TaxTMI 
TaxTMI 
2021 (3) TMI 496
X X X X Extracts X X X X
X X X X Extracts X X X X
....vni Shrivastav, Adv. Mr. Ritesh Kumar, AOR Mr. David Rao, Adv Mr. M. S. Vishnu Sankar, Adv. Mr. Sriram Parakkat, AdvMs. Athira G. Nair, Adv Mr. Atul Sharmafor M/S LAWFIC Mr. Gaurav Agrawal, AOR JUDGMENT B. R. GAVAI, J. 1. Leave to file Civil Appeal in Diary No. 24125 of 2020 is granted. 2. All these appeals, assail the judgment and order of the National Company Law Appellate Tribunal, New Delhi (hereinafter referred to as "NCLAT") dated 5.8.2020, passed in Company Appeal (AT) (Insolvency) Nos. 344345 of 2020. 3. By the said judgment and order dated 5.8.2020, NCLAT has allowed the appeals filed by Kotak Investment Advisors Limited (hereinafter referred to as "KIAL"), respondent No.1 herein, aggrieved by two separate orders dated 28.11.2019 passed by National Company Law Tribunal, Mumbai Bench (hereinafter referred to as "NCLT" or "Adjudicating Authority") in M.A. No.1039 of 2019 and M.A. No. 691 of 2019. NCLAT has set aside the said orders passed in the said M.As. M.A. No.1039 of 2019 was filed by KIAL objecting to grant of approval to the resolution plan submitted by Kalpraj Dharamshi and Rekha Jhunjhunwala, a consortium, (hereinafter referred to as "Kalpraj"), which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m 'G' came to be issued on 9.11.2018, which required the Resolution Plans to be submitted on or before 13.12.2018. The fifth and the last Form 'G' came to be issued on 11.12.2018, which required the Resolution Plans to be submitted on or before 8.1.2019. KIAL, the appellant before NCLAT (respondent No.1 herein) and one Karvy Data Management Systems Limited submitted their Resolution Plans on the last date as stipulated in the last and fifth Form 'G' i.e. on 8.1.2019. One another applicant i.e. WeP Solutions Ltd. submitted its Resolution Plan jointly with one Sattva Real Estate Private Limited (hereinafter referred to as "WeP") on 13.1.2019. The appellant in Civil Appeal Nos. 29432944 of 2020 i.e. Kalpraj submitted its EOI and Resolution Plan to RP on 27.1.2019. On 29.1.2019, KIAL sent an email to RP, raising its objection permitting Kalpraj to submit Resolution Plan, beyond the prescribed time limit. In the meeting of CoC held on 30.1.2019, the Resolution Plan of Kalpraj was placed before CoC. In the said meeting, CoC resolved to direct all the applicants to submit revised plans. Accordingly, an email was sent to KIAL directing it to submit its revised plan. Accordingly, K....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ach of the provisions of the I&B Code and therefore, allowed the appeals filed by KIAL. Vide the said order, NCLAT, while setting aside both the orders dated 28.11.2019, passed by NCLT, also directed CoC to take a decision afresh, in the light of the directions issued in its order, regarding consideration of the Resolution Plans, which were submitted prior to the prescribed date as per last Form 'G'. This was directed to be done in a period of ten days from the date of the said order. NCLAT further directed, that if no decision was communicated to the Adjudicating Authority i.e. NCLT and since the timeline for completion of CIRP had already expired, the Adjudicating Authority was to pass an order for liquidation of the corporate debtor. 5. Being aggrieved by the aforesaid order passed by NCLAT, four appeals have been filed before this Court, the details thereof are as under: Case No. & Cause title Cause title Particulars of the appellant C.A. No.29432944/ 2020 Kalpraj Dharamshi & anr. Vs. Kotak Investment Advisors Ltd. & Anr. Successful Resolution Applicant C.A. No.31383139 of 2020 Deutsche Bank AG vs. Kotak Investment Advisors Ltd. & Ors. Financial Cr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the subject matter expressed by the creditors after due deliberation in CoC meeting through voting, which decision is taken as per the commercial wisdom, is not justiciable before the Adjudicating Authority. He also relied on the judgment of this Court in the case of Committee of Creditors of Essar Steel India Limited through Authorised Signatory vs. Satish Kumar Gupta & Ors. (2019) SCC Online SC 1478 9. Shri Rohatgi further submitted, that as held by this Court in Innoventive Industries Ltd. vs. ICICI Bank & Anr. (2018) 1 SCC 407, I&B Code is a complete code in itself. He submitted, that Section 61(2) of the I&B Code provides, that the decision of the Adjudicating Authority (i.e. NCLT) may be challenged before NCLAT within 30 days. He submitted, that an appeal would be tenable within a further period of 15 days, only when NCLAT comes to a satisfaction, that there was a sufficient cause for not filing the appeal within a period of 30 days. He submitted, that since the I&B Code is a complete Code, neither Section 5 nor Section 14 of the Limitation Act, 1963 (hereinafter referred to as "the Limitation Act") would be applicable. He submitted, that the judgment of NCLT was delivered....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 100,00,00,000/( Rupees One Hundred Crores only). vii. Minosha Digital Solutions Pvt. Ltd. merged with the Corporate Debtor with effect from 28.11.2019. viii. On 27.12.2019, the Appellants replaced the Bank Guarantee issued by Deutsche Bank for INR 136,66,71,090/( Rupees One Hundred ThirtySix Crores SixtySix Lakh SeventyOne Thousand and Ninety Only). ix. On 30.12.2019, the CIRP costs amounting to INR.2,65,68,000/16 (Rupees Two Crores SixtyFive Lakh SixtyEight Thousand only) were paid by the Appellants. x. On 01.01.2020, the Appellants have made payment of INR 19,54,43,411/( Rupees Nineteen Crores FiftyFour Lakh FortyThree Thousand Four Hundred and Eleven) to nonrelated party operational creditors of the Corporate Debtor. xi. From 01.01.2020 to 03.01.2020, the Appellants have made Equity infusion of INR 3 crores and an Equity infusion of INR 29 Crores in Company. xii. On 23.01.2020, Appellants made payments to Ricoh Company Limited and NRG Group Limited (minority shareholder) for the transfer of shares to Appellants. xiii. On 31.01.2020, the Board of directors of the Corporate Debtor was reconstituted and the Appellants....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on behalf of Kalpraj, which is also respondent in the other appeals. Dr. Singhvi submitted, that KIAL, in the covering letter along with its Resolution Plan dated 8.1.2019, has unequivocally undertaken to waive any and all claims in respect of the Resolution Plan Process. He submitted, that the phrase 'Resolution Plan Process' is defined in clause 1.0 of the Process Memorandum which means, "the process set out in this Process Memorandum for submission, evaluation and selection of Resolution Plan and activities in relation or incidental thereto." He submitted, that in view of unconditional and irrevocable acceptance of the terms of the Process Memorandum and having voluntarily and expressly waived all claims with respect to the Resolution Plan Process, it is not permissible for KIAL to challenge the decision of CoC approving the Resolution Plan of Kalpraj. He submitted, that clause 10.4 of the Process Memorandum itself provides, that RP was at liberty to receive any Resolution Plan, at any stage of the Resolution Plan Process and examine such Resolution Plan with the approval of CoC. Learned Senior Counsel submitted, that having chosen to revise its Resolution Plan and submit the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble beyond the period of time so stipulated. He relied on the following judgments of this Court in this regard. (i) Union of India vs. Popular Construction Co. (2001) 8 SCC 470, (ii) Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur & Ors. (2008) 3 SCC 70, and (iii) Chhattisgarh State Electricity Board vs. Central Electricity Regulatory Commission & Ors. (2010) 5 SCC 23 17. Dr. Singhvi further submitted, that NCLAT in two cases in Radhika Mehra vs. Vaayu Infrastructure LLP & Ors. 2020 SCC Online NCLAT 532 and Dhirendra Kumar vs. Randstand India Pvt. Ltd. & Anr. 2019 SCC Online NCLAT 444 has held, that the provisions of Section 14 of the Limitation Act cannot be made applicable to the appeal preferred under Section 67 of the I&B Code. 18. Dr. Singhvi submitted, that in any case, it cannot be said, that filing of the writ petition was a bona fide act of KIAL. He submitted, that KIAL, which was armed with a battery of legal counsel, was very well aware, that it had an alternate remedy of filing an appeal before NCLAT and therefore, was not entitled to take an umbrella of Section 14 of the Limitation Act. In this regard, he relied on the judgment of this C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....NG FOR FOURTH DIMENSION SOLUTIONS LIMITED 22. Shri C.A. Sundaram, learned Senior Counsel appearing for Fourth Dimension Solutions Limited, appellant in Civil Appeal D.No.24125 of 2020, which claims to have the highest amount recoverable from the Corporate Debtor submitted, that the said appellant is not concerned with the dispute between the parties, which is the subject matter of consideration in the present appeals. It is further contended, that the appellants' dues are subject matter of pending arbitration proceeding between the Corporate Debtor and the appellants and is yet to attain finality, so as to liquidate the dues. It is aggrieved by the direction given in paragraph 39 by NCLT in its order dated 28.11.2019 in M.A. No.691 of 2019. The learned Senior Counsel submitted, that by the said direction it is directed, that the Resolution Applicant who stepped into the shoes of Corporate Debtor subsequent to the approval of the Resolution Plan by it, shall not be held responsible for any outstanding statutory dues and other claims for the period before commencement of CIRP. In the submission of Shri Sundaram, this direction is prejudicial to the appellant, which is the largest ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... application by RP before NCLT for approval of Resolution Plans submitted by Kalpraj, KIAL had filed an application objecting thereto being M.A. No.1039 of 2019. He submitted, that perusal of the ordersheet of NCLT dated 3.7.2019 would reveal, that the application filed by KIAL and one another application being M.A. No.2023 of 2019 were heard by the learned single Member and reserved for orders. He submitted, that insofar as M.A. No.691 of 2019 is concerned, the order dated 3.7.2019 would show, that the said application was directed to be kept on 23.7.2019 at 2.30 p.m. along with other applications for consideration of resolution plan on its commercial aspect. The other matters were directed to be kept for hearing on 15.7.2019. It is further submitted, that when M.A. No.691 of 2019 was listed on 23.7.2019, it was directed to be heard on 7.8.2019 at 2.30 p.m. On 7.8.2019, M.A. No. 691 of 2019 was listed, for the first time, before the Bench consisting of two Members and on that date the matter came to be adjourned to 26.8.2019. Again on 26.8.2019, the matter came up before the Division Bench and the Division Bench directed the same to be kept on 6.9.2019. On 6.9.2019, the Division B....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it was bona fide prosecuting the remedy before a wrong forum. Learned counsel submitted, that a liberal approach is required to be given to the provisions of Article 14. Learned counsel relied on the judgments of this Court in the case of Ketan V. Parekh vs. Special Director, Directorate of Enforcement & Anr. (2011) 15 SCC 30, M.P. Steel Corporation vs. Commissioner of Central Excise (2015) 7 SCC 58 and Union of India & Ors. vs. West Coast Paper Mills Ltd. & Anr. (2004) 3 SCC 458 in this regard. 29. Insofar as the arguments of the appellants with regard to acquiescence and waiver are concerned, learned Senior Counsel submitted, that, at the earliest opportunity, KIAL has objected to Kalpraj submitting its Resolution Plan. He submitted, that on KIAL coming to know, that the Resolution Plan of Kalpraj was accepted beyond 8.1.2019, KIAL objected to it vide email dated 29.1.2019 addressed to RP. He submitted, that RP had replied to its email on 30.1.2019 and requested to submit amended Resolution Plan by 3.00 p.m. on 1.2.2019. He submitted, that in the said email it is also mentioned, that "CoC reserves the rights to not consider your plan, if received after the said timeline". He ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the entire process adopted by RP and CoC was contrary to the statutory provisions, fair play and transparency. He submitted, that perusal of the definition of 'applicant' in the Process Memorandum in clause 1.0 would show, that for being a resolution applicant, one has to be an applicant who has applied within the prescribed period either under EOI or Form 'G'. It is submitted, that since Kalpraj had neither responded within the period prescribed under EOI or any of the Form 'G', it could not have been considered to be a resolution applicant. He submitted, that the entire participation of Kalpraj is illegal. He submitted, that after the plan was submitted by KIAL there was a detailed discussion with RP with regard to the plan submitted by it, wherein entire plan was disclosed, after which Kalpraj was permitted to step in. He submitted, that perusal of the Resolution Plan of Kalpraj would reveal, that it is identical with the plans submitted by KIAL, with a little variation to the extent, that in the plan of KIAL the provision made for minority shareholder is Rs. 1 crore whereas, in the plan of Kalpraj it is Rs. 50 crore. He submitted, that the entire conduct of RP as well as CoC wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law." Section 61 and 238A of the I&B Code "61. Appeals and Appellate Authority.-(1) Notwithstanding anything to the contrary contained under the Companies Act, 2013, any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Appellate Tribunal. (2) Every appeal under subsection (1) shall be filed within thirty days before the National Company Law Appellate Tribunal: Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days. (3) An appeal against an order approving a resolution plan under Section 31 may be filed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rther provides, that NCLAT may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied, that there was sufficient cause for not filing the appeal. However, such period shall not exceed fifteen days. 39. Since there is a period different from the one which is prescribed by the Schedule to the Limitation Act, the limitation for an appeal would be governed by Section 61 of the I&B Code, which is a special statute. As such, an appeal will have to be preferred within a period of thirty days from the date on which the order was passed by NCLT. However, if NCLAT is satisfied, that there was sufficient cause for not filing the appeal within a period of thirty days, it may allow an appeal to be filed within a further period of fifteen days. As such, the normal period of limitation prescribed under the I&B Code is thirty days, with a provision for allowing the filing of an appeal within a further period of fifteen days, if NCLAT is satisfied, that there was a sufficient cause for not filing the appeal within thirty days. 40. In the present case, the dates are not in dispute. The judgment of NCLT is dated 28.11.2019. As such, as per Section 61(2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....out jurisdiction.-(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (3) Notwithstanding anything contained in Rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of subsection (1) shall apply in relation to a fresh suit instituted on permission granted by the court under Rule 1 of that Order, w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....i vs. Presiding Officer, Labour Courts, Hubli and others etc. (1969) 1 SCC 873, Nityananda M. Joshi and others vs. Life Insurance Corporation of India and others (1969) 2 SCC 199, Commissioner of Sales Tax. U.P., Lucknow vs. Parson Tools and Plants, Kanpur (1975) 4 SCC 22, Kerala State Electricity Board, Trivandrum vs. T.P. Kunhaliumma (1976) 4 SCC 634, Officer on Special Duty (Land Acquisition) and another vs. Shah Manilal Chandulal and others (1996) 9 SCC 414 and Consolidated Engineering Enterprises (supra) held, that the word "court" in Section 14 takes its colour from the preceding words "civil proceedings". It was therefore held, that the Limitation Act including Section 14 would not apply to appeals filed before a quasijudicial Tribunal. It was held, that since the appeal as mentioned in Section 128 of the Customs Act is not before a Court, the provisions of Section 14 would not be applicable. 47. All the authorities cited above, including Consolidated Engineering Enterprises (supra), have been elaborately discussed in the judgment of this Court in the case of M.P. Steel Corporation (supra) and therefore, we refrain from burdening the present judgment by reproducing the ob....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 14 were applied in J. Kumaradasan Nair v. Iric Sohan [(2009) 12 SCC 175 : (2009) 4 SCC (Civ) 656] to a revision application filed before the High Court of Kerala. The Court held: (SCC pp. 18081, paras 1618) '16. The provisions contained in Sections 5 and 14 of the Limitation Act are meant for grant of relief where a person has committed some mistake. The provisions of Sections 5 and 14 of the Limitation Act alike should, thus, be applied in a broadbased manner. When subsection (2) of Section 14 of the Limitation Act per se is not applicable, the same would not mean that the principles akin thereto would not be applied. Otherwise, the provisions of Section 5 of the Limitation Act would apply. There cannot be any doubt whatsoever that the same would be applicable to a case of this nature. 17. There cannot furthermore be any doubt whatsoever that having regard to the definition of 'suit' as contained in Section 2(l) of the Limitation Act, a revision application will not answer the said description. But, although the provisions of Section 14 of the Limitation Act per se are not applicable, in our opinion, the principles thereof would be applicable for the purpose....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e underlying the said section, namely, that the bar of limitation should not affect a person honestly doing his best to get his case tried on merits but failing because the court is unable to give him such a trial, would not be applicable to an application filed under Section 34 of the 1996 Act. The principle is clearly applicable not only to a case in which a litigant brings his application in the court, that is, a court having no jurisdiction to entertain it but also where he brings the suit or the application in the wrong court in consequence of bona fide mistake or (sic of) law or defect of procedure. Having regard to the intention of the legislature this Court is of the firm opinion that the equity underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a wrong court, should be excluded.' See Shakti Tubes Ltd. v. State of Bihar [(2009) 1 SCC 786 : (2009) 1 SCC (Civ) 370] .' " 50. Thus, this Court relying on the earlier judgments in the cases of Bhudan Singh and another vs. Nabi Bux and another (1969) 2 SCC 481, J. Kumaradasan Nair and another vs. Iric Sohan and others (2009) 12 SCC 175, and Consolidated Engineer....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the one which is advanced before us, that since the Code is a complete Code in itself, the limitation as provided only under the Code would govern the field and would exclude the application of provisions of Section 14 of the Limitation Act was made in the case of M.P. Steel Corporation (supra). While considering this objection, this Court observed thus: "42. However, it remains to consider whether Shri Sanghi is right in stating that Section 128 is a complete code by itself which necessarily excludes the application of Section 14 of the Limitation Act. For this proposition he relied strongly on Parson Tools [(1975) 4 SCC 22 : 1975 SCC (Tax) 185 : (1975) 3 SCR 743] which has been discussed hereinabove. As has already been stated, Parson Tools [(1975) 4 SCC 22 : 1975 SCC (Tax) 185 : (1975) 3 SCR 743] was a judgment which turned on the three features mentioned in the said case. Unlike the U.P. Sales Tax Act, there is no provision in the Customs Act which enables a party to invoke suo motu the appellate power and grant relief to a person who institutes an appeal out of time in an appropriate case. Also, Section 10 of the U.P. Sales Tax Act dealt with the filing of a revision....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gg. [(2008) 7 SCC 169] above, being the difference between exclusion of a certain period altogether under Section 14 principles and condoning delay. As has been pointed out in the said judgment, when a certain period is excluded by applying the principles contained in Section 14, there is no delay to be attributed to the appellant and the limitation period provided by the statute concerned continues to be the stated period and not more than the stated period. We conclude, therefore, that the principle of Section 14 which is a principle based on advancing the cause of justice would certainly apply to exclude time taken in prosecuting proceedings which are bona fide and with due diligence pursued, which ultimately end without a decision on the merits of the case." 53. Perusal of the aforesaid would therefore reveal, that the Court has clearly rejected the objection raised by the Revenue in M.P. Steel Corporation (supra) which was raised relying on the judgment of this Court in the case of Parson Tools and Plants (supra). This Court observed, that the time during which the applicant was prosecuting such application before the wrong court can be excluded, provided the proceeding in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y contested between the parties and by an order running into 32 pages, the Division Bench of the Bombay High Court dismissed the petition relegating the petitioner therein (i.e. KIAL) to avail of an alternate remedy available in law. 55. Perusal of the memo of the writ petition would reveal, that the petitioner (i.e. KIAL) has specifically averred thus in the petition: "2. By way of present Petition seeks to challenge order dated 28th November 2019 passed by Hon'ble National Company Law Tribunal - Bench - II, Mumbai ("NCLT") on Misc. Application No.1039 of 2019 filed by the present Petitioner. The NCLT, in gross abuse of process of law and in complete disregard of true and actual circumstances has proceeded to pass the impugned order. The order impugned is passed by bench of two members, Hon'ble M.K. Sharawat (Judicial) and Hon'ble Chandra Bhan Singh (Technical) on 28th November, 2019. However, the matter was heard and reserved for orders on 03rd July, 2019, by Hon'ble Member, Shri M.K. Sharawat (Judicial). At the relevant point of time, when the matter was heard and argued, Hon'ble Chandra Bhan Singh (Technical) was not even appointed as Member of NCLT and never had oc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Chandra Maheshwari (supra), this Court observed thus: "It is a well established proposition of law that when an alternative and equally efficacious remedy is open to a litigant he should be required to pursue that remedy and not to invoke the special jurisdiction of the High Court to issue a prerogative writ. It is true that the existence of a statutory remedy does not affect the ju67 risdiction of the High Court to issue a writ. But, as observed by this Court in Rashid Ahmed v. The Municipal Board, Kairana [(1950) SCR 566], "the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs" and where such a remedy exists it will be a sound exercise of discretion to refuse to interfere in a writ petition unless there are good grounds therefore. But it should be remembered that the rule of exhaustion of statutory remedies before a writ is granted is a rule of self imposed limitation, a rule of policy, and discretion rather than a rule of law and the court may therefore in exceptional cases issue a writ such as a writ of certiorari notwithstanding the fact that the statutory remedies have not been exhausted." 60. This Cour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e constitutional law as they still hold the field." 63. A similar view has been reiterated in the judgment of this Court in the case of Nivedita Sharma vs. Cellular Operators Association of India (supra). 64. In the present case, perusal of the writ petition would reveal, that it was the specific case of KIAL, that its application, objecting to the application of RP for approval of the resolution plan was heard by a Member (Judicial), whereas, the final orders were passed by a Bench consisting of Member (Judicial) and Member (Technical). It has specifically averred, that though an alternate remedy was available to it, it was invoking the jurisdiction of the High Court since the question involved was also with regard to the manner in which the jurisdiction was exercised by NCLT. It could thus be seen, that KIAL was bona fide prosecuting the proceedings before the High Court in good faith. Perusal of the dates referred to herein above would also reveal, that KIAL was prosecuting the proceedings before the High Court with due diligence. Even before the availability of the certified copy, it had knocked the doors of the High Court. The matter before the High Court was hotly conte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der Section 34(3) of the Arbitration Act fell for consideration. In Consolidated Engineering Enterprises (supra), the appellant before this Court was an enterprise engaged in civil engineering construction as well as development of infrastructure. It entered into an agreement with the respondent for construction of earthen bund, head sluices and the draft channel of the Y.G. Gudda tank. A dispute arose between the parties and therefore, the appellant invoked arbitration Clause 51 of the agreement. The dispute was referred to the sole arbitrator who passed his award in favour of the appellant. Feeling aggrieved by the said award, the respondents preferred an application to set aside the said award as provided by Section 34 of the Arbitration Act in the Court of the Civil Judge (Senior Division), Ramanagaram, Bangalore Rural District, Bangalore. However, it was realised by the respondents, that an application for setting aside the award should have been filed before the Principal District Judge, Bangalore District (Rural). As such, an application was preferred by the respondents in the Court of the Civil Judge (Senior Division), Ramanagaram with a request to transfer the application ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....construed to mean as ruling that the provisions of Section 14 of the Limitation Act are also not applicable to an application challenging an award under Section 34 of the Act. As noticed earlier, in the Act of 1996, there is no express provision excluding application of the provisions of Section 14 of the Limitation Act to an application filed under Section 34 of the Act for challenging an award. 28. Further, there is fundamental distinction between the discretion to be exercised under Section 5 of the Limitation Act and exclusion of the time provided in Section 14 of the said Act. The power to excuse delay and grant an extension of time under Section 5 is discretionary whereas under Section 14, exclusion of time is mandatory, if the requisite conditions are satisfied. Section 5 is broader in its sweep than Section 14 in the sense that a number of widely different reasons can be advanced and established to show that there was sufficient cause in not filing the appeal or the application within time. The ingredients in respect of Sections 5 and 14 are different. The effect of Section 14 is that in order to ascertain what is the date of expiration of the "prescribed period", ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Limitation Act, Section 14 of that Act will be applicable to an application under Section 34(1) of the AC Act. Even when there is cause to apply Section 14, the limitation period continues to be three months and not more, but in computing the limitation period of three months for the application under Section 34(1) of the AC Act, the time during which the applicant was prosecuting such application before the wrong court is excluded, provided the proceeding in the wrong court was prosecuted bona fide, with due diligence. Western Builders [(2006) 6 SCC 239] therefore lays down the correct legal position." 72. In paragraph 57, Raveendran, J. also observed, that the decision in Popular Construction Co. (supra) did not consider the applicability of Section 14 of the Limitation Act to an application under Section 34 of the Arbitration Act. 73. As such, in view of the judgment of three Judges Bench of this Court in the case of Consolidated Engineering Enterprises (supra), the reliance placed by the appellants on the judgment of this Court in Popular Construction Co. (supra) would not be of any assistance. 74. Reliance is also placed on the judgment of this Court in the case of S....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... relevant to refer to the following observations in Neeraj Jhanji (supra): "3. The very filing of writ petition by the petitioner in the Delhi High Court against the order-in-original passed by the Commissioner of Customs, Kanpur indicates that the petitioner took a chance in approaching the High Court at Delhi which had no territorial jurisdiction in the matter. We are satisfied that filing of the writ petition or for that matter, appeal before the Delhi High Court was not at all bona fide. We are in agreement with the observations made by the Allahabad High Court in the impugned order [Neeraj Jhanji v. CCE & Customs, Custom Appeal Defective 16 of 2012, order dated 682012 (All)] . The Allahabad High Court has rightly dismissed the petitioner's ap82 plication of condonation of delay and consequently the appeal as time barred." 79. It is thus clear, that this Court found, that the petitioner therein had adopted tactics of taking chances by approaching High Court of Delhi, which had no territorial jurisdiction. As such, it was found, that neither the writ petition nor the appeal before the Delhi High Court could be construed to be a bona fide. It was further noticed, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Bombay. It also appears that the appellants were sure that keeping in view their past conduct, the Bombay High Court may not interfere with the order of the Appellate Tribunal. Therefore, they took a chance before the Delhi High Court and succeeded in persuading the learned Single Judge of the Court to entertain their prayer for stay of further proceedings before the Appellate Tribunal. The promptness with which the learned Senior Counsel appearing for the appellant, Kartik K. Parekh made a statement before the Delhi High Court on 7112007 that the writ petition may be converted into an appeal and considered on merits is a clear indication of the appellant's unwillingness to avail remedy before the High Court i.e. the Bombay High Court which had the exclusive jurisdiction to entertain an appeal under Section 35 of the Act. 33. It is not possible to believe that as on 7-11-2007, the appellants and their advocates were not aware of the judgment of this Court in Ambica Industries v. CCE [(2007) 6 SCC 769] whereby dismissal of the writ petition by the Delhi High Court on the ground of lack of territorial jurisdiction was confirmed and it was observed that the parties cannot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngs before the High Court were hotly contested and by an elaborate judgment, the High Court dismissed the writ petition relegating the petitioner therein i.e. KIAL to an alternate remedy available in law. It is thus apparently clear, that KIAL was bona fide prosecuting a remedy before the High Court in good faith and with due diligence. In a given case, the High Court could have exercised jurisdiction under Article 226 of the Constitution inasmuch as, the grievance was regarding procedure followed by NCLT to be in breach of principles of natural justice. That would come within the limited area earmarked by this Court for exercise of extraordinary jurisdiction under Article 226 despite availability of an alternate remedy. 84. This Court recently in the judgment of Embassy Property Developments Pvt. Ltd. vs. State of Karnataka and Others 2019 SCC Online 1542 had an occasion to consider a similar issue. We find it apposite to refer to the question framed by this Court, which reads thus: "i) Whether the High Court ought to interfere, under Article 226/227 of the Constitution, with an order passed by the National Company Law Tribunal in a proceeding under the Insolvency and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aise any grievance. It is submitted, that the principles of waiver and acquiescence are squarely applicable in the present case. It was also submitted on behalf of the appellants, that the revised plans, submitted by KIAL, were submitted without mentioning, that it was without prejudice and as such, it was not entitled to make any grievance on that count. 88. It is submitted, that the approach adopted by KIAL amounted to taking chances, as after having failed in the process, challenging the same would not be permissible in law. It is also contended that during the 12th meeting of CoC, Kotak Bank, of which KIAL is a 100% subsidiary, also agreed with CoC counsel's view, that Kalpraj's resolution plan can be considered. 89. It could thus be seen, that the main thrust of the arguments advanced on behalf of the appellants with regard to waiver and acquiescence is on two grounds, viz., (i) clause 10.4 of the Process Memorandum read with paragraph 5(b) of the covering letter for submission of resolution plan by KIAL, and (ii) participation of KIAL in the process after Kalpraj was permitted to participate in the process. 90. We may refer to clause 10.4 of the Process Memorandum an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case of Central Inland Water Transport Corporation Limited and another vs. Brojo Nath Ganguly and another (1986) 3 SCC 156. "89. Should then our courts not advance with the times? Should they still continue to cling to outmoded concepts and outworn ideologies? Should we not adjust our thinking caps to match the fashion of the day? Should all jurisprudential development pass us by, leaving us floundering in the sloughs of 19th century theories? Should the strong be permitted to push the weak to the wall? Should they be allowed to ride roughshod over the weak? Should the courts sit back and watch supinely while the strong trample underfoot the rights of the weak? We have a Constitution for our country. Our judges are bound by their oath to "uphold the Constitution and the laws". The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat this principle will apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. 95. Applying the said principles to the facts of the present case, KIAL had no choice than to accept the terms of the contract. Paragraph 5(b) of the letter is a part of a covering letter format, which is provided in the Process Memorandum itself. The covering letter is in Format I and the party desiring to participate in the Resolution Plan Process has no other option, than to sign the dotted lines. Hence, the parties cannot be said to have equal bargaining power and the applicants have no other choice than to sign on the documents prescribed in the format. Paragraph 5(b) of the covering letter format, requires a party to undertake, that it will accept all the decisions made by CoC, RP and/or the Adjudicating Authority and that the decisions taken will be binding on it. It also requires the applicant, to sign on the document thereby, providing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sions under the Code. 100. We are therefore of the view, in light of the law laid down in Central Inland Water Transport Corporation Limited (supra), KIAL cannot be held to be bound by such unconscionable clause in the letter, which is in a prescribed format. 101. The second ground raised, with regard to waiver and acquiescence, is based upon the participation of KIAL in the Resolution Plan Process after Kalpraj was permitted to participate in the proceedings. 102. The word 'waiver' has been described in Halsbury's Laws of England, 4th Edn., Para 1471, which reads thus: "1471. Waiver.-Waiver is the abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted, and is either express or implied from conduct. ... A person who is entitled to rely on a stipulation, existing for his benefit alone, in a contract or of a statutory provision, may waive it, and allow the contract or transaction to proceed as though the stipulation or provision did not exist. Waiver of this kind depends upon consent, and the fact that the other party has acted on it is sufficient considera....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n in reliance on the same. 105. As early as in 1957 in the case of Manak Lal vs. Dr. Prem Chand 1957 SCR 575 = AIR 1957 SC 425 an advocate was held guilty for professional misconduct by a Tribunal of Three Members. The matter was argued before the High Court. An objection was taken before the High Court, that one of the members had appeared on behalf of the complainant and therefore, he was disqualified from acting as a member of the Tribunal. A question arose before this Court, that since such an objection was not taken before the Tribunal, whether it amounted to waiver. This Court observed thus: "It is true that waiver cannot always and in every case be inferred merely from the failure of the party to take the objection. Waiver can be inferred only if and after it is shown that the party knew about the relevant facts and was aware of his right to take the objection in question. As Sir John Romilly, M.R., has observed in Vyvyan v. Vyvyan [(1861) 30 Beav 65, 74 : 54 ER 813, 817] "waiver or acquiescence, like election, presupposes that the person to be bound is fully cognizant of his rights, and, that being so, he neglects to enforce them, or chooses one benefit instead ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssed by the single judge of the High Court, upholding the findings of the Tribunal. In an appeal before the Division bench, a plea was taken for the first time, that the workman had accepted the amount paid by the employer and as such, it amounted to waiver by the workman. The Division Bench allowed the appeal and set aside the award passed by the Tribunal and the judgment and order passed by the single judge. Setting aside the judgment of the Division Bench, this Court observed thus: "9. The principle of waiver although is akin to the principle of estoppel; the difference between the two, however, is that whereas estoppel is not a cause of action; it is a rule of evidence; waiver is contractual and may constitute a cause of action; it is an agreement between the parties and a party fully knowing of its rights has agreed not to assert a right for a consideration. 10. A right can be waived by the party for whose benefit certain requirements or conditions had been provided for by a statute subject to the condition that no public interest is involved therein. Whenever waiver is pleaded it is for the party pleading the same to show that an agreement waiving the right ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... device of raising the issue of bias. The issue of bias must be raised by the party at the earliest. (See Pannalal Binjraj v. Union of India [AIR 1957 SC 397] and P.D. Dinakaran (1) v. Judges Enquiry Committee [(2011) 8 SCC 380] .) 39. In Power Control Appliances v. Sumeet Machines (P) Ltd. [(1994) 2 SCC 448] this Court held as under: (SCC p. 457, para 26) "26. Acquiescence is sitting by, when another is invading the rights.... It is a course of conduct inconsistent with the claim.... It implies positive acts; not merely silence or inaction such as involved in laches. ... The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant...." 40. Inaction in every case does not lead to an inference of implied consent or acquiescence as has been held by this Court in P. John Chandy & Co. (P) Ltd. v. John P. Thomas [(2002) 5 SCC 90] . Thus, the Court has to examine the facts and circumstances in an individual case. 41. Waiver is an intentional relinquishment of a right. It involves conscious abandonment of an existing legal right, advantage, benefit, claim or privilege, which except for such a w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....escence must be such as to lead to the inference of a licence sufficient to create rights in other party." 112. Thus, for constituting acquiescence or waiver it must be established, that though a party knows the material facts and is conscious of his legal rights in a given matter, but fails to assert its rights at the earliest possible opportunity, it creates an effective bar of waiver against him. Whereas, acquiescence would be a conduct where a party is sitting by, when another is invading his rights. The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant. Waiver is an intentional relinquishment of a right. It involves conscious abandonment of an existing legal right, advantage, benefit, claim or privilege. It is an agreement not to assert a right. There can be no waiver unless the person who is said to have waived, is fully informed as to his rights and with full knowledge about the same, he intentionally abandons them. 113. In the case of Galada power and Telecommunication limited vs. United India Insurance Company Limited and another (2016) 14 SCC 161, this Court had an occasion to consider the question, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arantee) within the said time. However, we are given to understand that you have been receiving and accepting the bids even after the said date, when no extension of time (filing of Form 'G') was notified. This severely jeopardises our position and is against the spirit of the code, especially when our Resolution Plan was opened immediately (along with the commercials) and subsequently, even discussed at length in the meeting of 15th January, 2019, which was attended by various stakeholders. In this light, we would request you to share with us the requisite notification (Form G) towards extension of time for bid submission at the earliest. However, in the event, such a notification has not been made, it would only be logical that all plans submitted after 8th January, 2019 should be held invalid, more so when our plan has now been opened. We look forward to your confirmation on the above." 118. It could therefore be seen, that immediately within a day of the submission of the plan by Kalpraj, KIAL objected to the acceptance of its plan after 8.1.2019, when no extension of time for the same was notified. It is specifically stated, that the said severely....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd RPs in the event of instances of discrimination or departure from the established law. 122. Perusal of the record would reveal, that RP had replied to KIAL by email dated 11.2.2019. It was stated in the said email, that his act of acceptance of resolution plans, submitted after the due date, was under the overall supervision of CoC and as per the opinion given by CoC's legal counsel and RP's legal counsel. It was also submitted, that this was in the spirit of value maximisation of assets of the Corporate Debtor. 123. It is in dispute, as to whether RP had again directed KIAL and Kalpraj vide email dated 11.2.2019 to submit revised plan. It is asserted on behalf of the KIAL, that such email was received by it, whereas it is denied by RP. In any event, it is not in dispute, that both KIAL and Kalpraj submitted their revised plans on 12.2.2019. 124. On 13/14.2.2019, the resolution plan of Kalpraj was accepted by CoC. On 18.2.2019, RP filed M.A. No.691 of 2019 before NCLT for approval of the resolution plan of Kalpraj. KIAL filed its M.A. No. 1039 of 2019 on 14.3.2019 before the Adjudicating Authority objecting to the approval of resolution plan of Kalpraj. 125. It could....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aised or the claim made by the contractor was not covered by the arbitration clause. No other meaning can be assigned to it. An action taken without prejudice to one's right cannot necessarily mean that the entire action can be ignored by the party taking the same." 129. That leaves us with the last submission in this regard made on behalf of the appellants. It is submitted, that Kotak Bank had participated in the 12th meeting of CoC dated 13.1.2019 and agreed to consider resolution plan of Kalpraj in view of clause 10.4 of the Process Memorandum. It is submitted, that KIAL was a 100% subsidiary of Kotak Bank and as such, its agreement to consider the resolution plan of Kalpraj would amount to waiver and acquiescence by KIAL. 130. This question has been squarely answered by this Court in the case of Vodafone International Holdings BV vs. Union of India and another (2012) 6 SCC 613. It will be apposite to refer to the following observation of this Court: "257. The legal relationship between a holding company and WOS is that they are two distinct legal persons and the holding company does not own the assets of the subsidiary and, in law, the management of the busin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al prepared on the basis of the information memorandum. (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 payment of other debts of the corporate debtor; (b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than- (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under Section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in subsection (1) of Section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with subsection (1) of Section 53 in the event of a liquidat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f creditors shall not approve a resolution plan, submitted before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017, where the resolution applicant is ineligible under Section 29A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it: Provided further that where the resolution applicant referred to in the first proviso is ineligible under clause (c) of Section 29A, the resolution applicant shall be allowed by the committee of creditors such period, not exceeding thirty days, to make payment of overdue amounts in accordance with the proviso to clause (c) of Section 29A: Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the proviso to subsection (3) of Section 12, and the corporate insolvency resolution process shall be completed within the period specified in that subsection.] Provided also that the eligibility criteria in Section 29A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (Ord. 6 of 2018) shall apply to the resolution applicant who has not submitted r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er subsection (1) or within such period as provided for in such law, whichever is later: Provided that where the resolution plan contains a provision for combination, as referred to in Section 5 of the Competition Act, 2002 (12 of 2003), the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors." 136. The aforesaid provisions have been recently considered in three judgments of this Court. The first one, being in the case of K. Sashidhar (supra), to which one of us (A.M. Khanwilkar, J.) was a party, and two other judgments, delivered by three Judges Bench of this Court, in the cases of Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) and Maharashtra Seamless Limited vs. Padmanabhan Venkatesh and others (2020) 11 SCC 467. 137. This Court in the case of Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) has set out the relevant extracts from the Bankruptcy Law Reforms Committee (BLRC) Report of 2015, which read thus: "56. At this juncture, it is important to set out the re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....editors committee will have the power to decide the final solution by ma134 jority vote in the negotiations. The majority vote requires more than or equal to 75 per cent of the creditors committee by weight of the total financial liabilities. The majority vote will also involve a cram down option on any dissenting creditors once the majority vote is obtained. ... The Committee deliberated on who should be on the creditors committee, given the power of the creditors committee to ultimately keep the entity as a going concern or liquidate it. The Committee reasoned that members of the creditors committee have to be creditors both with the capability to assess viability, as well as to be willing to modify terms of existing liabilities in negotiations. Typically, operational creditors are neither able to decide on matters regarding the insolvency of the entity, nor willing to take the risk of postponing payments for better future prospects for the entity. The Committee concluded that, for the process to be rapid and efficient, the Code will provide that the creditors committee should be restricted to only the financial creditors. 5.3.3. Obtaining the resolution to inso....
X X X X Extracts X X X X
X X X X Extracts X X X X
....citly require the repayment of any interim finance and costs of the insolvency resolution process will be paid in priority to other payments; (ii) that the plan must explicitly include payment to all creditors not on the creditors committee, within a reasonable period after the solution is implemented; and lastly (iii) the plan should comply with existing laws governing the actions of the entity while implementing the solutions. 139. The Committee also expressed the opinion, that there should be freedom permitted to the overall market, to propose solutions on keeping the entity as a going concern. The Committee opined, that the details as to how the insolvency is to be resolved or as to how the entity is to be revived, or the debt is to be restructured will not be provided in the I&B Code but such a decision will come from the deliberations of CoC in response to the solutions proposed by the market. 140. This Court in the case of K. Sashidhar (supra) observed thus: "32. Having heard the learned counsel for the parties, the moot question is about the sequel of the approval of the resolution plan by CoC of the respective corporate debtor, namely, KS&P....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subjectmatter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the "commercial wisdom" of the individual financial creditors or their collective decision before the adjudicating authority. That is made nonjusticiable." (emphasis supplied) 142. This Court has held, that it is not open to the Adjudicating Authority or Appellate Authority to reckon any other factor other than specified in Sections 30(2) or 61(3) of the I&B Code. It has further been held, that the commercial wisdom of CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. This Court thus, in unequivocal terms, held, that there is an intrinsic assumption, that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... all aspects of the plan, including the manner of distribution of funds among the various classes of creditors. It has further been held, that CoC is entitled to suggest a modification to the prospective resolution applicant, so that carrying on the business of the Corporate Debtor does not become impossible, which suggestion may, in turn, be accepted by the resolution applicant with a consequent modification as to distribution of funds, etc. It has been held, that what is important is, the commercial wisdom of the majority of creditors, which is to determine, through negotiation with the prospective resolution applicant, as to how and in what manner the corporate resolution process is to take place. 145. The view taken in the case of K. Sashidhar (supra) and Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) has been reiterated by another three Judges Bench of this Court in the case of Maharashtra Seamless Limited (supra). 146. In all the aforesaid three judgments of this Court, the scope of jurisdiction of the Adjudicating Authority (NCLT) and the Appellate Authority (NCLAT) has also been elaborately considered. It will be relevant to r....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is permitted is, as to whether the resolution plan provides: (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) the plan does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. 148. It will be further relevant to refer to the following observations of this Court in K. Sashidhar (supra): 57. ...Indubitably, the remedy of appeal including the width of jurisdiction of the appellate authority and the grounds of appeal, is a creature of statute. The provisions investing jurisdiction and authority in NCLT or NCLAT as noticed earlier, have not made the commercial decision exercised by CoC of not approving the resolution plan or rejecting the same, justiciable. This position is reinforced from the limited grounds specified for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....late Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar" 152. It can thus be seen, that this Court has clarified, that the limited judicial review, which is available, can in no circumstance trespass upon a business decision arrived at by the majority of CoC. 153. In the case of Maharashtra Seamless Limited (supra), NCLT had approved the plan of appellant therein with regard to CIRP of United Seamless Tubulaar (P) Ltd. In appeal, NCLAT directed, that the appellant therein should increase upfront payment to Rs. 597.54 crore to the "financial creditors", "operational creditors" and other creditors by paying an additional amount of Rs. 120.54 crore. NCLAT further directed, that in the event the "resolution applicant" failed to undertake the payment of additional amount of Rs. 120.54 crore in addition to Rs. 477 crore and deposit the said amount in escrow account within 30 days, the order of approval of the 'resolution plan' was to be treated to be set aside. While allowing the appeal and setting aside the directions of NCLAT, this Court observed thus: "30. The appellate authority has, in our opinion, proceeded on equitable....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l actions of RP have the seal of approval of CoC. No doubt, it was possible for RP to have issued another Form 'G', in the event he found, that the proposals received by it prior to the date specified in last Form 'G' could not be accepted. However, it has been the consistent stand of RP as well as CoC, that all actions of RP, including acceptance of resolution plans of Kalpraj after the due date, albeit before the expiry of timeline specified by the I&B Code for completion of the process, have been consciously approved by CoC. It is to be noted, that the decision of CoC is taken by a thumping majority of 84.36%. The only creditor voted in favour of KIAL is Kotak Bank, which is a holding company of KIAL, having voting rights of 0.97%. We are of the considered view, that in view of the paramount importance given to the decision of CoC, which is to be taken on the basis of 'commercial wisdom', NCLAT was not correct in law in interfering with the commercial decision taken by CoC by a thumping majority of 84.36%. 157. It is further to be noted, that after the resolution plan of Kalpraj was approved by NCLT on 28.11.2019, Kalpraj had begun implementing the resolution plan. NCLAT had ....