TaxTMI 
TaxTMI 
2022 (1) TMI 1415
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....Mr. Rajendra Barot Ms. Neerja Balakrishnan, and Ms. Apoorva Gupta, Advocates. For the Respondent : Mr. Abhinav Vasisht, Sr. Advocate Ms. Meghna Rajadhyaksha with Ms. Radhika Indapurkar, Mr. Vaijayant Paliwal, Mr. Bryan Pillai, Mr. Anoop Rawat, Mr. Zeeshan Khan, Ms. Moulshree Shukla, Ms. Priya singh, Ms. Ishani Mookherjee Advocates for RP, R-1. Mr. Gopal Jain, Sr. Advocate with Mr. Diwakar Maheshwari, Mr. Karan Mehta and Ms. Shreyas Edupuganti, Advocates for R-2. Mr. Tushar Mehta, Solicitor General, with Biswajit Dubey, Ms. Surabhi Khattar and Mr. Madhav Kanoria Mr. Kanu Agarwal and Mr. Prafful Goyal Advocates for COC. JUDGMENT DR. ASHOK KUMAR MISRHA, TECHNICAL MEMEBR Contents: SL No. Particulars Para No. Page No. A. Brief Background 04-08 12-16 B. Submissions by the parties 09-18 17-174 C. Analysis of facts, law and reasons 19-49 174-212 D. Conclusion 50 213 1. All these appeals have been filed by the 'Appellants' under Section 61 of the 'Insolvency and Bankruptcy Code, 2016' (in short 'Code') against the impugned order dated 08.06.2021 passed by the 'Adjudicating Authority' (National Company Law Tribunal, Mumbai Bench, Court No.II at Mumbai) in IA ....
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....from the 'Appeal Paper book' that VIL and its other group companies (12 domestic subsidiary) and their lenders entered into a 'Syndicated Rupee Term Loan Agreement' dated 08.08.2012 as-obligor - co-obligator on the one hand and the banks and financial institutions as the group of lenders with SBI as Facility Agent and SBICaps Trustee Company Limited as the onshore Security Trustee. Entities of Videocon group with respective orders were under CIRP and the action taken by the lead bank i.e. SBI under Section 7 of the Code and few companies who are also part of the group, certain 'Operational Creditors' (OC) had filed insolvency petition. List of 13 Videocon group companies taken from Form- H- Compliance Certificate given by RP at 70 of the Appeal paper book in CA(AT) (Ins) No. 505 of 2021. Table - 1 Sl No. Name of the Videocon group company Insolvency commencement date Date of appointment of the IRP Date of appointment of RP 1. Videocon Telecommunications limited 11.06.2018 11.06.2018 10.07.2018 2. Electroworld Digital Solutions Ltd 30.08.2018 30.08.2018 10.10.2018 3. Value Industries Ltd 30.08.2018 30.08.2018 06.10.2018 4. Evans fraser & Co. (India) Ltd. 30.0....
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.... Plan submitted by the SRA has filed an affidavit stating that they feel duty bound to reconsider their decision in larger public interest resulting from unprecedent haircut of 95% & observations of the Adjudicating Authority as also this Appellate Tribunal while granting interim stay on the impugned order dated 08.06.2021 at the hearing on 19.07.2021 observing the followings stated hereafter. "14. Considering the observations of the Adjudicating Authority and the submissions made by the Learned Sr. Counsel for Appellants in both these Appeals and the grounds raised in these Appeals, and considering the exceptional facts of present matter the Impugned Order is stayed till the next date and status quo ante as before passing of the Impugned Order is directed to be maintained. Resolution Professional will continue to manage the Corporate Debtors as per provisions of IBC till the next date". 8. AFC have accepted that proceedings with the implementation of the Resolution Plan is not feasible in the light of above stated positions. No law debars review of decision in the executive branch as also in commercial company law matters to review its own decisions if at a later stage reveals ....
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....quidation value to all 'Dissenting Financial Creditors' in cash up-front. While the Resolution Plan also envisages payment through 'NonConvertible Debenture' (NCD). These changes the nature of the plan which requires reconsideration by the CoC independently. They have also cited the judgment of Hon'ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Associations & Ors. Vs. NBCC (India) Ltd. & Ors. in Civil Appeal No.3395 of 2020 at para 126 to 130. The ld. Sr. Counsel also stated that the said judgment of Hon'ble Apex Court has specifically held that 'modification in payment is a commercial aspect and falls within the exclusive domain and commercial wisdom of the CoC and cannot be interfered. Such modification is not permissible'. iv. Clause 3.5 of the 'Resolution Plan' (appearing at page 237-238 of the Appeal Paper Book) clearly reflects that the payment will also be made by way of NCD and 'there is no whisper of cash'. The Adjudicating Authority has no power to change the plan, it can only be reviewed by the CoC. v. It has also been submitted by the Ld. Sr. counsel for the Appellant that there is no priority payment to 'Dissenting Creditors' as these NCD are g....
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....r of the 'Resolution Plan' and done prior to completion of voting. The distribution suggested by SBI Caps was not put vote to the CoC. What is to be paid to 'Dissenting Financial Creditors' is in 'Form -H' which has been submitted alongwith the plan and the same can only be paid on the approval of the CoC. ii. It is also stated by the RP that he was not in a position to determine the exact amount payable to the Appellant prior to the date of actual payment in view of eventualities that could arise. (Para 11 of Written Submission of the RP dated 17.09.2021 vide diary no.29811). iii. It is also stated by the RP that 'Dissenting Financial Creditors' can be paid in cash (para IV page 13 of the RP reply). He has also stated that the Resolution Plan was in compliance with the applicable provisions of the Code and the CIRP Regulations and there was no reason or occasion that the same should be sent back for reconsideration to the CoC. 11. Submissions of the Respondent No.15/Successful Resolution Applicant (SRA): i. The 'Successful Resolution Applicant' (SRA) has briefly submitted that they are making upfront payment of Rs. 200 Crore to 'Financial Creditors', Rs. 2700 Crore NCD to ....
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....tion Plans and liquidation value relationship is relevant in view of the data available on the IBBI Website as on 30.06.2021. * Till date (upto 30th June 2021) only 393 CIRP processes yielded resolution plans; * 177 resolution plans out of 393 i.e.45% resolutions have had a realization which is 1.25 times the liquidation value or less; (Twin Star Resolution Plan was at a valuation of 1.25 times the liquidation value for 100% equity (92% stake of RA extrapolated to 100% as 8% equity is offer to Financial Creditors under the plan) * 82 resolution plans out of 393 resolutions i.e. 21% resolutions have had a realization below the liquidation value; * There are 11 approved resolution plans (out of 393) where the resolution value is between 99% and 101% of the Liquidation value; * There are 74 approved resolution plans (out of 393) where the resolution value is between 90% and 110% of the Liquidation value. vi. The Appellant is comparing admitted claim to the resolution plan value whereas it is to be compared with reference to liquidation value. vii. It was also pointed out by the SRA that CoC becomes functus- officio once it approves the 'Resolution Plan' and hence once th....
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....2.02 Crore which is only 4.15% of the total outstanding claim amount and the total hair cut to all the creditors is 95.85%. Therefore, the Successful Resolution Applicant is paying almost nothing and 99.28% hair cut is provided for Operational Creditors (Hair cut or Tonsure, Total Shave). During the Course of hearing it is also submitted that voluminous number of Operational Creditors are also MSME and if they are paid only 0.72 % of their admitted claim amount, in the near future many of these Operational Creditors may have to face Insolvency Proceedings which may be inevitable, therefore this Adjudicating Authority suggests, requests both CoC and the Successful Resolution Applicant to increase the pay-out amount to these Operational Creditors especially MSMEs as this is the First Group Consolidation Resolution Plan of 13 companies having large number of MSMEs. Para - 6. Further it is also observed that by just paying only Rs. 262 Cores (8.84% of total plan value) (Cash balance available with the Corporate Debtors is approx. Rs. 200 Crore) the Successful Resolution Applicant will get possession of all the 13 Corporate Debtors to run these units and the first payment of Rs. 200 C....
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....Accordingly, in the fitness of thing, AFC has proposed to reconsider its decision in larger public interest so as to ensure that the public money is secured and maximized in the best possible manner. This is a peculiar fact of this case and requires reconsideration by certain AFC, particular, public sector banks and financial institutions. They have requested this Appellate Tribunal to remand the matter back to the CoC for its reconsideration including authorization after the reconsideration by the CoC to inter alia allow the CoC and the RP after the reconsideration of the CoC to conduct a fresh process of the inviting fresh 'Expression of Interest' (EoI) and 'Fresh Resolution Plan' from all interested Resolution Applicants or to take appropriate decisions including liquidation of the corporate debtors, if approved, by the CoC as per provisions of Code. g. The AFCs have further submitted that proceedings with the implementation of the current Resolution Plan seems not feasible and they are accepting that the same is not consistent with the observations made by the Adjudicating Authority and this Appellate Tribunal and also considering the various issues presented in the current a....
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.... was of the view that the plan did not meet with any particular requirement, it could have only sent it back to the CoC to consider the proposed modifications, so as to afford an opportunity to the resolution applicant to modify the plan and to the CoC to reconsider and vote upon the same." iv. Thus, it has been made amply clear that the Adjudicating Authority (and this Appellate Tribunal) has powers to send the matter back to CoC for reconsideration. Thus, in the larger public interest, and in light of the observations made by the Adjudicating Authority and this Appellate Tribunal, the most appropriate course of action would be to remand the matter back to CoC for reconsideration. In any case, it has been time and again affirmed that the CoC's commercial wisdom is paramount by the Indian courts [K.Sashidhar Vs. Indian Overseas bank & Ors., (2019) 12 SCC 150; Committee of Creditors of Essar Steel India Ltd Vs. Satish Kumar Gupta & Ors., (2020) 8 SCC 531; Kalpraj Dharmashi & Anr. Vs. Kotak Investment Advisors Ltd., & Anr., 2021 SCC Online SC 204] K.Sashidhar Vs. Indian Overseas bank & Ors., (2019) 12 SCC 150 "Besides, the commercial wisdom of the CoC has been given paramount sta....
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....lue 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. The reasons given by the Committee of Creditors while 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." Kalpraj Dharmashi & Anr. Vs. Kotak Investment Advisors Ltd., & Anr., 2021 SCC Online SC 204 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 feasib....
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....shi & Anr. Vs. Kotak Investment Advisors Ltd. & Anr., 2021 SCC OnLine SC 204, BlRC's relevant portion is reproduced below: "The Committee believes that there is only one correct forum for evaluation such possibilities, and making a decision: a creditors committee, where all financial creditors have votes in proportion to the magnitude of debt that they hold. In the past, laws in India have brought arms of the government (legislature, executive or judiciary) into this question. This has been strictly avoided by the Committee. This appropriate disposition of a defaulting firm is a business decision, and only the creditors should make it." v. It is also submitted that, similarly, in the Insolvency Law Committee Report, 2018, it was re-emphasized that "the objective of the Code is to respect the commercial wisdom of the CoC." The Hon'ble Supreme Court in K.Sashidhar referred to the Report of 2018 and further affirmed that the CoC's commercial wisdom is paramount. Thus, if the CoC in its commercial wisdom considers it appropriate to have a reconsideration of its decision, this Appellate Tribunal may consider the same and remand the matter back to it in the larger interest of all sta....
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.... and Ors. Writ-C No. 45851 of 2011 (Allahabad High Court; Kamal Kumar Vs. State of H.P. CWP No. 3443 of 2020 (HP High Court); and District Collector Vs. Bhaskara, Writ Appeal No. 615 of 1982 (Kerala High Court)]. x. In this regard, observation of the Hon'ble Bombay High Court in the case of Rajesh Hansraj Chopra Vs. the Competent Authority & Ors., 2001 SCC OnLine Bom 1145 is very pertinent. Its states: "Section 21 of the General Clauses Act is a general provision how to interpret provision of an enactment or regulation or rules where certain powers are conferred on certain authority to issue an order and the extent to which such power could be exercised. In doing so, such authority is conferred with power to modify, amend or to alter it." xi. It is stated that the Hon'ble Supreme court judgment in the case of Ebix Singapore Pvt. Ltd. Vs. CoC of Educomp Solutions limited & Ors. in Civil AppealNo. 3224 of 2020 to avert that the Resolution plan once approved, cannot be withdrawn is not applicable to the instant fact situation. It is submitted that the Ebix judgment decided the question of whether a successful resolution applicant can withdraw/ seek modification of in a CoC appro....
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.... under the Rupee Term Loan Agreement, the Appellant separately enjoys an exclusive charge over a property. It is stated that the property is specifically the land and buildings at the factory at SP-1 Vigyan Nagar Industrial Area, Opp. RIICO Office, Shahjahanpur, Dist:Alwar - 301706, Rajasthan, admeasuring approx.. 81554.60 sq. mtr. It is stated that the Appellant had granted Gran Electronics Limited (GREL), a subsidiary of VIL not covered under the consolidation, a term loan of Rs. 200 crore. It is stated that the term loan was granted on one of the secured of exclusive mortgage of the Shahjahanour property owned by VIL, in favour of the Appellant. The Appellant craves leave to produce the Corporate Loan Agreement dated 10.09.2015 and the Undertaking dated 10.09.2015 of constructive delivery of the Shahjahanpur property to the Appellant, if required. However, it is an admitted position that the Appellant enjoys exclusive charge over the referred property at Shahjahanpur. Therefore, the Appellant enjoys a pari passu charge with other lenders, over all properties of the Videocon Group and also enjoys a separate exclusive charge over the Shahjahanpur property, owned by VIL. IV. The ....
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....s used by the SBICaps for the calculation of the distribution mechanism. VI. It is also stated that pursuant to the notices inviting EOI, 11 proposals were received by the CoCs of the Videocon Companies, out of these proposals, the legal advisors of the R-14 disqualified 9 proposals. Hence, the only proposals which were put before the CoC were the proposals of R-15 and V-Shape Investment Management Limited. The above referred two plans were therefore, tabled before the CoC for further consideration by the CoC members. It is stated that at the 19th meeting of the CoC, a discussion on distribution of resolution amount for each financial creditor was held. The RP had informed the CoC that the two plans i.e. plans of R-15 and V-Shape Investment Management Limited were in accordance with the Code and the Regulations thereunder. It was informed to the CoC that provisions had also been made to take care of dissenting financial creditors including priority of payment and the proposed plans and distribution mechanisms were in compliance with the law. It is stated that thereafter, through evoting carried our between 14.11.2020 to 11.12.2020 in furtherance of the 19th meeting of the CoC, th....
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....tions were finalized by the lenders alongwith SBI caps and the same was approved by the CoC members by majority. He further continued that the mention VTL cash balance is subject to certain litigations and currently there is a lien on the subject cash balance of VTL. IFCI further added that in spite of the litigations and lien, the CoC has accepted the valuation reports of 2 external valuation agencies who have given some liquidation value to these cash balance/FDs. Accordingly, IFCI insisted that the VTL cash liquidation value should be consistent with the valuation of these external agencies or the CoC/ RP needs to record reasons for not accepting their valuation of the VTL cash balance. The RP reiterated that he updated CoC about the litigation of VTL cash balance only for the information of the CoC and does not in any manner links the litigation to the treatment of VTL cash balance at the time of arriving the liquidation value (LV) in the distribution mechanism. He maintained that the litigation matter is sub-judice and would not be in a position to comment on the same. (Revised lender-wise distribution: IFCI kept on insisting that the distribution of amounts under the resolu....
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....y with, inter alia, the provisions of Section 30 of the Code to the extent of the liquidation value and the priority of payment contemplated to dissenting financial creditors. It is trite and evident on a bare perusal of the Code and the Regulations framed thereunder, including the CIRP Regulations that a Resolution Plan must meet certain mandatory criteria and failure to meet such mandatory requirements would result in the Resolution Plan being illegal and bad in law and contrary to the settled provision of the Code and the regulations framed thereunder. The Resolution plan submitted by the R-15 TSTL has provided a haircut of almost 90 to 95%. The plan provides meagre amount of Rs. 2900 crore for an admitted liability of Rs. 65000 Crore. The said waiver is almost of Rs. 62100/- Crore whereby public money is lost. The main objective and the spirit of the Code is to maximize the assets of the Corporate Debtor(CD), however the Code has been used as a tool to do the exact contrary and devaluate the CD assets. The Adjudicating Authority failed to raise questions as to whether correct information has been provided to the CoC for applying their commercial wisdom. The Adjudicating Authori....
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....so when the Applicant receives the money, as time value has a great impact on money. XV. Further, in terms of the Resolution Plan, the financial creditors who vote in favour of the resolution plan are to also be provided a total of 8% equity shareholding in VIL on a post money fully diluted basis and financial creditors such as the Appellant nonconvertible debentures to be issued which will remain outstanding and shall carry a coupon of 6.65% p.a payable annually. In this regard, it is submitted that the Code does not provide for such methods as payment towards the debt of financial creditor. In any case, even in case of liquidator of a CD in case of liquidation is to entitled or empowered to issue nonconvertible debentures or such instruments, how could such modalities be provided during CIRP as payout and discharge of debts of the Appellant. It is pertinent that as per the provisions of the Code, the dissenting Financial creditor are entitled to payout of minimum amount of liquidation value that too in priority manner as prescribed under Section 30 of the Code r/w section 53 of the Code. However, if the Code does not provide for modality for issuance of non-convertible debentur....
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....nsideration does not provide for the deduction of the VTL cash balance at all, contrary to what is being considered by the CoC in its calculation. Therefore, for this reason the errors as pointed out by the Appellant regarding the calculation need to be properly addressed by the RP and resolved. Also, Appellant separately enjoys an exclusive charge over a property being the land and buildings at the factory at SP-1 Vigyan Nagar Industrial Area, Opp. RIICO Office, shahjahanpur, Dist, Alwar - 301706, Rajasthan, admeasuring approx..81554.60 sq. mtr owned by VIL to secure the debt of Rs. 200 Crore advances to Gran Electronics limited (GREL), (a subsidiary of VIL not covered under the consolidation) by the appellant. Since the said debt of GREL is not being resolved in the CIRP of VIL and other group of companies, the said exclusive security in favour of the appellant ought to be excluded from the purview of the resolution approved by way of the impugned order dated 08.06.2021 and shall remain intact and unaffected until the debt advanced to GREL is paid off or settled. Since by virtue of being secured creditor to the extent the Shahjahanpur property is concerned, there is exclusive rig....
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....ity is not empowered to modify the Resolution plan while exercising the limited jurisdiction. It is submitted that once the Adjudicating Authority made a determination that the resolution plan is not in compliance to the provisions of the Code then the only recourse available with the Adjudicating Authority was to either reject the Resolution plan or sent it back to CoC for reconsideration. Thus, the impugned order passed by the Adjudicating Authority modifying the Resolution plan is in excess of jurisdiction vested with the Adjudicating authority and ought to be set aside by this Appellate Tribunal as it is settled principle of law that an order passed without jurisdiction is nullity. Therefore, the impugned order deserves to be quashed and set aside for failure of the adjudicating Authority to effectively exercise its supervisory power under the Code. 14. Submissions of the Respondent No.1 to 13 [(Resolution Professional(RP)]: I. The Ld. Sr. Counsel on behalf of the RP of Respondent No.1 to 13 (Videocon Group Companies under CIRP) have stated the following: a. What Resolution Plan he has presented in compliance with the Code and CIRP Regulations and were placed before the C....
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....esolution plan to be sent back to the CoC for reconsideration. i. After filing of the said application and before its disposal by the Adjudicating Authority, on or around 15.03.2021, the Appellant filed its application before the Adjudicating Authority inter alia challenging the resolution plan. ii. On 24.03.2021, the Hon'ble Supreme Court in the matter of Jaypee Kensington Boulevard Apartments Welfare Association & Ors., Vs. NBCC (India) Ltd. & Ors. made some observations in respect of payment to DFC under resolution plans. iii. The Application for approval of the resolution plan and the Appellant's application were heard together by the Adjudicating Authority and during the said hearing the judgment of the Supreme court in Jaypee as stated supra was duly brought to the attention of the Adjudicating Authority. The Adjudicating Authority enquired its impact of the said judgment on the present resolution plan, and particularly whether "upfront" payment to the DFC shall be made under the Resolution Plan. iv. Attention of the Adjudicating Authority was invited to the clauses of the resolution plan i.e. clause 3.4.5,3.5.1, 3.5.2 and 3.6.7 whereby priority status was ensured and....
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....Tribunal in the matter of India Resurgence ARC Pvt. Ltd. Vs. M/s. Amit metaliks Limited CA(AT) (Ins) no. 1601 of 2020 dated 02.03.2021 had observed as under in the context of section 30(4) of the Code: "6. ..... On a plain reading of this provision it is manifestly clear that the considerations regarding feasibility and viability of the Resolution Plan, distribution proposed with reference to the order of priority amongst creditors as per statutory distribution mechanism including priority and value of security interest of Secured Creditor are matters which fall within the exclusive domain of Committee of Creditors for consideration. These considerations must be present to the mind of the Committee of Creditors while taking a decision in regard to approval of a Resolution Plan with vote share of requisite majority. ... 7. It abundantly clear that the considerations including priority in scheme of distribution and the value of security are matters falling within the realm of Committee of Creditors. Such considerations, being relevant only for purposes for arriving at a business decision in exercise of commercial wisdom of the Committee of Creditors, cannot be the subject of ju....
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.... that the valuation of the CD is incorrect is misconceived and deserves to be dismissed. I. The Appellant has sought direction to the RP to place on record the liquidation value which the appellant will receive under the Resolution plans. It is submitted that there is no obligation on the Respondent to place the valuation of each stakeholder before them under the Code and/or in the Resolution Plan. As regards valuation, the only obligation that is cast upon the RP is the appointment of the valuers for determination of the liquidation value of the CDs. Accordingly, the liquidation value was determined and communicated to the CoC (of which the Appellant is a part). Further, there is no provision in the Code or the Regulations, for the CoC to consent or approve upon the liquidation value. This is because the Code contemplates independent and recognized bodies i.e. registered valuers, to undertake this exercise and there is no question of any approval on the same. Under Regulation 35 of the CIRP regulations, the only option available with the RP is to (i) appoint a third registered valuer if in the opinion of the RP, there is significant difference in the two estimates of value and (....
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....law, the present appeal deserves to be dismissed. In any event, the Resolution plan is already approved by over 95% of the CoC, approval from the CoC in respect of the resolution plan is already in place and there is no reason for sending the resolution plan for reconsideration before the CoC. 15. Company Appeal (AT) (Ins) No. 529 of 2021: A. Submissions of the Appellant- Small Industries Development Bank of India. I. The Ld. Counsel Appellant has submitted that the list of dates and events as stated in the Memo as enumerated below: DATE EVENT 06/06/2018 to 25/09/2018 All the respondent entities of Videocon group were under CIRP under the action taken by the Lead bank i.e. State Bank of India u/s. 7 of the IB Code, 2016 and in case of few companies who are also part of the Group, certain operational creditors had filed insolvency petitions. 26/06/2018 Appellant bank submitted its claim under Form C to the RP. 24/10/2018 The Hon'ble Principal Bench vide its Order has transferred all matters where CIRP commenced of the Corporate Debtors to a common Bench as it will, inter alia, serve the basic purpose of tagging of all matters to avoid conflicting orders, if any, in....
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.... the Plan submitted by TSTL Hence, this Company Appeal. II. The Plan provides amounts to the Appellant bank less than the liquidation value which the bank will receive otherwise and therefore contrary to section 30 of Code. 1. In 19th COC meeting, it was recorded that SBI Caps 'process advisors' shall send detail workings on the distribution amount receivable to each financial creditor including 'dissenting creditors'. On 13 November 2020, the process advisor SBI CAPS sent an email stating 'distribution mechanism presentation and the excel calculation (including the liquidation value calculation)' for perusal of all the members. As per the same the total liquidation value amount payable to the Appellant bank is 2.06 crore. The said excel sheet categorically provided that in the event the Appellant financial creditor dissents, there is a difference of 0.42 crore which the financial creditor will have to bear. The RP in 21st COC, to query categorically raised by one of the financial creditors Bank of Maharashtra, confirmed that there is no change in the Distribution Calculation as calculated and shared by SBI Caps. 2. However there is a discrepancy in the FORM H and th....
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....ck to the COC for reconsideration) amounts to modification of plan which is impermissible. 1. While considering the feasibility of the Plan, the aspect of 'legality' of the plan was also considered by the Appellant Bank and the same contributed to the decision of the bank of dissenting the plan. Similarly, other creditors, must have also considered the said aspect and voted on the plan. 2. However, replacing of the method of payment from debentures to Cash, amounts to modification. The entire tenor of the plan and financial model of plan is based on the payment by way of NCD's. This changes the nature of the plan and must be considered by the COC independently. 3. The Jaypee Kensington matter, identical facts were dealt by the Hon'ble Supreme Court, whereby the dissenting financial creditor (ICICI bank) was offered security and alternate lands instead of payments. This Appellate Tribunal while holding that the payment other than cash is not permissible to dissenting creditors, also went on to modify the plan to negate the said illegality and directed payments to DFC in cash. The Hon'ble Supreme Court specifically held that the same is not permissible as the modification in p....
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....has examined the Resolution Plan in the context of treatment being accorded to the Dissenting Financial Creditors and has found the same to be in compliance with the law. i. It is submitted that under Clause 3.4.5, 3.5.1, 3.5.2 and 3.5.7 of the Resolution Plan, as reproduced in the Affidavit in Reply dated 29th August, 2021, filed by the Resolution Professional ("RP's Reply"), the Resolution Plan preserves and protects the priority status to the Dissenting Financial Creditors (DFC). ii. The aforesaid clauses in the Resolution Plan ensure priority to the Dissenting Financial Creditors at least on three accounts, which are as under: * The Dissenting Financial Creditors are to be paid at least the amount payable to them in the event of liquidation under Section 53(1) of the Insolvency and Bankruptcy Code, 2016 ("Code"); * Upfront payment to Dissenting Financial Creditors shall be made before upfront payment to Assenting Financial Creditors is made; * Non-convertible debentures ("NCDs") issued to Dissenting Financial Creditors shall be redeemed before NCDs issued to Assenting Financial Creditors are redeemed. [Ref para 4 III e), pg. 11-12 and i), pg. 13 of RP Reply] iii. Ba....
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.... submitted that the commercial wisdom of the CoC is paramount. Eleven resolution plans were received for the Corporate Debtors, of which two were found to be compliant with the applicable provisions of the Code and the CIRP Regulations. The two compliant plans were placed before the CoC for voting. The CoC approved Respondent No. 15's Resolution Plan with over 95% majority. [Ref para V, pg. 1618 of RP Reply]. ii. It is a settled position of law that commercial wisdom of CoC in accepting or rejecting the Resolution Plan is paramount and that there should be no interference to an approved resolution plan, unless the same contravenes Section 30(2) of the Code. [K. Sashidhar v. Indian Overseas Bank ; Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta ; Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd 4 and Kalpraj Dharamshi v. Kotak Investment Advisors 5 ]. iii. The Adjudicating Authority has found the Resolution Plan compliant with the said provisions, therefore the present Appeal which seeks to assail the commercial wisdom of the CoC deserves to be dismissed. c. The Appellant's contention that the determination of the liquida....
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....Form H. vi. The calculations by SBI Caps, which is process advisor appointed by the COC for its own commercial reasons, cannot be the sole basis of challenge to the Resolution Plan. The RP has not commented on the individual figures but has only arrived at the estimated amount to be paid to the Dissenting Financial Creditors as per the Code and the CIRP Regulations. [Ref para VI c), pg. 21-22 of RP Reply]. In any event, as stated above, under the Resolution Plan, the Dissenting Financial Creditors shall be paid at least the amount payable to them in the event of liquidation under Section 53(1) of the Code. vii. In the Minutes of the 21st Meeting of the CoC, the RP only clarified that there was no change in the distribution mechanism/ list as approved in 19th Meeting of the CoC. The RP never stated that individual lender wise distribution calculation arrived at by SBI Caps was submitted to the Adjudicating Authority for approval. Only the distribution mechanism was placed before the Adjudicating Authority after it was also voted upon and approved by the CoC along with the Resolution Plan. viii. In compliance with the Code and the CIRP Regulations, the RP has stated the estimat....
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....bursements to the DFC will be made one day prior to cash disbursements to the consenting financial creditors c. Hence, the requirement to pay the liquidation value and the aspect of priority which are mentioned at Section 30(2)(b) of the Code and Regulation 38(1)(b) of CIRP Regulations is complied with by the Resolution Plan. d. However, the Appellant in the present Appeal relied on the email dated 13.11.2020 of SBI Caps to allege that the Resolution Plan does not provided it with the liquidation value. The basis for such allegation as stated by the Appellant is as follows: (i). That as per email dated 13.11.2020 the liquidation value share of Appellant will be INR 70.31 crore and that of Bank of Maharashtra and SIDBI (other DFCs) is INR 41.85 crore and INR 2.06 crore respectively (which in turn total to around INR 114.21 crore) (ii) The Appellant compares the above figure of INR 114.21 crore with the figure of INR 105.23 crore which is disclosed in the Form H to be the amount payable under the Resolution Plan to DFC. On this basis, the Appellant alleges that it is receiving amounts less than the liquidation value. e. In response to above, it is submitted that the above f....
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....der of priority amongst creditors as laid down under Section 53(1) read with Section 30(2)(b)(ii) and 30(4) of the IBC. c. A conjoint reading of the above provisions of the Resolution Plan clearly shows that the Resolution Plan had already clarified that the payment to the DFC shall be made in accordance with Section 30(2) of the Code. Pursuant to the decision of the Hon'ble Supreme Court in Jaypee (supra) such payment under Section 30(2) can be made only in cash. As such, the Respondent No. 15 would make payment to the DFC in cash as provided for in the Resolution Plan. d. In view of the above, it is submitted that the Resolution Plan is in compliance with Section 30(2) of the Code and the settled parameters laid down by the Hon'ble Supreme Court. It is for this reason, that the Hon'ble Adjudicating Authority approved the Resolution Plan by observing at paragraph 24 of the Approval Order that the payments to DFC shall be made in cash. e. It is submitted that the observation made by the Hon'ble Adjudicating Authority at paragraph 24 of the Approval Order does not amount to modification of the Resolution Plan since the Resolution Plan has already clarified at Clause 3.5.7 that....
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....I. Originally, the Appellant's parent company, AB Electrolux ("ABE"), controlled and held 91.85% of the equity share capital in one Electrolux Kelvinator Limited ("EKL"). EKL therefore belonged to and/or formed part of the Electrolux Group. Under a Share Purchase Agreement ("SPA") dated July 7, 2005, ABE transferred all of its equity shares and a portion of its preferential shares in EKL to Mr. Venugopal Dhoot. By this SPA, Mr. Dhoot became the primary shareholder in EKL. Upon and by reason of the transfer EKL ceased to be a part of the Electro lux Group. Simultaneously with the SPA, a Trademark License Agreement ("TLA") dated July 7, 2005 was executed between the Appellant and EKL inter alia for licensing the aforesaid Trademark to EKL. EKL then merged into the Corporate Debtor under a scheme of merger and amalgamation. This scheme was sanctioned by the Bombay High Court by its order dated June 30, 2006. As a result, thereof, all the assets and liabilities of EKL, including the TLA, stood transferred to the CD. The CD, therefore, became the licensee of the said Trademark. IV. The TLA dealt with the manner in which and also set out in extenso the terms and conditions on which....
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.... in control of the Licensee ... Clause 17.1: "In the event this Agreement is terminated in accordance with its terms, Licensee shall assign, transfer and transmit to Licensor any and all rights of Licensee in the Trademark (if any) including associated goodwill, and shall not thereafter manufacture or sell any Trademark Product or use the Trademark in any manner; provided that, Licensee may however, dispose of its stock of Trademarked Product on hand within two hundred seventy (270) days after expiry of this Agreement; provided, however, any sums due to Licensor have first been paid; and further provided, that Licensee shall, prior to the effective date of said expiry or termination, deliver to Licensor a detailed schedule of all inventory of Trademarked Product in Licensee's possession..." Clause 17.4: "Except for the right to use the Trademark as specifically provided for in this Agreement, (i) Licensee shall have no right, title, or interest in or to the Trademark, and (ii) upon and after the termination of this Agreement, all rights granted to Licensee hereunder, together with any interest in and to the Trademark that Licensee may acquire, shall forthwith and without furthe....
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....r a detailed schedule of all inventory of Trademarked Product in Licensee's possession ... " VI. On June 8, 2018, the Adjudicating Authority passed an order admitting the Petition and appointing Mr. Anuj Jain as the Interim Resolution Professional ("IRP"). As a consequence of this order, the powers of the Board of Directors of the Corporate Debtor, together with those members of the Dhoot family who were on the Board, stood suspended and such powers became exercisable by the IRP. The Dhoot family therefore ceased to be in control of the Corporate Debtor. Thereafter, in terms of the TLA and June Letter, the termination became effective and inter alia all rights in the Trademark reverted back to the Appellant. Respondent No. 1, as the RP, therefore became obligated to comply with its post termination contractual obligations, as specified in the TLA. Immediately after the appointment of Mr. Jain as the IRP, the Appellant addressed an email dated June 8, 2018 to the IRP, requiring the IRP to confirm receipt of the June Letter. The IRP replied by way of an email dated June 9, 2018, confirmed receipt of the June Letter. Again, on September, 21, 2018, the Appellant addressed a lette....
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....se the Trademark. The Appellant also called upon the RP to ensure that obligations under the TLA with respect to providing warranty services are fulfilled. IX. On December, 24, 2018 the Appellant received a letter addressed on behalf of the RP ("RP III Letter"). Through this letter, the RP came up with an altogether new ground to challenge the termination of the TLA. The RP inter alia challenged the termination of the TLA as being invalid on account of the moratorium imposed by Section 14 of the Code; and the RP requested that the Appellant therefore should withdraw the June Letter. The Appellant replied to the RP III Letter by its letter of December 24, 2018 ("December Letter"), pointing out that the termination of the TLA was valid and lawful, and inter alia reiterating its requests that the Respondent abide by its obligations in law and contract. Given the RP's wanton disregard of contractual obligations, the Appellant was constrained to file MA 527/2019 before the Adjudicating Authority on February 5, 2019, seeking inter alia a declaration that the termination of the TLA was valid and directions that the RP be prohibited from using the Trademark in any manner. X. It is ....
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...., praying for use of Brand name "Kelvinator" is concerned, we are of the considered view that the Agreement should continue for at least a year from the date of approval of the Plan as per the existing Terms and Conditions as a transitional arrangement and subsequently it is upto both the parties to decide on the same as per their mutual understanding". XIII. It is stated that, as far as MA 527/2019 is concerned, in the Impugned Order the Adjudicating Authority has totally failed to even record the contentions of the respective parties, let alone deal with the said contentions. In this context, it is pertinent to note that both sides made oral submissions at the hearing on May 7, 2021 and thereafter, filed written submissions of their respective contentions. Despite this, there is not even a whisper in the Impugned Order of the contentions raised by the respective parties. Instead, in paragraph 11, the Adjudicating Authority proceeds to dispose of MA 527/2019 in a totally unreasoned, arbitrary and non-speaking manner which fails to even give a glimpse of what weighed with the Adjudicating Authority or what formed the basis of its decision. It is respectfully submitted that the Im....
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.... in the legs of the CIRP being cut off. This is clearly not so in the present case. In the present case, the Appellant pointed out that there were no facts on record to support the case that continuation of the TLA was essential to the Corporate Debtor, especially in light of Respondent No. 1's admission before the Adjudicating Authority that the Trademark had not been used since 2018. The Adjudicating Authority, in passing the Impugned Order, ignored the following findings that are dispositive of the issues raised in the subject proceedings:- "J Validity of ipso facto clause 88. Before we proceed to analyse the validity of the termination of the PPA by the appellant under Articles 9.2.J(e) and 9.3.1 in the present case, it is important to contextualize it within the larger debate on this issue. Globally, ipso facto clauses arise in a variety of contracts. Ipso facto clauses are contractual provisions which allow a party ("terminating party") to terminate the contract with its counterparty ("debtor") due to the occurrence of an 'event of default'. In the context of insolvency law, in some of these ipso facto clauses, the 'event of default' include applying for i....
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....t fulfilled completely. Such interference or overriding powers would assist in achieving the objectives of the insolvency process. The power is necessary to facilitate taking appropriate business and other decisions including those directed at containing rise in liabilities and enhancing value of assets. 13.6 Exceptions of such powers are also essential to be insured in the law where there is a compelling, commercial, public or social interest in upholding the contractual rights of the counter party to the contract. " 131 The Committee noted the need to invalidate ipso facto clauses so as to prevent the value of a Corporate Debtor's assets from becoming diluted during the insolvency process. However, this invalidation was to be subject to exceptions, keeping in mind the "compelling, commercial, public or social interest in upholding the contractual rights of the counter party to the contract". 132 However, as is evident, this recommendation was never directly embodied legislatively since the current Code contains no clear-cut provision which invalidates ipso facto clauses. In fact, the issue of the invalidation of ipso facto clauses was noted in a December 2018 report title....
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.... as a 'going concern' during the moratorium period imposed under Section I4, and how it was being affected by the termination of certain Government licenses, permits, et al, based on ipso facto clauses which allowed termination upon commencement of insolvency. Noting that the legislative intent underlying Section I4 would be to invalidate such terminations, the Report recommended the addition of the Explanation to Section 14(1) of the IBC. The relevant portion, in relation to the Explanation to Section 14(1), reads thus: Prohibition on Termination on Grounds of Insolvency 8.3. It was brought to the Committee that in some cases government authorities that have granted licenses, permits and quotas, concessions, registrations, or other rights (collectively referred to as "grants") to the corporate debtor attempt to terminate or suspend them even during the CIRP period. This could be attempted in two ways: one, by relying on ipso facto clauses, by virtue of which these grants may be terminated on the advent of insolvency proceedings themselves, and second, by initiating termination on account of non-payment of dues. 8.4. The Committee discussed that by and large, the gran....
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....thority, that had passed orders preventing recovery by stock exchanges and regulators, as well as the de-registration of aircrafts. 8. 7. Relying on this, the Committee was of the view that termination or suspension of such grants during the moratorium period would be prevented by Section 14. However, to avoid any scope for ambiguity and in exercise of abundant caution, the Committee recommended that the legislative intent may be made explicit by introducing an Explanation by way of an amendment to Section 14(1)". ... 152 As the above excerpts indicate, but (or the subsistence of the PPA. the Corporate Debtor would no longer remain as a 'going concern'. Differently stated. by virtue of the PPA with the appellant being the sheet-anchor of the Corporate Debtor's business and consequently of the CIRP, its continuation assumes enormous significance (or the successful completion of the CIRP. The termination of the PPA will have the consequence of cutting the legs out from under the CIRP. K.2 Validity of the termination of PPA 153 As discussed in Section "J.3 " of this judgement, the broader question of the validity of ipso facto clauses has been the subject matte....
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.... concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the Board: Provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate. " Parliament would have been conscious of the provision which was adopted in the SICA. Yet, no concrete position has been adopted in relation to the termination of ipso facto clauses by the legislature under the IBC. In the absence of an express prohibition by the legislature, it can be argued that there is no general embargo on the operation of such clauses if they are part of a valid contract und....
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....ating Authority cannot do what the IBC consciously did not provide it the power to do. 164 In this case, the PPA has been terminated solely on the ground of insolvency, which gives the Adjudicating Authority jurisdiction under Section 60(5)(c) to adjudicate this matter and invalidate the termination of the PPA as it is the forum vested with the responsibility of ensuring the continuation of the insolvency resolution process, which requires preservation of the Corporate Debtor as a going concern. In view of the centrality of the PPA to the CIRP in the unique factual matrix of this case, this Court must adopt an interpretation of the Adjudicating Authority residuary jurisdiction which comports with the broader goals of the IBC. Sir P.B. Maxwell in his commentary, On Interpretation of Statutes 129, has emphasized that a provision should be given a harmonious interpretation which comports with the intention of the Legislature. The commentary provides: "The rule of strict construction, however, whenever invoked, comes attended with qualifications and other rules no less important, and it is by the light which each contributes that the meaning must be determined. Among them is the ru....
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....ided for suspension of wide-ranging contracts. Section 22 of the SICA cannot be brought in through the back door. The basis of our intervention in this case arises from the fact that if we allow the termination of the PPA which is the sole contract of the Corporate Debtor, governing the supply of electricity which it generates, it will pull the rug out from under the CIRP, making the corporate death of the Corporate Debtor a foregone conclusion. 173 In conclusion, we hold that: (i) The NCLT/NCLAT could have exercised jurisdiction under section 60(5)(c) of the IBC to stay the termination of the PPA by the appellant, since the appellant sought to terminate the PPA under Article 9.2.1 (e) only on account of the CIRP being initiated against the Corporate Debtor; (ii) The NCLT/NCLAT correctly stayed the termination of the PPA by the appellant, since allowing it to terminate the PPA would certainly result in the corporate death of the Corporate Debtor due to the PPA being its sole contract: and (iii) We leave open the broader question of the validity/invalidity of ipso facto clauses in contracts for legislative intervention. Consequently, for the above reasons we find no merit in....
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.... handed over to a third party as a part of the "Corporate Debtor's basket of assets". b. The TLA is not an "asset" or "property" of the Corporate Debtor that can be monetised during the insolvency resolution process. The RP cannot attempt to stake claim over assets belonging to a third party merely because it would add value to the Corporate Debtor's estate. XVI. The TLA does not fall within the scope of essential goods and services set out under Section 14 of the Code. By way of an amendment brought in with effect from December 28, 2019, the IBC clearly specifies that: "" ... a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period". The TLA does not fall within th....
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....1 SCC 519; paras. 7,8,15,19); * Rangi International Ltd. v. Nova Scotia Bank ((2013) 7 SCC 160, para. 3); * Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India and Anr (AIR 1976 SC 1785, para. 6); * State of Orissa v. Dhaniram Luhar ((2004) 5 SCC 568, paras. 6 to 8); * Victoria Memorial Hall v. Howrah Ganatantrik Nagrik Samity ((2010) 3 SCC 732 9, paras. 40, 41)] III. Termination of the TLA was valid in the eye of law and in accordance with Hon'ble Supreme Court Judgment in Gujarat Urja Vikas Nigam Limited Vs. Amit Gupta & Ors. (Civil Appeal No. 9241 of 2019, decided on march 8, 2021 IV. It was also stated by ld. Sr. Counsel for the Appellant that the transitional arrangement has no basis in law. If termination of the TLA was lawful and the underlying application allowed, there would be no question of continuing for one year. However, if termination was unlawful- there no requirement to restrict it to one year. The transitional arrangement has no basis in law or contract. V. It was also stated that the Resolution Plan could only provide for subsisting contracts for the purpose of carrying on the business of the Corporate Debtor and which were sub....
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....tion by the legislature, it can be argued that there is no general embargo on the operation of such clauses if they are part of a valid contract under the Contract Act." 19. Additionally, Section 14 of the Code specifically sets out the kinds of licenses that may not be terminated on grounds of insolvency, i.e., a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force. The TLA does not fall under any of those categories. (Appeal, page no. 55). 21. The Hon'ble Supreme Court has clearly laid down in Gujarat Urja (supra) that termination of licenses may be interfered with only if the license in question is the "sheet anchor" of the Corporate Debtor and that termination would have the consequence of "cutting the legs out from under the CIRP" (para 152). B. Submissions of the Respondent No.1 I. It was stated by the Ld. Sr. Counsel for the RP that the Appellant ("Electrolux"), a company incorporated in US, is the registered proprietor of the trademark "Kelvinator" ("Trademark") ....
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....e judgment in Gujarat Urja is unilateral and incorrect. The Supreme Court specifically recognises the duties of the RP under Section 14 of the Code which mandates preservation of assets, critical to preserve the value of the Corporate Debtor and manage the operations of the Corporate Debtor as a going concern and the same does not in any manner affect the RP's duties to preserve and protect the value of the assets of the Corporate Debtor. Further, the judgment in Gujarat Urja does not deal with a situation as in the present case as the judgment only deals with cases regarding validity of ipso facto clauses in relation to agreements forming a "sheet anchor" of the Corporate Debtor and not with such clauses in relation to residuary contracts providing licenses to the Corporate Debtor adding value to the assets of the Corporate Debtor - termination of which is specifically prohibited under Section 14 of the Code. It is submitted that the judgement only deals with contractual arrangements which are otherwise not covered within Section 14 of the Code. [Para 20(l) and 20(m), RP's Reply]. The termination of the TLA by Electrolux is contrary to Section 14(1) of Code which specifically proh....
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....Authority, shall be endorsement, delivery or recording of or by operation of Applicable Law pursuant to the order of the Adjudicating Authority sanctioning the Resolution Plan, and on this Resolution Plan becoming effective be deemed to and continue to be valid and subsisting contracts." III. It is submitted that the Appellant had made a misplaced argument that Clause 11.3 of the Resolution Plan is applicable only to subsisting contracts and that the Appellant has terminated the TLA prior to order of the Adjudicating Authority admitting the section 7 petition against the CD. The said argument of Appellant is factually incorrect because as per Appellant's own letter of termination dated 05.06.2018 (appearing age page 230 of the Appeal paper Book), the termination of TLA "shall become effective on the date on which the application for CIRP is admitted by the Adjudicating Authority". Hence, the TLA was subsisting on the date of the order of the Adjudicating Authority admitting the Section 7 application and also immediately before it. Therefore, as per Clause 11.3 of the approved Resolution Plan, the TLA continues to be valid and subsisting. IV. It is also submitted that the Appell....
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....mination valid in law. In fact, had the termination become valid in view of what is stated in the Information Memorandum, the Appellant would have had no occasion to file the MA seeking declaration that the termination was valid. Hence, the case set out by the Appellant is without basis and untenable. Lastly, it is submitted that the argument of Appellant that the trademark was not in use for a period of last two years is wholly irrelevant as the CD was in CIRP during such time and mere allege non-usage of the trademark during CIRP would not ipso facto make an otherwise illegal termination a valid one. 18. Company Appeal (AT) (Ins) No. 650 of 2021: A. Submissions of the Appellant- Venugopal Dhoot. I. The Ld. Sr. Counsel for the Appellant has submitted that the Appellant is the guarantor shareholder and ex-managing Director/Chairman of Videocon Industries Limited and is interested entity of the CD and its stakeholders. What has been stated by the Appellant is that all assets owned by Videocon Group, particularly, foreign oil and gas assets are not included in the 'Information Memorandum' as also no valuation thereof has been considered while the claim of lenders of foreign oil....
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....o include the foreign oil and gas assets of VIL as assets of VOVL in the CIRP of VOVL. However, the same will be contrary and contradictory to the stand taken by SBI in the case of VIL as VOVL also holds the said foreign oil and gas assets through the foreign companies incorporated for that purpose. The said fact is clear from the IM of VOVL issued by the RP of VOVL. IV. It is stated that Minutes of meeting of SBLC lenders in respect of VOVL on 26.03.2018 (page No.76 of rejoinder to R-1) clearly records that SBI being already aware that CIRP will be initiated against VIL and that the shareholding of VIL in VOVL shall be taken under control by the RP, deliberately took active steps to keep the said foreign oil and gas assets outside the purview of the CIRP of VIL. Similarly, a bare perusal of the minutes of meeting of MD and CEO of SBLC Lenders on 13.06.2018 (appearing at page no.84-85 of the rejoinder to R1) indicated that SBI deliberately transferred the shares of VIL in VOVL and VHHL in favour of SBICAP Trustee Company Limited so as to sequester the foreign oil and gas assets from the CIRP of VIL. Valuation of standalone foreign oil and gas assets was at 4.29 billion USD in 201....
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.... their admitted dues whereas other set of OCs i.e. Government and other OCs are being offered only 0.12% repayment of their admitted dues. The Adjudicating Authority after coming to conclusion that interest of OCs has not been taken care of in the Resolution Plan instead of sending it back to CoC for reconsideration has approved the same and requested CoC to increase the payout to CoC. Thus, the Resolution plan as approved by the Adjudicating Authority is discriminatory and violative of the provisions of the Code itself as it discriminates between same class of creditors. The Resolution plan of R-3 provides for a massive 99.28% haircut to OCs and 95.85% haircut to all its creditors as was also observed by the Adjudicating Authority in the impugned order itself at para 5. VI. It is stated that the SBI is blowing hot and cold under the same breath as at one stage i.e. for the purpose of consolidation, SBI requested for consolidation order in order to have common pool of assets for maximization of value of CDs whereas on the other hand SBI invited interest for sale of foreign oil and gas assets and is contesting upon inclusion of same is common pool of assets. The RP failed to exami....
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.... the impugned order, the Appellant has prayed for reconsideration of his 12A proposal which is not permissible either in law or facts. The Appellant's 12A proposal was duly considered by the CoC in its 19th meeting and was rejected by an overwhelming majority of 98.14%. considering that the Appellant neither challenged such rejection nor raised any objections to the Resolution plan before the Adjudicating authority, the Appellant has no locus to seek re-consideration of 12A proposal before this Appellate Tribunal. As recognized by this Appellate Tribunal in Vishal Vijay Kalantri Vs. Shailen Sbab in CA(AT) (Ins) No. 466 of 2020, in para 9, 11 and 12, an ex-promoter has no locus to challenge approval granted to a resolution plan, even if he seeks reconsideration of his rejected 12A proposal on the basis that the settlement proposal is superior to the approved resolution plan. It is submitted that the Appellant has failed to demonstrate any provision of the Code and /or the Regulations thereunder, which would entitle the Appellant to seek acceptance of his 12A proposal by the CoC as a matter of right. As recognized by the Hon'ble Supreme Court in Swiss Ribbions Pvt. Ltd & Ors. Vs. Uni....
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....ale of upstream foreign oil and gas assets with passing of the Consolidation order, all findings relied upon by the Appellant have been merged into the consolidation order, which continues to be stayed by this Appellate Tribunal. c. The facts stated in the limited reply filed by the RP to CA(AT) (Ins) No. 299 of 2020 highlighted the reasoning and factors on account of which the RP couldn't have treated the assets of its wholly owned Indian subsidiary, VOVL, and other foreign entities, VHHL, VEBL and VINI, which have not been reflected in standalone financial statements of VIL as its assets, as VIL's assets for the purpose of VIL's CIRP in view of Explanation (b) to Section 18 of the Code and the subsistence of the stay order. III. Further, the relief sought by the Appellant seeking issuance of fresh information memorandum and call for fresh EOI/Resolution Plan for all assets of Videocon group including all foreign oil and gas assets of Videocon Group is subject matter of CA(AT) (Ins) No. 299, 467, 639, 640 of 2020, pending before this Appellate Tribunal, and thus cannot be entertained in the present appeal. Additionally, the allegation that the RP inflated the liabilities of th....
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....email on 02.09.2020 were directly uploaded in the Virtual Data room on the night of 02.09.2020. Hence, there was no occasion for anyone to know about the liquidation value, since the liquidation value was received on 02.09.2020, after receipt of the resolution plan on 31.08.2020. The liquidation value of was also mentioned in the Form-H submitted before the Adjudicating Authority alongwith the plan approval application. Thus, there is no discrepancy regarding actual value, fair value and liquidation value of the CDs. The generic, vague and cryptic allegations of material irregularity and fraud/collusion by the RP are baseless and denied in seriatim. With regard to applications filed under Section 43, 45 & 46 of the Code, the RP filed these applications, in exercise of its statutory duty under Section 25(2)(j) of the Code R/w Regulation 35A of the CIRP Regulations. The Appellant's allegations disputing its evidentiary value are baseless and extraneous to the present appeal. B. Submissions of the Committee Creditors of Consolidated Videocon Group of Companies:- I. It is stated by the Ld. SG that the instant appeal has filed by the Appellant is a part of a long-drawn strategy of t....
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.... of Videocon Industries Limited ("VIL"), the parent company of the Videocon Group of Companies, is directly responsible for the insolvency of the Videocon group companies on account of, inter alia, his poor management. It is pertinent to bring to the attention of this Hon'ble Tribunal that State Bank of India had initiated personal insolvency proceedings against the Appellant herein by filing an application under Section 95 of the Code on 1st September 2020. The application for initiation of personal insolvency against the Appellant herein in his capacity as a personal guarantor to the debts owed by VIL has been allowed by the Hon'ble Adjudicating Authority vide its order dated 1st September 2021. It is stated that filing of the instant Appeal by Mr. VN Dhoot, therefore, is without any basis and is non-maintainable under the Code on account of the initiation of personal insolvency proceedings against him and since it is preferred merely to scuttle the CIR Process of the Consolidated Corporate Debtor and misuse the same to create hindrances in the personal insolvency proceedings before the Hon'ble Adjudicating Authority. The Respondent No. 2 respectfully submits that the instant App....
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....order of the Adjudicating Authority. The Appellant cannot in any way be considered to an "aggrieved person" qua the Impugned Order. It is submitted that an individual whose own actions and inactions have contributed and continue to contribute to the financial illness of the Consolidated Corporate Debtors and whose actions and inactions run contrary to his claims of value maximisation in the interest of creditors and best intention for the resolution of the Consolidated Corporate Debtors, ought not to be allowed to now challenge the CIR Process throughout the CIR process of the Consolidated Corporate Debtors, the Appellant has made all possible endeavors to frustrate and derail the CIR Process and thwart all attempts of a successful resolution of the Consolidated Corporate Debtors thereby jeopardizing the interest of all stakeholders and defeating the very objects of the Code. The Appellant has filed numerous litigations in a gross abuse of the process with the sole intention to disrupt the CIR Process and frustrate smooth conclusion of the CIR Process. It is a matter of record that the Appellant's acts of commission and omission while in control of the Consolidated Corporate Debtor....
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....ely Anuj Jain, had invited expression of interest ("EOIs") from prospective resolution applicants. However, the Appellant filed an application before the Adjudicating Authority seeking transfer of insolvency proceedings against Videocon Group of Companies to a single bench of Adjudicating Authority. Due to this, the Adjudicating Authority had directed the then Resolution Professional of VIL, namely Mr. Anuj Jain, to temporarily defer the CIR Process of VIL and wait for the decision of the Adjudicating Authority; c. Seeking inclusion of foreign oil and gas assets held by foreign subsidiaries of VIL in the CIR Process of VIL: More than a year after initiation of CIR Process against VIL and 12 group companies, Appellant filed two separate applications seeking similar reliefs, bearing MA No. 2385 of 2019 and MA No. 2620 of 2019, for inclusion of the foreign oil & gas assets held by the foreign incorporated subsidiaries of VIL in the CIR Process of VIL. It is pertinent to note that even during the consolidation proceedings leading upto the Order dated 8 August 2019, the Appellant did not raise any averment about inclusion of foreign oil and gas assets in the CIRP of Consolidated Corpo....
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....ess of the Consolidated Corporate Debtors is not affected. Further, it is submitted that the financial creditors have also initiated recovery proceedings against the promoters, namely the Appellant herein and his brothers namely Mr. Pradeepkumar N. Dhoot ("Mr PN Dhoot") and Mr. Rajkumar N. Dhoot ("Mr. RN Dhoot"), who are also the expromoters of Videocon group companies and personal guarantors to the debts of the Consolidated Corporate Debtors, before the Debt Recovery Tribunals. SBI has also initiated personal insolvency proceedings against these promoters, and the insolvency petition filed by State Bank of India has been admitted against Mr. VN Dhoot vide order dated 01.09.2021. Even under these proceedings, the Appellant and his brothers, instead of clearing off the dues owed to the financial creditors, have employed all possible tactics to delay and frustrate the judicial process, including but not limited to: A. Appellant and other related promoters, namely Mr. RN Dhoot and Mr. PN Dhoot, have been constantly delaying and frustrating the DRT recovery proceedings initiated against them by, inter alia, evading service; B. Similarly, before the Adjudicating Authority in the per....
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....VL. It is submitted that the Writ Petition, inter alia, mentioned that the Oil & Gas Assets belonged to VOVL and further that initiating CIR Process pursuant to the 12th February, 2018 circular of RBI will erode the value of the assets of VOVL and would in turn be detrimental to the lenders of VOVL. It is pertinent to note that nowhere in the Writ Petition did VOVL take the ground that Oil & Gas Assets could not be proceeded against since they were the assets of VIL, and hence, covered under the moratorium declared under Section 14 of the Code. Further, interestingly, the resolution professional of VIL was not involved by VOVL, the Appellant, Mr. P. N. Dhoot and Mr. R. N. Dhoot at any point in time in relation to the foreign Oil & Gas Assets. In the Writ Petition, VOVL did not raise any contention that the Oil & Gas Assets belong to VIL and hence should be resolved under the ongoing CIR Process of VIL (which had commenced on 6th June 2018) at the time of filing the Writ Petition. However, in July 2019, viz., after a lapse of almost 10 months from the date of filing of the Writ Petition, the Appellant filed MA 2385 of 2019 before the Adjudicating Authority praying that the foreign o....
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....C advisors. It is respectfully submitted that Dunn & Bradstreet in its Techno Economic Viability study of the Appellant's Withdrawal Proposal, after an in depth analysis of the economic viability of the proposal of the Appellant inter alia concluded "Based on the above assessment carried out and its impact on the envisaged cash flows there may be a shortfall in the debt serviceability proposed under the restructuring scheme". XI. It is submitted that the Respondent No. 2, after considering the Appellant's Withdrawal Proposal (including its commercial viability basis the documents and clarifications provided by the Promoters and the reports by the advisors of the CoC) rejected the Appellant's Withdrawal Proposal by an overwhelming majority of 98.14% voting share. It is respectfully submitted that except one financial creditor (namely ABG Shipyard Limited, which itself is a company undergoing liquidation currently), all the financial creditors who cast their vote rejected the Appellant's Withdrawal Proposal (including the dissenting financial creditors namely Bank of Maharashtra, IFCI Limited and SIDBI who have filed separate appeals against the Impugned Order). The Appellant is be....
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.... subsidiaries and VIL only had interest by virtue of its shareholding, VIL had itself requested to be released from its obligation as a co-obligor. The letter dated 21 November 2016 has been signed by the Appellant himself. In its request, one of the reasons cited by VIL was that it was not in a good financial position and its precarious financial position may not yield the best returns from the asset monetization of the Oil & Gas Assets. In lieu, VIL executed corporate guarantee to secure the financial assistance granted to VOVL and VHHL. A follow up letter dated January 17, 2017 on the same lines was also written by VIL to IDBI Bank Limited which further strengthens this understanding of the parties. VOVL even responded to SBI Letter dated December 18, 2018 and requested SBI to initiate the process of assessing the valuation of Oil & Gas Assets and undertake monetisation, and VOVL is ready and willing to do necessary things in this regard. Thereafter, Deed of Undertaking dated January 9, 2019 from VOVL, VHHL, VEBL and VINI was also executed in SBI's favour in relation to mutual decision taken to initiate process of valuation and monetisation of certain Oil & Gas Assets. XV. It ....
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....as field in which VIL directly holds a participating interest as being pooled together in the assets and liabilities for the purposes of consolidation. "81. ........ The argument was that the assets of each companies are validly charged to secure the loans, and the secured creditors will be protected even if the companies go into liquidation, however, the liquidation route may affect the rights of the other stakeholders. Thus, the consolidation route is going to be more beneficial to all the stakeholders, comparing the liquidation route. At this juncture it is worth to devote few more lines that group companies have been created within the parameters of law as a 'special purpose vehicle' hardly holding independent valuable assets but burdened with liability, Which may cause disadvantage if segregated. But after consolidation all the liabilities pooled together can be satisfied up to large extent against the value of common pooled assets, which are otherwise in control of a single entity. In this group Licenses, Good-will, Permits, Trademarks etc. are valuable but scattered all over the group entities. One more valuable asset is 'Oil & Gas field' acquired through joint venture and....
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....age did the Appellant challenge the approval of the resolution plan before the Adjudicating Authority. III. It is also submitted that the Appellant no standing to argue that the resolution plan is violative to Section 30(2) of the Code because the Appellant is neither an OC nor a FC of the CDs. Therefore, all the averments made by the Appellant in its appeal regarding the Resolution plan being discriminatory inter se the OCs and FCs is not tenable, baseless and liable to be rejected at the threshold. In any event, the resolution plan has adequate provisions adhering to the mandatory requirements of Section 30(2) and it is only upon examination of such provisions that the adjudicating Authority has approved the Resolution plan. In this regard it would not be out of place to mention that not even a single OC has challenged the resolution plan. Hence, the present appeal alleging that the resolution plan discriminates OCs is exfacie meritless. IV. Similarly, in so far as the allegations of the Appellant regarding the haricuts provided in the resolution plan to the OCs and the FCs is concerned, it is submitted that: a. The Appellant has no locus to make such averment; b. The com....
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....tay was passed by this Appellate Tribunal that the pleadings were not completed. In the meanwhile, the consolidated CIRPs concluded by way of approval of the Resolution plan of R-3 in terms of the approval order. Most pertinently, while CA(AT) (Ins) No. 299 of 2020 was pending, the Appellant continued to participate in the consolidated CIRPs and has also filed his proposal under Section 12A of the Code (which admittedly also does not include the four entities or their assets - a fact that has been suppressed in the present appeal). Hence, the Appellant by way of his conduct, acquiesced to the consolidated CIRPs and is now estopped from arguing that such consolidated CIRPs sought to have included the foreign oil and gas assets of the four entities. VII. It is also submitted that the Appellant is merely raising the aforesaid issue to sabotage and derail the CIRP upon approval of the resolution plan. Hence, the appellant's averment that foreign assets of four entities ought to have been considered in the consolidated CIRPs is plainly meritless and liable to be dismissed. VIII. The Section 12A proposal of the Appellant was placed for voting during the 19th meeting of the CoC 11.11.....
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....However, the Adjudicating Authority in IA No. 527/2019 has adjudged the agreement dispute in its impugned order and the same is stated below vide para 11 appearing in appeal paper book in CA(AT)(Ins) No.503 of 2021: "11. As far as IA 527 2019, praying for use of Brand name "Kelvinator" is concerned, we are of the considered view that the Agreement should continue for at least a year from the date of approval of the plan as per the existing Terms and Conditions as a transitional arrangement and subsequently it is upto both the parties to decide on the same as per their mutual understanding". 20. However, the Hon'ble Supreme Court in Civil Appeal No. 3045 of 2020 in Tata Consultancy Services Limited Vs. Vishal Ghisulal Jain, Resolution Professional, SK Wheels Pvt. Ltd. has held vide para 27 that NCLT does not have any residuary jurisdiction to entertain the contractual dispute and the same is stated below: "Para 27. - It is evident that the appellant had time and again informed the Corporate Debtor that its services were deficient, and it was falling foul of its contractual obligations. There is nothing to indicate that the termination of the Facilities Agreement was motivated b....
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.... of default when the application was filed by the Bank for initiation of CIRP. The Appellant has no locus standi to file the appeal at this stage and challenge the haircut. The Hon'ble Apex has repeatedly viewed that the commercial wisdom of the CoC is not amenable to judicial review. He has no authority to challenge the haircut. 23. However, the CoCs has categorically stated that Videocon Industries limited (VIL) and Videocon telecommunication ltd (VTL) were two largest accounts that were classified as NPA by banks on account of defaults and in respect of whom RBI had provided specific instructions as per Banking Regulations Act, 1949 for initiating insolvency proceedings. The RBI has sent a letter to SBI in its capacity as lead bank to resolve their debts outside the scheme of the Code till December, 13,2017 failing with insolvency proceedings under the Code are to be initiated against the companies before 31.12.2017. As a result of non-resolving the continuing default, the CIRP petition was filed on 01.01.2018 against VIL and VTL ; they are blaming the poor management of the appellant leading to such situation who is obstructing to frustrate and derail the CIRP and thwart all a....
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....ic money. What has revealed from the 3 banks/ financial institutions that the resolution plan provide the amounts to the appellant banks is less than the liquidation value which the bank will receive otherwise and therefore, contrary to Section 30 of the Code. Some discrepancies exist between Form-H and distribution excel sheet shared by SBI Caps. As it looks to us that nobody has disputed this aspect of difference in figure except that the RP has stated that these are estimated amount to be paid to the DFC as per Code and the CIRP Regulations. The RP has washed off his hands that he is not responsible for the figure provided by SBI Caps, while he himself has given estimated figure and has undertaken to provide correct figure at a later date. This does not seem to be appealing. 25. It is also revealed that the amounts to be paid to the banks will be determined at the time of payout in itself, is misconceived. Simply stating everywhere that it shall not be less than the amount to be paid to such creditors in accordance with Section 53 of the Code in the event of liquidation is just washing off his hands. It is also a fact that the direction by the Adjudicating Authority to the SRA ....
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....te that the CoC and the RP to conduct a fresh process of inviting fresh expression of interest and resolution plan from all interested Resolution Applicants etc., to safeguard the interest of all stakeholders and the public money. It has accepted the fact that the significant observations regarding the low value of the resolution plan and the haircut of such a high magnitude being suffered by various classes of stakeholders including the MSME, backbone of the Indian economy and other operational creditors under the Resolution plan requires to be reviewed by the CoC. It has also been stated in an unambiguous terms that they wish to give due consideration of observations in the impugned order and the stay order passed by this Tribunal on 19.07.2021. The CoC, majority of which are public sector banks and financial institutions dealing with public money is acting as the custodian of public trust and discharging statutory role. The CoC is vested with a duty of trust and care. The CoC power is not without responsibility and even Hon'ble Apex Court has made the CoCs decision on commercial matters as non-justiciable. Keeping in view these factors in mind, the public sector banks and financ....
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....management of the Company and are the key managerial personnel for the management of the Company. 34. There are instances when a particular proposal is disapproved initially by the Board of Directors of the Company, may be placed again before the Board and because of new material contained it may be reconsidered and approved by the Board. So it cannot be held that Board of Directors are not empowered to review their proposals whether approved or disapproved at a particular point of time. Shareholders are the owners of the Company and generally they are the appointing authority of the Director either in the Annual general meeting of the Company or in the Extra ordinary general meeting of the Company. Based on Board approved resolution as per the requirement of the Companies Act, whether it is of Companies Act, 1956 or Companies Act, 2013. Certain resolutions require approval of the shareholders as per provisions of the Companies Act. These shareholders based on the wisdom approves a particular proposal or disapproves a particular proposal at a particular point of time. They also can change their approval based on input provided at a later stage by a majority votes or otherwise or m....
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....d with in the resolution plan then they can approve the plan. So, the Adjudicating Authority was supposed to see whether the DFCs have been paid not less than the amount to be paid to such creditors in accordance with Section 53(1) in the event of a liquidation of the CD. He was not supposed to suggest any modification on the plan which it has been done in the impugned order dated 08.06.2021 in para 24, 5 & 6. These suggestions are falling in the domain of CoCs and the Adjudicating Authority should have considered to send back for reconsideration to the CoC. For brevity and clarity Section 30 & 31 of the Code is reproduced below for ready reference: Section 30: Submission of resolution plan. (1) A resolution applicant may submit a resolution plan 1 [along with an affidavit stating that he is eligible1A under section 29A] to the resolution professional 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 ....
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....on of that Act or law.] (3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in sub-section (2). (4) The committee of creditors may approve a resolution plan by a vote of not less than 56 [sixty-six] per cent. of voting share of the financial creditors, after considering its feasibility and viability, [the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub-section (1) of section 53, including the priority and value of the security interest of a secured creditor] and such other requirements as may be specified by the Board: Provided that the committee of 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....
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....the order of approval under sub-section (1),- (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. (4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (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, 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." 38. The CoCs are the best judge to analyze, pick up and take prudent commercial decision for the business but they are also subjected to....
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.... Book / Form - H Rs. 71,433 Crore. The said waiver is over Rs. 62,000 Crore, even the claim of the financial creditors have been settled merely 5%. The Adjudicating Authority has no doubt raised a question whether there has been a leak of liquidation value in the resolution process. Concerns raised by the lenders regarding distribution mechanism provided to the Dissenting Financial Creditors in the resolution plan and the contentious issue of distribution amount. All these are not complied with in accordance with Section 31(1) which is a requirement for satisfaction of Adjudicating Authority. Section 30(2) of the Code has also not been complied with. The said plan provides for payment to the Dissenting Financial Creditors by way of NCD and Equities which is impermissible as per the Code. Paras 3.5.4, & 3.5.2 of the Resolution Plan (at page 237 -239 of the Appeal paper book) are not in accordance with the directions given by the Hon'ble Supreme Court in the case of Jaypee Kensington Boulevard Apartment Welfare Association and Ors. Vs. NBCC (India) Ltd. Ors., (Civil Appeal No. 339 of 2020 decided on 24.03.2021) which are as follows: "124. To sum up, in our view, for a proper and me....
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....suggests, requests both CoC and the Successful Resolution Applicant to increase the pay-out amount to these Operational Creditors especially MSMEs as this is the First Group Consolidation Resolution Plan of 13 companies having large number of MSMEs. 2. Further it is also observed that by just paying only Rs. 262 Cores (8.84% of total plan value) (Cash balance available with the Corporate Debtors is approx.. Rs. 200 Crore) the Successful Resolution Applicant will get possession of all the 13 Corporate Debtors to run these units and the first payment of Rs. 200 Crore as part redemption amount of NCDs will be paid within 25 months from the closing date and the balance amount of Rs. 6,25,00,00,000/ each is spread over in 4 instalments starting from 3rd year onwards up to sixth year from the closing date and the interest rate for the NCDs is also a nominal of only 6.65% P.A payable annually. It may also be noted that at the time of granting loan, restructuring, approving the resolution plan with such a huge hair cut also the financial institutions, Committee of Creditors consisting 35 members exercised their Commercial Wisdom. Since this is the Commercial Wisdom of the COC and as per ....
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....epresentatives respectively in addition to the Applicant's Legal Counsel. Such a large number of Authorised Representative for the Applicant indicates either he is not fully prepared or monitory benefit (fees) to these Representatives. Therefore, we request IBBI to examine this issue as well and appropriate guidelines may be issued. 24. In the light of above stated discussions and the law has been settled, we find that the proposed Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39 (4) of the Regulations. The Resolution Plan is not found in contravention of any of the provisions of Section 29A of the Code and is in accordance with Law. Hence the same deserves approval with following observation and direction to the CoC to make payments as per liquidation value to all the dissenting Financial Creditors in cash upfront before any payment is made to assenting Financial Creditors as per the judgment of the Hon'ble Supreme Court in the matter of Jaypee Kensington Boulevard Apartments Welfare Association & Ors. Vs NBCC (India) Ltd. & Ors. matter. The above para of the impugned order reflects that the Adjudicating Authority has mad....
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....dismissed by Supreme Court), wherein the approval once granted to the recommendations of the selection committee to appoint a teacher, was considered to be capable of being reviewed and even withdrawn. Relevant portion of the judgment is quoted below: "61. By the very nature of the power that is conferred in these authorities, it is apparent that it coupled with a duty i.e. to maintain discipline and order of highest nature in the academic field. If that is the obligation to the society as a whole that these authorities have to discharge, then, to hold that they will be powerless or that they do not possess any implied or incidental power to withdraw or cancel the approval, would make the M.U.Act unworkable and its provisions meaningless. In several cases of this nature, the Hon'ble Supreme Cot has applied doctrine and principle of implied power. That principle is founded on the premises that conferment of a statutory power would necessarily take within its import he authority to use all means to make effective and meaningful.(...)" 45. All these reflect that power to reconsider any decision is within the domain of CoC and even Hon'ble Apex Court in Catena of judgment held that ....
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....his power to remand back as under: "....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. The reasons given by the Committee of Creditors while 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." 46. Hence, we are of the considered view that the resolution plan is not com....
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....one thousand crore or turnover of more than rupees three thousand crore; or (B) in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars or turnover more than fifteen hundred million US dollars; or (ii) the group, to which enterprise whose control has been acquired, or is being acquired would belong after the acquisition, jointly have or would jointly have,- (A) either in India, the assets of the value of more than rupees four thousand crore or turnover of more than rupees twelve thousand crore; or (B) in India or outside India, in aggregate, the assets of the value of more than two billion US dollars or turnover of more than six billion US dollars; or (c) any merger or amalgamation in which- (i) the enterprise remaining after merger or the enterprise created as a result of the amalgamation, as the case may be, have,- (A) either in India, the assets of the value of more than rupees one thousand crore or turnover of more than rupees three thousand crore; or (B) in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars or turnover of more than fifteen hundred milli....