and 25 of the impugned order dated 02nd July 2020 are contrary to the scope of Section 31 of I&B Code. Appellants further contend that the relief and concessions sought by the Appellantsare germane for the successful implementation of the approved Resolution Plan. The impugned observations modify the Resolution Plan regarding the reliefs and concessions sought under the said plan. This Appeal is filed under Section 61(3) of the Insolvency & Bankruptcy Code, 2016, which is as under: "61(3) An appeal against an order approving a r....

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....at "the Resolution Applicant has sought certain reliefs and concessions in the resolution plan. The Bench is not inclined to allow any of reliefs and concessions prayed by the Resolution Applicant." In the above para, it is also mentioned that the Resolution Applicant may apply to the relevant regulatory authorities for the said reliefs and concessions and the relevant authorities may consider it as per relevant applicable laws. It is important to mention that para 6.4 of the approved Resolution Plan deals with the waiver of liability which runs from internal page 48 to 67 of the approved Resolution Plan. It is to be clarified that the Resolution Plan has a binding effect on all the stakeholders. The Adjudicating Authority has not all....

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....t after approval of the Resolution Plan, in every case, the Successful Resolution Applicant has to ensure compliance under applicable laws. In para 25 of the approved Resolution Plan, the Adjudicating Authority has only stated that the Resolution Plan is approved with modifications and shall be binding on all the stake holders. After approval of the Resolution Plan it has a binding effect on all the stake holders including employees, members, creditors, guarantors, resolution applicant and other stakeholders involved in the Resolution Plan. The Ld Counsel for the Appellant contended that the relief and concession is sought only with the view that the Resolution Applicant wants to revive the company with complete peace and certainty, t....

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.... plan" under Section 31. First, that the approved resolution plan is in contravention of the provisions of any law for the time being in force. Second, there has been material irregularity in exercise of powers "by the resolution professional" during the corporate insolvency resolution period. Third, the debts owed to operational creditors have not been provided for in the resolution plan in the prescribed manner. Fourth, the insolvency resolution plan costs have not been provided for repayment in priority to all other debts. Fifth, the resolution plan does not comply with any other criteria specified by the Board. Significantly, the matters or grounds - be it under Section 30(2) or under Section 61(3) of the I&B Code - are regarding testin....

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....he Code has held: 88. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be su....