TaxTMI 
TaxTMI 
2020 (9) TMI 796
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....m G in Annexure B as lapsed and allow the applicant to submit expression of Interest and Resolution Plan; etc. 2. Brief facts of the case, as mentioned in the Application, which are relevant to the issue in question, are as follows: (1) The Applicant is a company incorporated under the provisions of the Companies Act, 1956, having its registered office address at No. 6, Prashant, KHB Colony, Kaladagi Road, Bagalkot-587102. The Applicant is in the representative capacity as one of the 'Prospective Resolution Applicant' to the Corporate Insolvency Resolution Process ('CIRP') of the Corporate Debtor and participation of the Applicant is germane to the present proceedings as a proper and necessary party. (2) The Respondent is a IRP/Resolution Professional appointed by the Adjudicating Authority to administer the affairs of the Corporate Debtor, and to oversee the Corporate Insolvency Resolution Process of Corporate Debtor, vide order dated 27.09.2019 passed in C.P. (IB) No. 43/BB/2019. Code, 2016. Accordingly, the Respondent caused Public Announcement seeking/invitation for expression of interest, in Form G on 05.12.2019, by fixing 26.12.2019 as last date for the s....
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....y of an email dated 16.02.2020 from the Respondent that the expression of interest of the applicant was being rejected on the ground that the timelines as mentioned in Form G have expired for submission of EOI and Resolution plan without appreciating and scrutinizing the plan on its merits. Aggrieved by the said email communication, the present application, is filed on the following, among other grounds: a) The Impugned email communication is contrary to the spirit of the I&B Code, 2016, which is to ensure that the value of the assets and business of a Corporate Debtor is maximized. It is a well-established principle that in a competitive bidding process, having multiple bidders is likely to ensure that the highest value is obtained. The Respondent lost sight of this principle, as well as the fundamental objective of the I&B Code, 2016. Furthermore, the Respondent ought to have accepted the belated expression of interest submitted by the Applicant. Given that, Committee of Creditors is yet to approve the Resolution Plans, Respondent yet to seek approval of the Resolution Plan from this Tribunal, the Respondent ought to have granted the opportunity to the Applicant to submit the E....
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....& Ferro Alloys Ltd., NCLT Kolkata, CA(IB) No. 641/KBH/2018 in CP No. 176/KB/2018; Binani Industries Ltd. Vs. Bank of Baroda, NCLAT, CA (AT) (Insolvency) No. 82 of 2018; SBI Vs. Adhunik Alloys & Power Ltd., NCLT Kolkata, CA (IB) No. 1086/KB/2018 and CA (IB) No. 1092/KB/2018 in CP (IB) No. 387/KB/2017; Canara Bank Vs. Deccan Chronicle Holdings Ltd., NCLT Hyderabad, I.A. No. 253 of 2018 in C.P. (IB) No. 41/07/HDB/2017. f) The Respondent also lost sight of the fact that by not even considering the expression of interest of the Applicant, and summarily rejecting the same, the Respondents violated the principles of natural justice, which is a cornerstone of any administrative action. Furthermore, the Respondent, who is acting in a statutory capacity, in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016, is duty bound to grant the Applicant with at least an opportunity to present its case. The Committee of Creditors, while being well within their rights to reject the proposal of the Applicant on merits, cannot do so in a mechanical manner. The Applicant would be put to a great hardship, irreparable loss and injury if the Impugned email communication is not set a....
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.... be clearly seen from the Applicant Company's Networth certificate declared by their Chartered Accountant, as on 31.03.2019, the Applicant's TNW stood at Rs. 38,98,92,422/-. It is also pertinent to highlight the Brickwork ratings of the Applicant Company in which the audited TNW for the year 2018 stood at 41.48 Crore. In the year 2019, it has dwindled to Rs. 38.98 Crore. (4) It is further contended that the Applicant has only paraded the delay aspect in submitting the EOI, but has not taken note off the TNW/NOF criteria resolved by the CoC for a private limited Company to be a prospective Resolution Applicant. This Criterion is resolved by the CoC in accordance with Section 25(2)(h) of the IBC having regard to the complexity and scale of operations off the business of the Corporate Debtor. The two Resolution plans received have qualified the TNW criteria. The consideration of resolution plan by the RP of a Company, which fails to meet the TNW criteria may unnecessarily lead to other persons, who fail to meet the eligibility criteria, expressing their interest and submitting their resolution plans. Under such circumstances, the Applicant was clearly barred from being a pro....
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....srupt the CIRP. (8) On perusal of the application, it can be seen that the Applicant, at prayer (iv) sought an interim order of injunction to restrain the CoC from approving any resolution plan. Under such circumstances, the ulterior and wavering motives with which the Applicant has approached this Tribunal by filing the application under reply is but questionable and the irreparable injury that will be caused to the CoC is beyond expression. The CoC consists of 17 Financial Creditors, who have, after detailed discussion and considering both the Resolution Plan placed before it has resolved to go with Resolution Plan 2 submitted by M/s. Sai Priya Sugars Ltd. With 100% majority on 28.02.2020. 4. Heard Mr. Vijay Narayan, learned Counsel for the Applicant, and Mr. Sudarshan learned Resolution Professional/Respondent. We have carefully perused the pleadings of the Parties, and the extant provisions of the Code and the Rules made thereunder, as also the cases cited in support. 5. The objectives of the Code inter alia are to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manne....
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....tervention. 10. Further, we find that in the 2nd CoC meeting, specific criteria for prospective resolution applicants was discussed and it was resolved by the CoC on 31.12.2019 that, the Minimum Tangible Net Worth (TNW)/Net Owned Funds ('NOF') for a private/public limited Company/LLP/Body Corporate/any other applicant, shall be a minimum of 100 crores at the Group level in the immediately preceding completed Financial Year. However, as per Applicant Company's Networth certificate declared by their Chartered Accountant, as on 31.03.2019, its TNW stood at Rs. 38.99 Crore. This was lower than its Brickwork ratings for 2018 when its audited TNW stood at 41.48 Crore. Therefore, though the case of the Applicant was rejected on the ground of delay, it was also considered on merits/eligibility against the broad parameters laid down by the CoC. Hence, as the Applicant did not meet the basic criteria, apart from attempting a consideration of its delayed application by the RP, no purpose would be served in condoning the delay as prayed for. This also works against the objects of the Code, namely conduct of a time bound resolution process. Further, undue delay can lead to diminuti....