TaxTMI 
TaxTMI 
2024 (1) TMI 585
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....with a 100 % voting share in its 12th meeting which was held on 26.06.2023. The Adjudicating Authority, while allowing the Application observed that the Resolution Plan was in accordance with Sections 30 & 31 of the Code and that it also complies with Regulations 38 & 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 3. Learned Counsel for the Appellant strenuously contended that on account of ill health, the Appellant could not actively participate during the CIRP and despite his conditions filed an Application seeking to intervene against the approval of the Resolution Plan which was not considered by the Adjudicating Authority. It is contended that the CoC was illegally constituted without including Edelweiss Asset Reconstruction Company (EARCL), which was the assignee of the debt from Federal Bank on 10.12.2012, enjoying a charge of Rs. 5.21 Crores plus interest in relation to a Corporate Guarantee from the Corporate Debtor in favour of the debt availed by another group Company, namely Orient Extraction Pvt. Ltd. It is submitted that neither Edelweiss nor Federal Bank had filed a Claim with the RP. It is contended that had Edelweiss been i....
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....9 of the Code. It is submitted that the CoC has approved the Resolution Plan with 100 % majority share and the commercial wisdom of the CoC is non-justiciable. It is submitted that the Operational Creditor who had a claim of more than 10 % of the debt could participate in the CoC and had voluntarily agreed to accept an amount lower than the Liquidation value. It is argued that the reliance placed on Regulation 6A of CIRP Regulations is without any basis as it came into force only on 16.09.2022 and the public announcement in Form A was made on 16.04.2022. 7. It is seen from the record that Federal Bank had transferred its debt to Edelweiss but did not chose to file any Claim pursuant to the public announcement in Form A in accordance with Regulation 6 of CIRP Regulations, 2016. Having not exercised its right in the form of filing a Claim, the Appellant cannot have any grievance that Edelweiss was not included in the CoC. It is pertinent to mention that the Appellant / Promotor did not raise any objections regarding the constitution of the CoC, having had the Notice and the opportunity to do so as he had the locus to attend the CoC meetings. The only reason given by the Learned Coun....
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.... debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. The Board referred to is established Under Section 188 of the I&B Code. The powers and functions of the Board have been delineated in Section 196 of the I&B Code. None of the specified functions of the Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not -16- to exercise their commercial wisdom during the voting on the resolution plan Under Section 30(4) of the I&B Code. The subjective satisfaction of the financial creditors at the time of voting is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. Th....
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....n exercise of its business decision." 150. It will therefore be clear, that this Court, in unequivocal terms, held, that the appeal is a creature of statute and that the statute has not invested jurisdiction and authority either with NCLT or NCLAT, to review the commercial decision exercised by CoC of approving the resolution plan or rejecting the same. 151. The position is clarified by the following observations in paragraph 59 of the judgment in the case of K. Sashidhar (supra), which reads thus: "59. In our view, neither the adjudicating authority (NCLT) nor the appellate authority (NCLAT) has been endowed with the jurisdiction to reverse the commercial wisdom of the dissenting financial creditors and that too on the specious ground that it is only an opinion of the minority financial creditors....." 152. This Court in Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) after reproducing certain paragraphs in K. Sashidhar (supra) observed thus: "Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within t....
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....e relevant passage (para 54) of which we have reproduced in earlier part of this judgment. The case of MSL in their appeal is that they want to run the company and infuse more funds. In such circumstances, we do not think the appellate authority ought to have interfered with the order of the adjudicating authority in directing the -successful resolution applicant to enhance their fund inflow upfront." 155. This Court observed, that the Court ought to cede ground to the commercial wisdom of the creditors rather than assess the resolution plan on the basis of quantitative analysis. This Court clearly held, that the appellate authority ought not to have interfered with the order of the adjudicating authority by directing the successful resolution applicant to enhance their fund inflow upfront." ( Emphasis Supplied ) 9. In the instant case, the approval of the Resolution Plan below the Liquidation value is within the commercial wisdom of the CoC as the Code does not expressly bar that the Resolution Plan value should be over and above the Liquidation value. Hence, there is no material irregularity. As regarding the contention of the Learned Counsel for the Appellant that the Opera....