TaxTMI 
TaxTMI 
2021 (9) TMI 1272
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....s per Section 33(1)(a) of the I&B Code, which was allowed by the 'Adjudicating Authority'. 2. The 'Adjudicating Authority' (National Company Law Tribunal, Chandigarh Bench, Chandigarh) while passing the impugned order in I.A. 412 of 2020 in CP (IB) No.117/Chd/CHD/2017(filed by the Resolution Professional) at paragraph Nos.10 to 17 had observed the following: 10. "Prescribed period for filing application - In the present case.....the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was admitted on 02.02.2018 and the present application is filed by the Resolution Professional on 25.08.2020. The period of 180 days would be completed on 30.10.2018. The period of 180 days would be completed on 30.10.2018. As per order dated 31.10.2019, RP has been directed to place the revised resolution plan before CoC and further directed to complete the process within 90 days. RP has also filed an application seeking additional time for concluding the CIRP process. However, during the pendency, the Resolution Applicant has withdrawn the resolution plan and the application for extension has been frustrated. Hence, no resolution has been passed by CoC and the present ....
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.... effect - The learned authorized representative for applicant has stated that an Application bearing CA No. 1077/2020 dated 20.11.2019 seeking additional time for completion of CIRP with certain other reliefs is pending before this Tribunal. In the instant IA, the applicant also seeks liberty for withdrawal of CA No. 1077/2019 has Resolution Applicant has withdrawn its resolution Plan. 17. In view of the satisfaction of the conditions provided under Section 33(1)(A) of the Code, the corporate debtor Best Foods Limited is directed to be liquidated in the manner as laid down in Chapter III of the Code. Some of the directions are noted as under:- (i) That as per Section 33(5) of the Code and subject to Section 52 of the Code, no suit or other legal proceedings shall be instituted against the corporate debtor. Provided that a suit or other legal proceedings may be instituted by the liquidator on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority. (ii) That the provisions of sub-section (5) of Section 33 of the Code shall not apply to legal proceedings in relation to such transactions as may be notified by the Centra....
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....r' (under Section 9 of the 'I&B' Code, 2016 r/w Rule 6 of the Insolvency and Bankruptcy Application to Adjudicating Authority) Rules, 2016 against the 'Corporate Debtor' and the said Application was admitted on 02.02.2018 for initiating the 'Corporate Insolvency Resolution Process' (CIRP) of the 'Corporate Debtor' etc. Also that Mr. Atul Kumar Kansal was appointed as the 'Interim Resolution Professional' for the 'Corporate Debtor'. 5. It comes to be known that the 'Interim Resolution Professional' of the 'Corporate Debtor' had constituted the 'Committee of Creditors' (CoC) of the 'Corporate Debtor' after collating and verifying all claims received from the creditors of the 'Corporate Debtor'. Later, an Application was filed by the 'Committee of Creditors' of the 'Corporate Debtor' (under Section 22 of the 'I&B' Code). The 'Interim Resolution Professional' was replaced by Mr. Vikram Bajaj, the Respondent as 'Resolution Professional' for the 'Corporate Debtor' as per order dated 17.04.2018 passed by the 'Adjudicating Authority'. 6. The 'Resolution Professional'/ Respondent published Form G and invited 'Expression of Interest' (EOI) from the prospective Resolution Applicants by ....
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....changes effected in the 'Resolution Plan', shared it with the 'Committee of Creditors' for its consideration vide email dated 29.10.2019 with the observations that the Revised 'Resolution Plan' submitted by the 'Resolution Applicant'/ Respondent prima-facie appears to be in conformity with the 'I&B' Code, 2016 and the accompanying rules and Regulations thereunder, notwithstanding that there were certain inconsistencies that need to be sorted out by means of discussion with the 'Resolution Applicant'/ MTC, for which, the 'Resolution Applicant' was 'agreeable'. 10. Through email dated 29.10.2018, the 'Resolution Professional'/ Respondent had informed the 'Resolution Applicant'/ MTC that the 'Committee of Creditors' of the 'Corporate Debtor' was not inclined to consider the 'Revised Resolution Plan' of 'Maritime Trade Corporation', since the same was 'not found feasible' and further the time period for 'Corporate Insolvency Resolution Process' of the 'Corporate Debtor' was almost over, there was no time left in the 'Resolution Process' of the 'Corporate Debtor' to entertain any further 'repetition of a process'. 11. The stand of the Appellant is that the 'Resolution Plan' of the....
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....n of the 'Corporate Debtor' was rejected by the Committee of Members by the requisite majority. Neither any resolution for approval/ rejection of 'Resolution Plan' nor any resolution for liquidation of the 'Corporate Debtor' was passed at the meeting of the 'Committee of Creditors' dated 15.11.2019. 15. With a view to complete the 'Corporate Insolvency Resolution Process' and pending vote of the State Bank of India on the Resolution Plan on 20.11.2019 the 'Resolution Professional'/ Respondent preferred an Application in CA No.1077 of 2019 before the 'Adjudicating Authority' praying for an additional time of 75 days for completion of the 'Corporate Insolvency Resolution Process' of the 'Corporate Debtor' and to permit the 'Committee of Creditors' of the 'Corporate Debtor' to abstain from voting viz the State Bank of India to submit their vote on approval of the 'Resolution Plan' on liquidation of the 'Corporate Debtor' as the case may be. 16. The State Bank of India (one of the 'Financial Creditors' of the 'Corporate Debtor') with a voting share of 53.87% through email dated 07.02.2020 had informed the 'Resolution Professional'/ Respondent that the proposal for approval of the....
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....quidation' of the 'Corporate Debtor' before the 'Adjudicating Authority'. 20. On 01.03.2021, the 'Adjudicating Authority' in I.A. 412 of 2020 passed an order for 'Liquidation' of the 'Corporate Debtor' in directing the Liquidator to take steps for liquidation of the 'Corporate Debtor' as per Regulation 32(A) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016 (Liquidation Regulations). 21. It is the plea of the Appellant that the 'Adjudicating Authority' had committed an error in directing the Liquidator to take steps as per Regulation 32(A) of the Liquidation Resolutions without directing the Liquidator to take appropriate steps as per Regulation 2B and the judgment of this Tribunal in Y. Sivaram Prasad vs. S. Dhanapal & Ors. Vide Co. Appl (AT) (Ins) No.224 of 2018 in which the Liquidator is directed to first call for schemes of compromise and arrangement under Section 230 of the Companies Act, 2013 at the stage of liquidation proceedings of the 'Corporate Debtor' before the sale of 'Assets' of the 'Corporate Debtor' 'collectively' or on a standalone basis in order to keep the 'Corporate Debtor' as a 'going concern' even during the period w....
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....mmittee of Creditors' can always change his opinion to being in favour of the Plan after the voting was first over, subject to the change of opinion taking place within the period of 270 days and the judgment of this Tribunal was upheld by the Hon'ble Supreme Court of India (vide Civil Appeal 3434-3436 of 2019 order dated 15.04.2019) wherein it was observed and held that the 'Committee of Creditors' is empowered to change its decisions on Rejection/ Abstention of 'Resolution Plan'. 27. The Learned Counsel for the Appellant projects an argument that the 'Adjudicating Authority' while passing the impugned order in disregard to the facts and circumstances of the instant case had encroached upon the majority decision of the 'Committee of Creditors', which it does not have the power to, except for the grounds mentioned as per sub-section (a) to (e) of Section 32 of the Code. 28. The Learned Counsel for the Appellant submits that the 'Adjudicating Authority' had failed to observe in the impugned order that the 'Resolution Professional'/ Respondent had filed the application for liquidation of the 'Corporate Debtor' without securing the vote and resolution of the 'Committee of Credit....
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....an' was submitted by the 'Resolution Applicant' for the first time upto 19.03.2020, when the 'Resolution Applicant' withdrew the Resolution Plan subsequent to the approval of the 'Committee of Creditors' and that the aforesaid time period might have been otherwise utilized in exploring possibilities of Resolution of the 'Corporate Debtor', whereas on account of the acts and commission of the Respondent/ 'Resolution Professional', the 'Corporate Debtor' was pushed into Liquidation. Appellant's Citations 32. The Learned Counsel for the Appellant seeks in aid of the judgment of this Tribunal - dated 19.03.2019 (1) Mr. Sharad Sanghi vs. Vandana Garg and others (Com. App (AT) (Ins.) 461 of 2018); (2) Ashutosh Koul and Others vs. DBS Bank Limited and others (Com. App (AT) 464 of 2018); and (3) Appollo Jyoti LLC and others vs. Jyoti Structures Ltd. Through its Resolution Professional, M/s Vandana Garg and Others (Com. App. (AT) (Ins) No.548 of 2018) reported in 2019 SCC OnLine NCLAT page 148 (at special page 7 and 8), wherein at paragraph 14 to 19, 23 to 26, it is observed as under: "14. Whether a member who has already opined, after final decision, can change its opinion o....
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....assed, signed and subsequently uploaded. If the aforesaid period of eight days is excluded, then we find that the 'Resolution Plan' was approved within 270 days which the Adjudicating Authority has failed to notice. 19. We have not counted the actual period, taking into consideration the date when the 'Interim Resolution Professional' had joined. The order of admission having signed and uploaded on 12th July, 2017, after excluding eight days, we hold that the process was conducted within the period. Xxx xxx xxx 23. However, the aforesaid submissions cannot be accepted as at the 'Resolution Process', 'Financial Creditor' claims are decided as per provision of the 'I&B Code'. All the 'Financial Creditors' are treated to be similar, if similarly situated. 24. We have noticed that the Adjudicating Authority has made certain observations with regard to the timeline given by the 'Resolution Applicant'. Learned counsel appearing on behalf of the 'Resolution Applicant' submits that the total period of 15 years will be reduced to 12 years. 25. In view of the aforesaid findings and as we have already held that the 'Resolution Process' took place w....
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.... 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%. 158. 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 heard the appeals on 27.2.2020 and reserved the same for orders. It is not in dispute, that there was no stay granted by NCLAT, while reserving the matters for orders. After a gap of five months and eight days, NCLAT passed the final order on 5.8.2020. It could thus be seen, that for a long period, there was no restraint on implementation of the resolution plan of Kalpraj, which was duly approved by N....
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....ntract Act and common law principles governing contracts, save and except for the specific prohibitions and deeming fictions under the IBC. Regulation 39(3) of CIRP regulations, as it stood before the IBBI (CIRP) (Fourth Amendment) Regulations 2020 and applicable to the three appellants before us, enabled a framework where a draft Resolution Plan would involve several rounds of negotiations and revisions between the Resolution Applicant and the CoC, before it is approved by the latter and submitted to the Adjudicating Authority88. However, this statutorily-enabled room for commercial negotiation is not enough to over-power the other elements of regulation that detract from the view that 88 "(3) The committee shall evaluate the resolution plans received under sub-regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit: Provided that the committee shall record its deliberations on the feasibility and viability of the resolution plans" PART H 112 CoC-approved Resolution Plans are contracts. CoC-approved Resolution Plans, before the approval of the Adjudicating Authority under Section 31, are a....
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.... to a successful Resolution Applicant whose Plan has been approved by the CoC and is awaiting the approval of the Adjudicating Authority. The Insolvency Law Committee Report of February 2020 has recommended the CIRP process to mandate Resolution Plans to provide for the apportionment of the profit or loss accrued by the Corporate Debtor during the CIRP91. These reports are periodically commissioned by the parliament to review the functioning of the Code and suggest amendments. However, if the intention was to view a CoCapproved Resolution Plan as a contract, the principles of unjust enrichment would have been sufficient to address the issue and an amendment may not be considered necessary. A Resolution Applicant, as a third party partaking in the insolvency regime, seeks to acquire the business of the Corporate Debtor without the entirety of its debts, statutory liabilities and avoiding certain transactions with third parties. These benefits are a function of the coercive mechanisms of the IBC which enable a third party to acquire the assets of a Corporate Debtor without its liabilities, for a negotiated amount of the debt that is owed by the Corporate Debtor. Typically, resolution....
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....iples of frustration or force majeure to evade implementation of the Resolution Plan leading to unnecessary litigation. This Court in Amtek Auto (supra), had curbed a similar attempt by a 92 (2020) SCC OnLine SC 1187 PART I 115 successful Resolution Applicant who had relied on a force majeure clause in its Resolution Plan to seek a direction compelling the CoC to negotiate a modification to its Resolution Plan. The Court held that there was no scope for negotiations between the parties once the Resolution Plan has been approved by the CoC. Thus, contractual principles and common law remedies, which do not find a tether in the wording or the intent of the IBC, cannot be imported in the intervening period between the acceptance of the CoC and the approval by the Adjudicating Authority. Principles of contractual construction and interpretation may serve as interpretive aids, in the event of ambiguity over the terms of a Resolution Plan. However, remedies that are specific to the Contract Act cannot be applied, de hors the over-riding principles of the IBC. I Statutory framework governing the CIRP 147. The decision in Essar Steel (supra) while reiterating the rationale of the ....
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....ity 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 extended, the general rule being that 330 days is the outer limit within which resolution of the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation." 159. The CoC has been given wide powers under the IBC. It can direct the Corporate Debtor into liquidation any time before the approval by the Adjudicating PART I 126 Authority, under Section 33(2) of the IBC. Further, under Section 12A of the IBC the Adjudicating Authority may allow withdrawal of the application submitted under Sections 7, 9 or 10 of the IBC for initiation of the CIRP (i....
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....liar to their own case. The broader legitimacy of this course of action can be decided by the legislature alone, since any other course of action would result in a flurry of litigation which would cause the delay that the IBC seeks to disavow. 172. In the wake of the COVID-19 pandemic, several Resolution Plans remained pending before Adjudicating Authorities due to the lockdown and significant barriers to securing a hearing. An Ordinance was swiftly promulgated on 5 June 2020 which imposed a temporary suspension of initiation of CIRP under Sections PART J 143 7, 9 and 10 of the IBC for defaults arising for six months from 25 March 2020 (extendable by one year). This was followed by an amendment through the IBC (Second Amendment) Act 2020 on 23 September 2020 which provided for a carve-out for the purpose of defaults arising during the suspended period. The delays on account of the lockdown were also mitigated by the IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations 2020, which inserted Regulation 40C on 20 April 2020, with effect from 29 March 2020, and excluded such delays for the purposes of adherence to the otherwise strict timelin....
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....ile designing the IBC112 and it is a critical tool for ascertaining legislative choice and intent. Parliament has not introduced an explicit provision under the IBC for allowing any amendment of the Resolution Plan after approval of creditors, let alone a power to withdraw the 108 IV.A.52., page 225, and Recommendation 155: "155. The insolvency law should permit amendment of a plan and specify the parties that may propose amendments and the time at which the plan may be amended, including between submission and approval, approval and confirmation, after confirmation and during implementation, where the proceedings remain open." of the UNCITRAL Guide, supra note 56 109 Ibid. 110 IV. A. 66, page 230 of the UNCITRAL Guide, supra note 56 111 Recommendation 156: "The insolvency law should establish the mechanism for approval of amendments to a plan that has been approved by creditors. That mechanism should require notice to be given to the creditors and other parties affected by the proposed modification; specify the party required to give notice; require the approval of creditors and other parties affected by the modification; and require the rules for confirmation (where confirmation ....
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....ation 40B, the procedure envisages a fifteen-day window between submission of Resolution Plan and its approval or rejection by the Adjudicating Authority. This clearly indicates that the statute envisages a certain PART J 147 level of finality before the Resolution Plan is submitted for approval to the Adjudicating Authority. Even the CoC is not permitted to approve multiple Resolution Plans or solicit EOIs after submission of a Resolution Plan to the Adjudicating Authority, which would possibly be in contemplation if the Resolution Applicant was permitted to withdraw from, or modify, the Plan after acceptance by the CoC. Regulation 36B(4A) requires the furnishing of a performance security which will be forfeited if a Resolution Applicant fails to implement the Plan. This is collected before the Adjudicating Authority approves the Plan. Notably, the regulations also direct forfeiture of the performance security in case the Resolution Applicant "contributes to the failure of implementation", which could potentially include any attempts at withdrawal of the Plan. 177. The binding nature, as between the CoC and the successful Resolution Applicant, of the Resolution Plan submi....
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.... Resolution Plan in relation to a Resolution Applicant between the stage of approval by the CoC and the approval of the Adjudicating Authority. The binding nature of a Resolution Plan on a Resolution Applicant, who is the proponent of the Plan which has been accepted by the CoC cannot remain indeterminate at the discretion of the Resolution Applicant. The negotiations between the Resolution Applicant and the CoC are brought to an end after the CoC's approval. The only PART J 150 conditionality that remains is the approval of the Adjudicating Authority, which has a limited jurisdiction to confirm or deny the legal validity of the Resolution Plan in terms of Section 30 (2) of the IBC. If the requirements of Section 30(2) are satisfied, the Adjudicating Authority shall confirm the Plan approved by the CoC under Section 31(1) of the IBC. 179. If the appellants' claim were to succeed, a clause enabling a Resolution Applicant to withdraw/seek modification for reasons such as a 'Material Adverse Event' could also be set up by a Resolution Applicant when it is being prosecuted under Section 74 (3). It was contended before us that Form H, which is a compliance certificate that is t....
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....on the anvil of the grounds stipulated in Section 30(2) and either approve or reject the plan. The Adjudicating Authority cannot compel a CoC to negotiate further with a successful Resolution Applicant. A rejection by the Adjudicating Authority is followed by a direction of mandatory liquidation under Section 33. Section 30(2) does not envisage setting aside of the Resolution Plan because the Resolution Applicant is unwilling to execute it, based on terms of its own Resolution Plan". Respondent's Contentions 35. In response, the Learned Counsel for the Respondent submits that the Appellant is misrepresenting that the 'Committee of Creditors' had approved a 'Resolution Plan' and in fact, no 'Resolution Plan' was approved by the 'Committee of Creditors' within the 'Corporate Insolvency Resolution' period which came to an end on 15.11.2019. Apart from this, I.A. No. 1077/2019 for an extension of 'CIRP' period was 'Sub-Judice' when 'Sole Resolution Applicant' withdrew his 'Resolution Plan'. Moreover, the Learned Counsel for the Respondent brings it to the notice of this 'Tribunal' that the 'Adjudicating Authority' had noted that in view of the withdrawal of the 'Resolution Plan' ....
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....ajority in terms of the Code, consequent withdrawal of the 'Resolution Applicant' from the 'Resolution Process' through e.mail dated 19.3.2020 and further that the mandated period of 'CIRP' had lapsed on 15.11.2019, the Respondent was left with no option but to project an Application seeking 'Liquidation' of the 'Corporate Debtor' as per Section 33(1)(a) of the Code. 41. At this stage, Learned Counsel for the Respondent projects an argument that Section 12 of the 'I&B' Code, 2016 mandates that 'CIRP' of the 'Corporate Debtor' must conclude within 330 days from the 'Insolvency' commencement date. Also, it mandates that a 'CIRP' which was pending and not completed with the aforesaid period of 330 days, as on the date of commencement of the Amendment Act i.e. 16.8.2019, shall be completed within a period of 90 days from such date, i.e. by 15.11.2019. 42. The Learned Counsel for the Respondent submits that 'Corporate Insolvency Resolution Process' (CIRP) period expired on 15.11.2019 and that the 'Resolution Professional' could not convene a 'Committee of Creditors' Meeting (CoC) meeting and thereafter the CoC had become 'Functous Officio' (vide Judgement in 'Sanjay Kumar Ruia' V.....
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....the Resolution Plan (iv)Issuance of Letter of Intent to Resolution Applicant (v)Acceptance of Letter of Intent by Resolution Applicant and furnishing of Performance Security by the Resolution Applicant (vi)Filing of Application under Section 30(6) by the Applicant." Therefore, it is the clear cut stand of the Respondent that the 'State Bank of India' e.mail dated 7.2.2020 cannot be considered as approval of 'Resolution Plan' by the 'Committee of Creditors', because of the aforesaid steps which were required to be fulfilled as per 'I&B' Code and Regulations made thereunder for taking approval of the 'Committee of Creditors' and making applications u/s 30(6) of the 'I&B Code', 2016 for approval of the 'Adjudicating Authority'. 47. The Learned Counsel for the Respondent points out that the 'Resolution Applicant' is not mentioned as a proper and necessary party in the 'Appeal', while the 'Appeal' is founded on the argument on the plea that the 'Resolution Applicant' could not have withdrawn the 'Resolution Plan' even after the lapse of 'CIRP' period on 15.11.2019 because of the SBI e.mail dated 7.2.2020. As such, it is the stand of the Respondent that t....
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....therefore, as there is no CoC approved 'Resolution Plan' in the instant case on hand and the 'CIRP' period was over, the decision of Hon'ble Supreme Court in the matter of 'Ebix Singapore P. Ltd.' is inapplicable. 52. The Learned Counsel for the Respondent submits that there is material irregularity or 'fraud' committed pertaining to the 'Liquidation' Order and hence prays for dismissal of the 'Appeal' filed by the Appellant. Respondent's Decisions 53. The Learned Counsel for the Respondent refers to the decision of Hon'ble Supreme Court in the matter of 'Committee of Creditors of Essar Steel Ltd. through Authorised Signatory V. Satish Kumar Gupta & Ors.' reported in 2020 8 SCC 531 wherein it is observed and held that while leaving the provision otherwise intact, the term 'Mandatorily' is struck down as being manifestly arbitrarily under 'Article 14 of the Constitution of India' and as being unreasonable restriction on the Litigant's right to carry on business under 'Article 19(1)(g) of the Constitution' and contends that the effect of this declaration is that ordinarily the time taken in relation to 'CIRP' must be completed within the outer limit of 330 days from the Inso....
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....ode. In fact, the Appellant cannot assail the commercial wisdom of the 'Committee of Creditors' which paramount and supreme as held by the Hon'ble Supreme Court in catena of decisions in the case of 'Adhar' V. 'Indian Overseas Bank & Ors.' (Vide Civil Appeal No. 10673/2018) and further that the aforesaid view was affirmed in the decision of Hon'ble Supreme Court in the 'Committee of Creditors of Essar Steel India Ltd.' V. 'Satish Kumar Gupta & Ors.' (Civil Appeal No. 8766 - 67/19) and in the matter of 'Kalpraj Dharamshi & Anr.' V. 'Kotak Investment Advisors Ltd. & Anr.' (Vide Judgement in Civil Appeal No. 2943-2944 of 2020 dated 10.03.2021). Appraisal 57. It transpires that M/s. 'Hajura Singh Bhim Singh' had filed an application for petition as per Section 9 of the 'I&B' Code to initiate 'CIRP' against M/s. 'Best Foods Ltd.' (Corporate Debtor), which came to be admitted on 02.02.2018 and an 'Interim Resolution Professional' 'Mr. Atul Kumar Kansal' was appointed and later on 17.04.2008 through an order the said 'Interim Resolution Professional' was changed and one Mr. Vikram Bajaj came to be appointed as 'Resolution Professional'. 58. In fact, the 'Resolution Professional' ....
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.... Appellant that neither any resolution for approval / rejection of Resolution Plan nor any Resolution for liquidation of the Corporate Debtor (Best Foods Ltd.) was passed at the meeting of the Committee of Creditors that took place on 15.11.2019. 63. The Learned Counsel for the Appellant puts forward a plea that later, through an e.mail dated 07.02.2020, the State Bank of India (possessing the voting share of 53.87%) expressed his approval and in fact, the 'Resolution Plan' was approved by 96.41% voting share, the Committee of Creditors only after applying its commercial wisdom had approved the Resolution Plan of the Resolution Applicant considering the viability and feasibility of the Resolution Plan. Therefore, it is a forceful stand of the Appellant that if a Resolution Plan was approved by the majority of the Committee of Creditors at a particular point of time, the same is not to be allowed to be withdrawn by the Resolution Applicant. 64. The other prime stand of the Appellant is that the Respondent / Liquidator filed IA 412/2020 before the 'Adjudicating Authority' praying for the liquidation of Corporate Debtor without securing the vote and resolution of the Committee o....
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....iquidation. Through a Resolution Plan no individual is purchasing or selling the 'Corporate Debtor' in fact, for selling the 'Corporate Debtor' there is no requirement of a 'Resolution Plan' in the considered opinion of this Tribunal. For approving a plan, there is no requirement of application of mind or voting as the case may be. No wonder, based on a 'Resolution Plan' few rights in the 'Corporate Debtor' or Assets and Liabilities are bartered, and that being an ancillary one as opined by this Tribunal. Submission of Resolution Plan 72. Be it noted, that the ingredients of Section 30 of the 'I&B' Code provides for the manner in which the Resolution Plan may be furnished by a 'Resolution Applicant'. A 'Resolution Applicant' may submit a 'Resolution Plan' to the 'Resolution Professional' who is to scrutinise the same with a view to find out that it fulfils of Section 30(2) of the Code. When the plan in issue, endorses the requirements as per Code, then it is to be projected before the 'Committee of Creditors' for its approval, in terms of the ingredients of Section 30(3) of the Code. Further, this can be approved by the 'Committee of Creditors' by a vote of not less than 66%(....
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....f the I&B Code. 77. It transpires that the Applicant / Resolution Applicant (Maritime Trade Corporation) had filed CA No. 603/2018 in CP(IB)117/Chd/CHD/2017(u/s 60(5) of the I&B Code) before the 'Adjudicating Authority' (National Company Law Tribunal) Chandigarh Bench against the Corporate Debtor (M/s Best Foods) and on 31.10.2019 the 'Adjudicating Authority' had interalia directed the Resolution Professional to convene a meeting of CoC and to place the revised Resolution Plan three option one and option two before the CoC which shall consider the same, vote upon the same and to take appropriate decision either for approving the Resolution Plan or for reiterating its earlier decision for liquidation of the Corporate Debtor etc. Also, it was ordered by the 'Adjudicating Authority' that the entire exercise including filing of an application u/s 31 or conveying the decision of the CoC to reiterate initiation of liquidation process of the Corporate Debtor, as the case may be shall be completed within a period of 90 days from the commencement of the Insolvency and Bankruptcy Code (Amendment Act, 2019) as provided for in the third proviso to Section 12(3) of the Code. 78. In the pr....
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....Plan was approved by the CoC. Keeping in mind that many requirements are to be fulfilled as per I&B Code and Regulations for securing the approval of Committee of Creditors and filing an application as per Section 30(6) of the Code for an approval of the Adjudicating Authority. 84. In the instant Appeal, the Respondent has come out with a stand that the CoC became 'Functuous Officio' on 15.11.2019 pursuant to the lapse of CIRP period and in fact, the discussions on the 'Resolution Plan' after the 'Corporate Insolvency Resolution' period took place between the State Bank of India and the Resolution Applicant and not through the Committee of Creditors in and by which no accord/agreement was arrived at because of the fact the Resolution Applicant had not submitted the Resolution Plan incorporating the changes advised by the State Bank of India and had not accepted the terms for performance guarantee. 85. From the Respondent's point of view, a stand is taken that the 'Committee of Creditors' never approved the 'Resolution Plan', and hence there was no occasion for the issuance of 'Letter of Intent' to the Resolution Applicant / Deposit of performance security / acceptance of Lett....