TaxTMI 
TaxTMI 
2022 (2) TMI 1254
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....objectin Resolution Plan : E. Om Prakash, Senior Advocate B. Dhanaraj, Advocate (For RP of RISPL) R. Murari, Senior Advocate Cibi Vishnu, Advocate (for ARCIL) P.S. Raman, Senior Advocate Vidya, Advocate (for Applicant in Inv.P/11/2021) P. Mohan Prasad, Advocate (for Applicant in Inv.P/13 & 14/2021 COMMON ORDER Per: Justice (Retd.) S. RAMATHILAGAM, MEMBER (JUDICIAL) Under adjudication is an application filed by the Resolution Professional in respect of the Corporate Debtor viz. Regen Powertech Private Limited under Section 30(6) of Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as "IBC, 2016") seeking approval of Resolution Plan submitted by the Resolution Applicant viz. Renew Power Services Limited which was approved by the CoC in its 13" CoC meeting held on 03.04.2021. 2. OTHER APPLICATIONS: 2.1. The following intervening Petitions has been filed as objections to the Resolution Plan: a) Inv.6/IB/CHE/2021 b) Inv.7/IB/CHE/2021 c) Inv.11/IB/CHE/2021 d) Inv.13/IB/CHE/2021 e) Inv.14/IB/CHE/2021 2.2. Inv.6/IB/CHE/2021 is filed by the Resolution Professional in respect of the Regen Infrast....
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....d another in Tamil ("The Hindu") on 15.12.2019 and also in "Andhra Prabha" (Telugu) daily on 16.12.2019. 3.3. Thereafter the IRP took control and custody of the Corporate Debtor and it is stated that the Applicant has taken steps under Section 25 of the IBC, 2016, and also reviewed the production of stock in respect of the Corporate Debtor. In pursuance of the publication announcement being made, it. was submitted that the Applicant received claims from the various creditors and accordingly constituted the Committee of Creditors (CoC) in the following manner: S. No NAME OF THE FINANCIAL CREDITOR TOTAL CLAIM FILED DETERMINED CLAIM % OF VOTING SHARE 1 State Bank of India 802,53,76,258 802,53,76,258 51.56 2 Canara Bank 288,23,63,476 288,23,63,476 18.52 3 Axis Bank 125,68,66,009 125,68,66,009 8.08 4 Indian Overseas Bank 77 ,26,59,307 77,26,59,307 4.96 5 Standard Chartered Bank 12,67,74,320 12,67,74,320 0.81 6 L&T Infra Investment Partners 70,13,51,231 56,86,97,721 3.65 7 L & T Finance Limited 238,17,94,723 193,13,02,279 12.41 TOTAL CLAIM OF FINAN....
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....journed on 25.06.2020. In the 4". CoC meeting, it is seen that the Applicant has discussed about the difficulty faced by him in operating the factory during the pandemic and also there is no business operations in the Corporate Debtor Company from 25.03.2020. The Applicant has also apprised the CoC that he has received the Expression of Interests from the following persons: a) Renew Power Services Private Limited; b) Rajalakshmi Renewable Energy Limited; c) CFM Asset Reconstruction Private Limited; 3.8. It was submitted in the said CoC meeting after a detailed discussion, the final list of prospective Resolution Applicants was placed before the CoC and also the CoC fixed the last date for the submission of the Resolution Plan as 30.07.2020. It is also seen that the Applicant has issued the Information Memorandum to the final prospective Resolution Applicant on 30.06.2020. 3.9. However, it was submitted that the prospective Resolution Applicants have requested for extension of time to submit the Resolution Plan citing human constraints due to Covid-19 lockdown and by taking into consideration the said fact, the CoC in its 5 CoC meeting he....
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....ng was held on 05.02.2021, wherein a detailed discussion about the modification of the Resolution Plan with the prospective Resolution Applicants was discussed and the prospective Resolution Applicants were directed to submit the revised Resolution Plan before the CoC on or before 10.02.2021. However, it is stated the revised Resolution Plan was submitted only by M/s. Renew Power Services Private Limited in the 11 CoC meeting on 26.02.2021 and another prospective Resolution Applicant namely M/s. Rajalakshmi Wind Energy Limited has not submitted the Resolution Plan to the Applicant within the due date. 3.14. It was submitted that the CoC in its 12" meeting held on 04.03.2021, 05.03.2021 & 06.03.2021 discussed about the modifications of the resolution plan submitted by the prospective Resolution Applicant viz. Renew Power Services Private Limited in detail and after detailed discussions and deliberations made in the CoC meeting, the CoC in its 13 CoC meeting held on 03.04.2021 has put for vote the Resolution Plan submitted by the Renew Power Services Limited. The last date for e-voting was fixed as 24.03.2021 and accordingly the CoC with the 94.08% has voted in favour of the....
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....A 65,00,00,000/- II Tranche & Final Tranche-61.20% of the Resolution Plan amount Balance 60 days from the date of approval by AA 102,50,66,000/- 5. OBJECTIONS TO THE RESOLUTION PLAN The objections to the resolution plan can be categorized in the following manner; (i) Objections raised by RP of RISPL. (ii) Objections raised by customers of RISPL (iii) Objections raised by other Operational Creditors and Financial Creditors Regen Infrastructure and Services Private Limited ("RISPL") is a wholly owned subsidiary of M/s. Regen Powertech Private Limited ("RPPL"). RISPL was admitted into Corporate Insolvency Resolution Process by this Tribunal vide its order dated 19.02.2020 passed in IBA/1424/2019 and one Ms. Renuka Devi Rangaswamy was appointed as Interim Resolution Professional, who was confirmed as the "Resolution Professional" in the 3 meeting of the CoC held on 21.09.2020. 5.1. OBJECTIONS RAISED BY RP oF RISPL 5.1.1 That the proposed Resolution Plan is prejudicial to public interest and against well settled principles of law and seeks to destroy the business of RISPL which is a Subsidiary of RPPL. 5.1.2 That....
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....Registered Office. Inspite of numerous requests and repeated reminders to the Ex-Directors, they were not willing to come forward to provide the records and cooperate with this Applicant. Therefore, the Applicant was constrained to file TA/1040/2020 under Sec.19(2) of IBC,2016. 5.1.7 That the Applicant had also sought for information from the Respondent herein, the Resolution Professional of RPPL, in relation to the Know-how License and Technical Assistance Agreements entered with Vensys Energy AG, Saarbruecken (Germany). Strangely, the Respondent did not share the Agreements until the copy of the Agreements were filed before the Mediator appointed by this Tribunal. 5.1.8 That on going through the various Applications filed by RISPL Customers, where in some cases RPPL is also made a party, the Applicant came to understand the impact of the Knowhow License and Technical Assistance Agreements entered with Saarbruecken (Germany). 5.1.9 That the crux of the said Agreements is that RPPL is vested with the rights to use the Know- how technology provided by Vensys Energy AG and RPPL is entitled to assign its right under the said Agreements to RISPL. In short, RI....
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....Companies have entered into Agreements with both RPPL and RISPL for replacement, service, operation and maintenance. In the event of default by RPPL, RISPL is required to honour the same and vice versa. In the event RISPL is unable to service the customers, the RPPL undertook to carry out the service of Generators. The failure of RPPL to service RISPL customers has resulted in liquidated damages being slapped on RISPL. The failure of expected Wind Power Generation from the WEGs manufactured by RPPL, also entitles the WEG Customers to slap damages against RISPL. 5.1.14. That in these circumstances, if the Standalone Resolution Plan of the PRA is sanctioned, the affected parties are not only the Stakeholders of RISPL but also the Third-Party Public Customers and indirectly the Banks which funded the purchase of WEGs also will not be able to realize their dues. In addition to the above, the shutting down of most of the WEGs in view of the threat of closure of RISPL's business impacts the Nation's capacity to generate wind energy. Thus, on all counts, the Resolution Plan is prejudicial to the public and against public policy. 5.1.15. Without prejudice to the above, it....
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....which provides that a Notice of each Meeting of the Committee of Creditors be given' by the' Resolution Professional to Operational Creditors or their representatives if the amount of their aggregate dues is not less than 10% of the Debt. In the matter of Rajputana Properties (.P) Ltd., vs. Ultra Tech Cement Ltd., and Others (1.A.No.594 of 2018 in Company Appeal (AT) Insolvency No.188 of 2018), the Hon'ble National Company Law Appellate Tribunal, New Delhi has recorded in its Order dated 15.05.2018 the following observations, that insists on transparency and to value the opinion of persons without voting rights including that of the Operational Creditors. In the context of approving or rejecting a Resolution Plan, the intent of the legislature to follow a transparent procedure is clear. 5.2.3 That the Applicant states that 10% of the Representation has not been provided for and is in violation of the Code. Hence, the approval of the Resolution Plan by the COC is vitiated and bad in law. 5.2.4 That there is a lack of transparency with respect to the details of the subsidiaries of the Corporate Debtor. It was submitted that the minutes of the COC meeting do not prov....
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....the RP in its 10th CoC meeting suggested for payment of Compensation / Settlement instead of going through legal process by obtaining the permission of Joint Commissioner of Labour for such Retrenchment of Employees. The question which is raised by the Applicant is that whether the Retrenchment cost should form part of the Resolution Plan amount or that the same should be taken out of the Cash Accruals or any other Revenue of the Company during the CIRP. In the present case, it was submitted that the Retrenchment cost to be spent from the earnings during CIRP is a Preferential Treatment by way of allocating fund to certain class of creditors, which is against the spirit of the Code and nowhere, the same shall become part of the CIRP cost. 5.2.9 It was submitted that there was non-adherance to the provisions of IBC, 2016 and the publication of Expression of Interest in Form G has not been made by the RP as required under Regulation 36A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. It was submitted that, considering that the Corporate Debtor has business operations in various parts of India, it would have been appropriate to publi....
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.... 5.3.5 It was submitted that the established fact remains that all the original supply and maintenance agreement of the objector was executed with the Corporate Debtor alone and the purpose of assignment and reorganizing the operating structure of the Corporate Debtor was to ensure that the ground operations and maintenance could be effectively governed through a separate entity whereas, the pare still retained exclusive control over the repairs, equipment control, access to factory premises etc. 5.3.6 It was submitted that the Resolution Plan fails to look at the underlying structure between the parent and its subsidiaries. Further, the manner of approval by the Committee of Creditors too is questionable and all the stakeholders are aware of the two simultaneous CIRP process pending before this Tribunal against the Corporate Debtor and its wholly owned subsidiary. 5.3.7 It was submitted that it was beyond comprehension for the subsidiary of RPPL to even survive or secure the repair equipment for the infrastructure installed in their respective wind farms. Further, it was submitted that the Resolution plan leave the objector stranded with no contractual r....
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....n of Interest and has received the Resolution Plan, and the very fact proves that RISPL can survive without the Corporate Debtor. 6.4. It was submitted that the very basis of CIRP and Resolution plan is on the concept of clean slate as noted by the Apex Court and no Resolution Applicant who is pumping in money would want to be saddled with all obligations of the Corporate Debtor. 6.5. In relation to the contention of the RP of RISPL that the Resolution Plan seeks to deal with the assets in the custody of RISPL as a Lessee, it was submitted that the said claim is high untenable as no Resolution Plan of one Corporate can deal with the assets of another entity. In this context, it was submitted that whatever rights are vested with RISPL by way of leases etc., are bound to continue as per law and RISPL is wholly entitled to act by due process of law to recover any assets, if legally taken over by the Corporate Debtor as alleged. It was submitted that the Resolution Plan does not and cannot in any way seek to vest rights on RPPL over any assets of RISPL or assets of the subsidiary as the Resolution Plan can deal only with the assets of the Corporate Debtor. 6.....
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....ed the customer will get services, as evidently there will be no one to service. In any event it was submitted that the guidelines cannot override the provisions of IBC, 2016. 6.9. It was also contended that if the Resolution Plan is rejected and if RPPL is ordered for liquidation, which is the only alternative then there would be no one available to ensure that the services are provided and as such if the Applicant is serious about obtaining services for the WEG purchased from RPPL it cannot be objecting to the approval of the Resolution Plan of RPPL. 6.10. It was submitted that the provisions of the Code and Regulations do not envisage any representative of disparate Operational creditors being made an invitee to the CoC. It only envisages that representatives of such Operational Creditors who are more than 10% of the total debt would be invited to the CoC. Pointedly there is no provision in the Code to allow unconnected Operational Creditors to nominate a representative for them at the COC nor is there any procedure mandated for the Resolution Professional to select such representative. Even at the most stretched interpretation of the Code and Regul....
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.... The Applicant not being an expert in these matters should not venture into second guessing the decisions of the COC. As if any additional amounts are received it would only flow to the COC member banks and as such the COC member banks have taken all steps to maximize realisation from the Resolution plan. 7. REPLY AND WRITTEN SUBMISSION OF COC oF RPPL 7.1. It was submitted that as on date, the objectors to the Resolution Plan are only customers of RISPL and not of RPPL and the nature of relief sought for in their main applications are for specific performance of a contract. Further, it was submitted that the basis of these claims are based on equity and assumption that they will be put to irreparable loss and in an insolvency proceedings, several players lose out because primary importance is given to the revival of the Company and the said decision is entirely vested upon the CoC. 7.2. Reliance was placed upon the Judgment of the Hon'ble Supreme Court in the matter of India Resurgence ARC Limited -Vs- Amit Metaliks Limited and Another; (2021) SCC Online SC 409 to state that "Jn other words in the scheme of IBC, every dissatisfaction does not partake the charac....
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....ant multiple times based on the suggestion of the CoC. 8. FINDINGS OF THIS TRIBUNAL 8.1. In so far as the objections raised by the purported Operational Creditors in respect of the Corporate Debtor is concerned, it is seen that this Tribunal already vide its order dated 01.11.2021 has dealt in detail as regards the contention raised by the alleged Operational Creditors and has rendered its finding which is as follows; "5.6. As already alluded supra, the status of the Applicants who have filed the present Application is that they are the customers of RPPL or RISPL. We have gone through the Application filed by the Applicants and in all the Applications the status of their claim filed with the RP has not been disclosed by the Applicants. Further, from the nature of transactions that happened between the Applicants and the respective Corporate Debtor viz. RPPL and RISPL, it is clear that Applicants herein cannot be treated as an "Operational Creditor" in relation to the Corporate Debtors. Sec. 5(20) and 5(21) of IBC, 2016 defines the term "Operational Creditor" and "Operational debt", which is extracted hereunder; (20) "operational creditor' means ....
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....idiary Company to be treated along with that of the holding Company. While this being the position of law in relation to holding and subsidiary company under IBC, 2016, the next question which arises for consideration is that de hors the said statutory provision, whether this Tribunal can order for consolidating the assets of the holding and subsidiary company together and thereby order for consolidated CIRP in relation to RPPL and RISPL. 5.10. We have gone through decisions in regard to Consolidation of CIRP ordered by the NCLT Mumbai Bench in the Videocon case (supra) and by the Hon''ble NCLAT in the matter of Radico Khaitan (supra) and also in Oase Asia Pacific Pte. Ltd. (supra). It need not be emphasized that the provisions of IBC, 2016 does not specifically authorize consolidation of CIRP and as already discussed above, the provisions of IBC, 2016 treat the assets of the holding and subsidiary independently. It is seen that the NCLT Mumbai Bench by placing reliance on several US and UK case laws, one of which being the case of Food Fair Inc., In re; 10 BR 123 (1981), where the Bench held that the key factor for granting substantive consolidation of all debtors is requ....
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....interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. 5.13. Thus, we can see that a broad and equitable power has been conferred under Section 105(a) of the US Bankruptcy Code, which authorizes the Court to issue "any order, process or judgment". However, in so far as the Indian Bankruptcy law is concerned, similar powers have been conferred under Section 60(5)(c) of IBC, 2016, which are as follows; 60. Adjudicating Authority for corporate persons. - (5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of - (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and (c) any question of priorities or any question of law or facts, arising out of or in relation....
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....he Adjudicating Authority under Section 31(1) is to determine whether the resolution plan, as approved by the CoC, complies with the requirements of Section 30(2). The NCLT is within its jurisdiction in approving a resolution plan which accords with the IBC. There is no equity-based jurisdiction with the NCLT, under the provisions of the IBC. 30. The jurisdiction which has been conferred upon the Adjudicating Authority in regard to the approval of a resolution plan is statutorily structured by sub-Section (1) of Section 31. The jurisdiction is limited to determining whether the requirements which are specified in sub-Section (2) of Section 30 have been fulfilled. This is a jurisdiction which jis statutorily-defined, recognised and conferred, and hence cannot be equated with a jurisdiction in equity, that operates independently of the provisions of the statute. The Adjudicating Authority as a body owing its existence to the statute, must abide by the nature and extent of its jurisdiction as defined in the statute itself. 47. These decisions have laid down that the jurisdiction of the Adjudicating Authority and the Appellate Authority cannot extend into entering upo....
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....pproval of Resolution Plan and hence the same cannot be applied to the facts of the present case. However, we are unable to accept the said contention, in view of the fact that the ratio decidendi which has been laid down in the above referred Judgment is that in order to exercise an 'equity jurisdiction', the same has to be conferred under the statutory framework i.e. under the provisions of IBC, 2016. 5.17. Further, as emphasised by the Hon'ble Supreme Court in the Judgment referred supra, the Indian Bankruptcy Code, has consciously did not confer any independent equity-based jurisdiction on the Adjudicating Authority. As a corollary thereof, if there is no equity-based jurisdiction available under the provisions of the IBC, 2016, then the consolidation of CIRP of group companies, in the absence of specific provisions under IBC, 2016, cannot be ordered by this Adjudicating Authority. 5.18. Further, it is also significant to point out here that, the Hon'ble Supreme Court, while dealing with the Indian Insolvency Laws, after examining the judicial interventions and innovations made under the provisions of IBC, 2016 by the Adjudicating Authority and also by the....
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....ce again, we must clarify that our observations here are not on the merits of the issue, which has not been challenged before us, but only limited to serve as guiding principles to the benches of NCLT and NCLAT adjudicating disputes under the IBC, going forward. (emphasis supplied) 5.19. Thus, it is also seen that the Hon'ble Supreme Court after examining the provisions of IBC has stated that IBC is a carefully considered and well thought out piece of legislation which sought to shed away the practices of the past. Further, it has been stated that the legislature has also been working hard to ensure that the efficacy of this legislation remains robust by constantly amending it based on its experience. Consequently, the need for judicial intervention or innovation from the NCLT and NCLAT should be kept at its bare minimum and should not disturb the foundational principles of the IBC. 5.20. Another raison d' etre on why this Adjudicating Authority is not in favour of ordering for consolidation is that in the cases referred to by the Learned Senior Counsels for the Applicants are that the major Financial Creditors have moved an application for consolidation of CIR....
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....voted by the CoC of RPPL, the Applicants, who are all customers of RISPL have moved the present Application seeking consolidation of CIRP in relation to the Corporate Debtors viz. RPPL and RISPL. As already alluded supra the Resolution Plan in respect of RISPL is also in the offing and it cannot be said that the creditors of RISPL, let alone the customers, would be left in lurch in the present scenario. 8.2. Thus, the objections raised by the alleged Operational Creditors is already answered by this Tribunal in the Consolidation Application vide its order dated 01.11.2021 and need not be gone further into by this Tribunal. 8.3. In so far as the objections raised by the one of the Financial Creditor who has withdrew his claim viz. ARCIL it was submitted that the said Financial Creditor originally submitted his claim before the RP in respect of the Corporate Debtor and subsequently withdrew their claim with the RP on the basis of the Judgment of the Hon'ble NCLAT in the matter of Vishnu Kumar Agarwal -Vs- Piramal Enterprises Limited, wherein it was held that the proceedings could not be initiated simultaneously against the Corporate Debtor and the Guarantor. Hence b....
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....r negotiations with the said prospective Resolution Applicants to increase their offer. Thus, it could be seen that a Financial Creditor cannot be allowed to file its claim at any time during the CIRP period in respect of a Corporate Debtor as it would adversely upset the timelines and would not bring CIRP to a logical conclusion and would lead to perpetuality. Further, in the present case, the Applicant / alleged Objector is not even a member of the CoC cannot raise any objection to the present Resolution Plan in respect of the Corporate Debtor. 8.6. In relation to the objections raised by the RP of RISPL, which is the subsidiary of the Corporate Debtor, which is also under CIRP, it is seen that the RP of RISPL has raised the same issues that were raised by it at the time of consolidation / simultaneous CIRP in respect of the Corporate Debtor and as already adumbrated supra, the said contentions were rejected by this Tribunal vide its order dated 01.11.2021. Further, the RP of RISPL cannot seek to canvass the same points over and over during the approval of the Resolution Plan. It is also evident that the Resolution Plan for the subsidiary Company are already received and....
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....Creditors in the event of a liquidation of the Corporate Debtor under Sec. 53 Clause 5.2.2 deals in detail about the Discharge of the Operational Creditors Liabilities in detail. Reg. 38(1) - Resolution Plan identifies specific source of funds that will be used to pay the (a) Insolvency Resolution Process cost? (b)Liquidation value due to Operational Creditors? (c) Liquidation value due to dissenting financial creditors Clause 5.8 of the Resolution Plan deals with the Means of Finance of the Resolution Applicant for implementation of the Resolution Plan. Rea. 38(1A) - Resolution Plan shall include a statement as to how it has dealt with the interest of all the stakeholders, including financial creditors and operational creditors of the Corporate Debtor Clause 10 of the Resolution Plan enumerates how the interest of all the stakeholders including operational and financial creditors has been dealt with under the Resolution Plan. S. 3(2)(c) - Management of the affairs of the Corporate Debtor after approval of the Resolution Plan Clause 5.6 of the Resolution Plan deals with the Management and Control and Implementation of Terms in relation to the Resolutio....
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....of change in ownership, etc. as provided in Clause 5.2.8 (a) of the resolution plan. Granted, subject to the provisions of IBC, 2016 and other Applicable laws. 2 Contracts with the customers of the Corporate Debtor: The customer contracts as defined in clause 5.2.8 (b)of the resolution plan, subsisting as of the Transfer Date shall be deemed to be terminated (unless within 90 (ninety) days from the Transfer Date, the Corporate Debtor expressly notifies the counterparty to any such Customer Contract in writing that such Customer Contract will continue to operate on the terms therein) without any claim for restitution, specific performance or damages of any nature whatsoever and all liabilities, damages or claims arising from the Customer Contracts, in relation to any period prior to the Transfer Date, or on account of the measures contemplated under the resolution plan including termination of these Customer Contracts shall, be deemed to be permanently extinguished by virtue of the order of the Adjudicating Authority approving this Resolution Plan. Further, by virtue of the business transfer agreement dated March 5, 2014 ("Business Transfer Agree....
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.... Granted, subject to the provisions of IBC, 2016 and other Applicable laws. 5 Upon approval of the Resolution Plan by the Adjudicating Authority, except for the continued litigations as mentioned in clause 5.2.10 of resolution plan, all inquiries, investigations, proceedings, whether civil or criminal, notices, causes of action, suits, claims, disputes, litigation, arbitration or other judicial, regulatory or administrative proceedings, against, or in relation to, or in connection with the Corporate Debtor, pending or threatened, present or future, in relation to any period prior to the Transfer Date or arising on account of the transaction herein shall stand withdrawn and dismissed and all liabilities or obligations thereto, whether or not set out in the books of the Corporate Debtor, will be deemed to have been written off in full and permanently extinguished and the Corporate Debtor or the Resolution Applicant shall, at no point of time be, directly or indirectly, held responsible or liable in relation thereto notwithstanding any adverse order that may have been passed in respect of the same by any relevant authority. Granted in terms of the judgment o....
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....is called upon to consider the resolution plan under Section 30(4) of the I&B Code after it is verified and vetted by the resolution professional as being compliant with all the statutory requirements specified in Section 30(2). 62. ..... In the present case, however, we are concerned with the provisions of I&B Code dealing with the resolution process. The dispensation provided in the I&B Code is entirely different. In terms of Section 30 of the I&B Code, the decision is taken collectively after due negotiations between the financial creditors who are constituents of the CoC and they express their opinion on the proposed resolution plan in the form of votes, as per their voting share. In the meeting of the CoC, the proposed resolution plan is placed for discussion and after full interaction in the presence of all concerned and the Resolution Professional, the constituents of the CoC finally proceed to exercise their option (business/commercial decision) to approve or not to approve the proposed resolution plan. In such a case, nonrecording of reasons would not per-se vitiate the collective decision of the financial creditors. The legislature has not envisaged challenge to ....
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....e Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution plan under Section 30(4) of the I&B Code. The subjective satisfaction of the financial creditors at the time of voting is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution ~ plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code. 58. Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resojution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with Section 31(1) of the I&B Code. N....
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....ile approving a resolution plan may thus be looked at by the Adjudicating Authority only from this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal." (emphasis supplied) 14. The Supreme Court in its recent decision in Jaypee Kensington Boulevard Apartments Welfare Association &ors. v. NBCC (India) Ltd. &Ors in Civil Appeal no. 3395 of 2020 dated 24.03.2021 has held as follows; 76. The expositions aforesaid make it clear that the decision as to whether corporate debtor should continue as a going concern or should be liquidated is essentially a business decision; and in the scheme of IBC, this decision has been left to the Committee of Creditors, comprising of the financial creditors. Differently put, in regard to the insolvency resolution, the decision as to whether a particular resolution plan is to be accepted or not is ultimately in the hands of the Committee of Creditors; and even in such a decision making process, a resolution plan cannot be taken as approved if the same is not approved by votes of at least 66% of the voting share of fi....
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.... scheme of the Code, would always be subjective in nature and the question, as to whether a particular resolution plan and its propositions are leading to maximisation of value of assets or not, would be the matter of enquiry and assessment of the Committee of Creditors alone. When the Committee of Creditors takes the decision in its commercial wisdom and by the requisite majority; and there is no valid reason in law to question the decision so taken by the Committee of Creditors, the adjudicatory process, whether by the Adjudicating Authority or the Appellate Authority, cannot enter into any quantitative analysis to adjudge as to whether the prescription of the resolution plan results in maximisation of the value of assets or not. The generalised submissions and objections made in relation to this aspect of value maximisation do not, by themselves, make out a case of interference in the decision taken by the Committee of Creditors in its commercial wisdom 78. To put in a nutshell, the Adjudicating Authority has limited jurisdiction in the matter of approval of a resolution plan, which is well defined and circumscribed by Sections 30(2) and 31 of the Code read with the par....