TaxTMI 
TaxTMI 
2023 (2) TMI 400
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....Advocates for R-1. Mr. Neeraj Malhotra, Sr. Advocate, Mr. R.P. Agrawal, Ms. Vidhisha Haritwal, Mr. Nimish Kumar, Advocates for CoC/R-4, 7, 9 & 12 Mr. Karan Valecha, Advocate for SANKALP (Intervenor). JUDGMENT ASHOK BHUSHAN, J. This Appeal by a Successful Resolution Applicant has been filed challenging the order dated 06.09.2022 passed by the National Company Law Tribunal, Ahmadabad Special Bench (Court-II) rejecting IA No./851/AHM/NCLT/2020 filed by the Resolution Professional for approval of Resolution Plan. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are: (i) The Adjudicating Authority vide order dated 26.04.2019 initiated Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor - Neesa Leisure Limited. (ii) The Resolution Professional ("RP") on 12.03.2020 issued request for submission of the Resolution Plan for the Corporate Debtor. The RP filed an IA No. 304 of 2020 praying for exclusion of time period from completion of the CIRP, which was allowed by the Adjudicating Authority vide order dated 09.07.2020, excluding total period of 146 days. July 20, 2020 was the last date for submission of Resolution Plan. (iii) ....
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....ies. However, order could not be delivered and ultimately after hearing the parties, the Adjudicating Authority has passed the impugned order on 06.09.2022, rejecting the IA No./851/AHM/NCLT/2020. (vii) The Adjudicating Authority by the impugned order sent back the Resolution Plan before the CoC for its reconsideration and further allowed those Resolution Applicants, who had approached the Adjudicating Authority to submit the Resolution Plan. The Adjudicating Authority fixed 22.09.2022 for submission of EMD and the Resolution Applicants were required to submit the Resolution Plan by 10.10.2022. (vii) Aggrieved by the impugned order, this Appeal has been filed by the Successful Resolution Applicant. 3. We have heard Shri Ramji Srinivasan, learned Senior Counsel appearing for the Appellant; Shri Neeraj Malhotra, learned Senior Counsel appearing for CoC/Respondent Nos.4, 7, 9, & 12. Mr. Karan Valecha, learned Counsel for Intervenor and Mr. Mohd. Sahan Ulla, Advocate appearing for Resolution Professional. 4. Shri Ramji Srinivasan, learned Senior Counsel for the Appellant submits that Adjudicating Authority committed error in remitting the Resolution Plan for reconsideration befor....
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.... the Appellant has also relied on few other judgments of this Tribunal in support of his submission, which shall be referred to while considering the submissions in detail. 6. The learned Counsel for the RP submitted that from the very beginning the RP has complied the provisions of the IBC and presented the Resolution Plan to the CoC, which approved the same. Subsequently, other prospective Resolution Applicants like GSEC and Sankalp filed IAs before the NCLT. An email sent by ACRE - Respondent No.4 and IFCI - Respondent No.7 pointing out that proposals contained in the Application filed by GSEC appeared to be better and would result in maximization of value of Corporate Debtor. The Union Bank of India has also sent an email dated 05.03.2021, expressing the same view. The emails also indicated that in view of the normalcy being restored, the business/ leisure travel is on up-swing, which indicate renewed interest in the CIRP of the Corporate Debtor. The RP further submitted that in pursuance of the impugned order, Respondent No.1 has reached out the respective bidders and has received earnest money from seven participants. The RP has further stated that more than 1200 days has pa....
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.... Plan. The judgment of Videocon Industries Ltd.i has no application in the facts of the present case. 9. We have considered the submission of learned Counsel for the parties and have perused the records. 10. While noticing the facts of the case, we have noted that 20.07.2020 was the last date for submission of Resolution Plan. The Appellant filed an Application before the Adjudicating Authority seeking permission to file a Resolution Plan. The Adjudicating Authority passed an order on 07.08.2020 permitting the Plan to be submitted on or before 18.08.2020. It is useful to extract the following part of the order, by which permission was granted to file the Plan, which is as follows: " it is submitted by the Applicant that due to lockdown in COVID-19 pandemic and subsequent restrictions in some places, Applicant could not able to visit the places where the property(s) of the Respondent are situated. Consequent upon which, the Applicant could not able to file his Resolution Plan in time. Hence, learned lawyer for the Applicant is seeking some extension as well as praying for direction upon the RP to submit the Resolution Plan before CoC. To which, learned lawyer appearing for the R....
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....ate to dispose of these appeals giving liberty to the Appellant to raise objection in regard to fairness and transparency of the bidding process and non-adherence to the Statutory Provisions, Rules and Regulations. We order accordingly. With these observations, the appeals are disposed of." 12. Another Appeal was filed by Suspended Director, being Company Appeal (AT) (Ins.) No.806 of 2020 where Suspended Director claimed that he is eligible to submit the Plan. This Tribunal disposed of the Appeal on 15.10.2020, referring to the order passed in Company Appeal (AT) (Ins.) Nos.793 of 2020 (supra) leaving all objections to be raised before the Adjudicating Authority. 13. It is to be noted that aforesaid two orders were passed before the Resolution Plans received in the resolution process were yet to be considered and decided. As noted above, in 14th CoC Meeting the same were considered and approved consequent to e-voting by requisite majority. The Adjudicating Authority in the impugned order has relied on the judgment of the Hon'ble Supreme Court in Bank of Maharashtra vs. Videocon Industries Ltd. & Ors. (supra) while noticing that this Tribunal has held that Adjudicating Authority i....
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....ons of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its assets; and that the interests of all stakeholders including operational creditors has been taken care of. If the Adjudicating Authority finds, on a given set of facts, that the aforesaid parameters have not been kept in view, it may send a resolution plan back to the Committee of Creditors to re-submit such plan after satisfying the aforesaid parameters..." 15. There can be no two opinions about the jurisdiction of Adjudicating Authority and this Tribunal that if the Plan is in violation of any of the provisions of Section 30, sub-section (2), both have ample jurisdiction to interfere with. 16. We may now notice the judgment of the Hon'ble Supreme Court in Ebix Singapore (supra), which has been heavily relied on by the le....
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.... establish that a resolution plan is binding inter se the CoC and the successful resolution applicant. Thus, the ability of the resolution plan to bind those who have not consented to it, by way of a statutory procedure, indicates that it is not a typical contract." In paragraph 162, following has been observed: "162. The BLRC Report has relied on the Uncitral Guide while designing IBC [ 3.3.1, The Report of the Bankruptcy Law Reforms Committee, Vol. 1 : Rationale and Design (November 2015), available at <https://ibbi.gov.in/BLRCReportVol1_04112015.pdf> last accessed 20-8-2021.] and it is a critical tool for ascertaining legislative choice and intent. Parliament has not introduced an explicit provision under IBC for allowing any amendment of the resolution plan after approval of creditors, let alone a power to withdraw the resolution plan at that stage. At the same time, the corporate debtor and the CoC have been empowered to withdraw from the CIRP. If it intended to permit parties to amend the resolution plan after submission to the adjudicating authority, based on its specific terms of the resolution plan, it would have adopted the critical safeguards highlighted by the UNCITR....
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....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 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) 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) IBC." Again in paragraph 171, the Hon'ble Supreme Court held that power of withdrawal or modification after submission of a CoC approved Plan, will have the effect of disturbing the statutory timelines and delaying the CIRP. Following observations have been made in paragraph 171: "171. .....The recognition of a power of withdrawal or modification after submission of a CoC-approved resolution plan, by judicial interpretation, will have the effect of disturbing the statutory timelines and delaying the CIRP, leading to a depletion in the val....
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.... any. All such interested applicants, who still wish to file their resolution plans should deposit prescribed EMD by 22.09.2022 and submit resolution plans thereof on or before 10.10.2022. The RP should place these plans before the CoC for its reconsideration as per the procedure prescribed under the Code. The CoC by using its commercial wisdom for maximising the value of assets of the corporate debtor for benefitting all stakeholders shall consider all plans. The entire exercise of reconsideration/voting/approval should be completed by 10.11.2022. The CIRP period is extended accordingly till 15.11.2022. In view of a Resolution Plan being sent back to CoC for reconsideration along with other interested Resolution Applicants including those who have also sought permission to submit their plans by filing various applications, which are pending consideration, we have not heard the present resolution plan on merits and for compliances. The application is disposed of without considering the prayers made therein with the aforesaid directions to be complied or adhered to, for better possibility/prospects of a resolution of Corporate Debtor and maximization of value of assets of Corporat....
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....05.2020 and after completion of 'CIRP' period and the said Respondents are nowhere in the zone of consideration in entire CIRP process, amounting to reopening of the CIR process of the 'Corporate Debtor' and the said direction also frustrates the resolution process of the 'Corporate Debtor', which is a time bound. 40. It is apt to note that the once Resolution Plan is approved by the 'CoC' with requisite voting share i.e. 66%, in the present case, the 'CoC' voted with 100% voting share in approving the Resolution Plan and the same is binding and irrevocable as between the 'CoC' and the 'Successful Resolution Applicant' as held by the Hon'ble Supreme Court in Ebix Singapore Pvt. Ltd. Vs. Committee of Creditors of Educomp Solutions Ltd. reported in (2021) SCC Online SC 707 at para 246 held as under: "246. In the present framework, even if an impermissible understanding of equity is imported through the route of residual powers or the terms of the Resolution Plan are interpreted in a manner that enables the appellants' desired course of action, it is wholly unclear on whether a withdrawal of a CoC-approved Resolution Plan at a later stage of the process would result in the Adjudic....
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....en received subsequent to approval of the Resolution Plan in the interest of the maximization of the value of the Corporate Debtor, which is the object of IBC, Adjudicating Authority did not commit any error in giving an opportunity to consider such offers. 23. The IBC and the CIRP Regulations provide a tight scheme and timeline for completion of entire process. In the present case, we have noticed that CIRP period had come to an end and by order dated 09.07.2020 an extension was granted by the Adjudicating Authority of 146 days. The extended period was also come to an end in October 2020. The CIRP period had come to an end and by an order passed on 09.11.2020, the Adjudicating Authority granted three weeks' time for filing of Resolution Plan before it. The period of CIRP was over long ago and Adjudicating Authority after about two years, subsequent of completion of CIRP period cannot direct the CIRP process to begin again by providing for inviting applications for fresh Resolution Plan. 24. The maximisation of value of the Corporate Debtor is admittedly an object of the CIRP, but the said maximisation has to be achieved within the timeline provided in the scheme. 25. The presen....