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TaxTMI 
TaxTMI 
2020 (10) TMI 913
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....February, 2020 has been rejected by the Adjudicating Authority keeping in view the fact that the Resolution Plan of the highest bidder has already been approved with 100% voting and the Application of Appellant suffered from latches and lacked bonafidies. 2. Company Appeal (AT) (Insolvency) No.516 of 2020 arises out of order dated 18th May, 2020 by virtue whereof the Adjudicating Authority (National Company Law Tribunal), Guwahati Bench, Guwahati approved the Resolution Plan of Ngaitlang Dhar (H1 Bidder)/ Respondent No.4/ Successful Resolution Applicant. 3. The facts relevant for consideration of issues raised in these Appeals being heard together may briefly be summarized. 4. Meghalaya Infratech Ltd. (Corporate Debtor)/ Respondent No.1 had to undergo Corporate Insolvency Resolution Process as a sequel to admission of an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short) filed by Allahabad Bank ('Financial Creditor'). Mr. Amit Pareek came to be appointed as the Interim Resolution Professional (IRP), who was subsequently confirmed as Resolution Professional at the first Committee of Creditors meeting held on 25th September, 2019. ....
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....icating Authority. Therefore, paucity of time as ground for exclusion of Appellants' revised Plan would not survive. Lastly, it is submitted that the revised Resolution Plan of Appellants provided higher upfront payment than the Successful Resolution Applicant's Plan and the Resolution Professional has acted contrary to the basic principle of I&B Code in regard to maximization of the assets of Corporate Debtor by not placing the revised Plan of Appellants before the Committee of Creditors. 6. It is submitted on behalf of Respondent Nos. 1 & 2 that the Appellants were advised by the notice dated 6th February, 2020 about the agenda of the Committee of Creditors meeting to be held on 11th February, 2020 to evaluate, verify, discuss and allow the prospective Resolution Applicant to present their plan and negotiate thereon as also to finalize the list of prospective Resolution Applicant who would be allowed to participate in the further negotiation process. It is submitted that the Appellants were present in 5th Committee of Creditors meeting held on 11th February, 2020 where one of the partner (ARC) of the Appellants had withdrawn its name from Expression of Interest (EoI). It is su....
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....7. Heard learned counsel for the parties at length and perused the record on the files of the two appeals. 8. It is not in controversy that the Resolution Plan submitted by the Appellants was taken up for consideration along with other Prospective Resolution Applicants on 11th February, 2020 during 5th Committee of Creditors meeting where the Appellants were represented by Shri M.P. Jain and on being asked to improve the bid amount and clarify its stand about the upfront payment, the Appellants declined to increase the bid amount whereas Respondent No.4 enhanced the bid amount from 63 Crores to 64 Crores. It emerges from record that upon insistence of Appellants' representative Committee of Creditors deferred consideration of the Prospective Resolution Plans but made it clear that they would like to conclude the matter by tomorrow i.e. 12th February, 2020 in view of the impending expiry of timeline set by 'I&B Code'. Thus, the Committee of Creditors meeting held on 11th February, 2020 was adjourned to 12th February, 2020 on which date the Appellants did not attend the meeting. The Resolution Professional informed the Committee of Creditors about the mail received from Appellants....
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....ho invited attention of this Appellate Tribunal to impugned order dated 18th March, 2020 assailed in Company Appeal (AT) (Insolvency) No. 515 of 2020 which spells out that the Resolution Plan submitted by the highest bidder had already been approved by the Committee of Creditors on 12th February, 2020 with 100% voting whereafter it has been placed before the Adjudicating Authority for approval. The Adjudicating Authority, upon consideration of Appellants I.A No. 27 of 2020 filed in CP(IB) No. 13/GB/2019 noticed the Appellants' prayer for direction to the Resolution Professional to take on record and to consider the revised offer submitted by email dated 14th February, 2020. However, the Adjudicating Authority, upon consideration of material placed before it, found that the Resolution Plan submitted by the highest bidder had already been approved by the Committee of Creditors on 12th February, 2020 with 100% voting and subsequently placed before the Adjudicating Authority for approval. The Adjudicating Authority appears to have also taken note of the record of 5th Committee of Creditors meeting dated 11th February, 2020 in arriving at a conclusion that the Appellants had insisted up....
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....d exclusive. While the impugned order dated 18th March, 2020 assailed in Company Appeal (AT) (Insolvency) No. 515 of 2020 reproduced hereinabove speaks of approval of Resolution Plan of the highest bidder by the Committee of Creditors on 12th February, 2020 with 100% voting, the impugned order dated 18th May, 2020 assailed in Company Appeal (AT) (Insolvency) No. 516 of 2020 takes note of the approval of Resolution Plan of highest bidder by Committee of Creditors at its 7th Committee of Creditors meeting held on 06th March, 2020. What stares in the face is that the Resolution Plan of Respondent No.4 was not approved by the Committee of Creditors on 12th February, 2020 when it was considered as a highest bidder with only H1 & H2 left in the fray while Appellants stood excluded for reasons assigned in the minutes recorded on 11th February, 2020 and Appellants abstaining from Committee of Creditors meeting held on 12th February, 2020. It is clear that no decision in regard to approval of Resolution Plan was taken by Committee of Creditors in its meeting held on 12th February, 2020, notwithstanding absence of Appellants, and Respondent No.4 emerging as the highest bidder. This conclusio....
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.... order eloquently speaks of the Resolution Plan of Respondent No.4 not having been approved by Committee of Creditors on 12th February, 2020 though Respondent No.4 emerged as H1. Admittedly, on 12th February, 2020 the CIRP period of 180 days was yet to expire and in the event of Resolution Plan of Respondent No.4 having been approved by Committee of Creditors, at least 12 days' period was available to the Resolution Professional to place the approved Resolution Plan before the Adjudicating Authority for approval. Question of extension of CIRP period by 90 days would not arise in the given situation. That apart, the aforesaid order clearly bares out that approval of Resolution Plan of Respondent No.4 emerging as highest bidder was pending consideration before higher authority of the Committee of Creditors which necessitated seeking of extension of CIRP period by 90 days. In the face of this factual position, we find that the impugned order assailed in Company Appeal (AT) (Insolvency) No. 515 of 2020 having been passed on the basis of incorrect factual position as regards approval of Resolution Plan of Respondent No.4 by Committee of Creditors purportedly on 12th February, 2020 canno....
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....o. 515 of 2020 in terms of impugned order dated 18th March, 2020 was bad, the ground of exclusion of Appellants from consideration of Resolution Plan would not survive. The ground urged by the Respondents that the approval of the Resolution Plan in the instant case being based on the commercial wisdom of the Committee of Creditors is without substance as the autonomy or commercial wisdom of the Committee of Creditors is not being interfered with. It is a case of material irregularity in the conduct of CIRP by the Resolution Professional and the mutually irreconcilable two orders emanating from the Adjudicating Authority, one resting upon incorrect facts, which render the exercise in regard to approval of Resolution Plan of Respondent No.4 flawed. It is abundantly clear that the Resolution Professional acted against the mandate of provisions contained in Sections 25(2) and 30(3) of the 'I&B Code' in not placing the revised Resolution Plan of the Appellants before the Committee of Creditors for consideration which would also be contrary to the objective of maximization of the assets of the Corporate Debtor sought to be achieved by the 'I&B Code'. 13. The Hon'ble Apex Court in "Com....
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....wn to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days. Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind. It is only in such exceptional cases that time can be extende....