TaxTMI 
TaxTMI 
2024 (2) TMI 774
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....f law have been heard together and are being decided by this common judgment. 2. Brief facts of the case necessary to be noticed for deciding these Appeals are : - 2.1. On an application filed under Section 7 by Financial Creditor- 'Sreenath Finvest Pvt. Ltd.', an order of commencement of Corporate Insolvency Resolution Process was passed by the Adjudicating Authority on 03.11.2021. Mr. Jitendra Lohia was appointed as the Interim Resolution Professional (IRP) who issued public announcement on 17.11.2021. Form G was published on 17.01.2022 inviting Expressions of Interest (EoI) for the Corporate Debtor- 'Pami Metals Private Limited'. Appellant, promoter of the Corporate Debtor who is an MSME has submitted an EoI on 02.02.2022. Two other Resolution Applicants including 'Eastern Copper Manufacturing Company Pvt. Ltd.' and 'Sreenath Finvest Private Limited' submitted their EoIs. All the three Resolution Applicants filed the Resolution Plans. In the 5th CoC meeting held on 11.04.2022, Resolution Professional informed the CoC that he has received three Resolution Plans. In the 6th CoC meeting held on 20.06.2022, discussion on Resolution Plans submitted by PRAs was made. The Appellant w....
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....and / or quashing the voting process whereby the resolution Plan of the Applicant was rejected and the purported resolution plan of respondent no. 16 was approved. b. Appropriate and necessary orders be passed thereby setting aside and / or quashing the evoting result and/or the scrutinizer's e-voting dated 21 October, 2022; c. Appropriate and necessary orders be passed thereby sending back the matter to the CoC for reconsideration and fresh voting on the resolution plans after giving adequate opportunities to the applicant to clarify, and if required to negotiate and revise his plan. d. Appropriate order be passed for the removal of the present RP and an appointment of the new RP to conduct the CIRP transparently. e. An Appropriate order be passed to stay the notice dated 10.11.2022 issued by the State Bank of India, till the disposal of this application. f. Appropriate orders and directions be passed upon the RP and the CoC to adopt Swiss challenge method in the voting process for approval of the resolution plan. g. An order of injunction be passed restraining the respondents from taking any steps in respect of the e-voting result and/or the scrutinizer'....
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....ken decision of approval of the plan of Respondent No.16 in its commercial wisdom which cannot be questioned by the Appellant before the Adjudicating Authority. The jurisdiction of the Adjudicating Authority and this Appellate Tribunal to sit in appeal over commercial wisdom of the CoC is not available. It is submitted that in the plan submitted by the Appellant, Appellant has proposed sale of the Calcutta Factory for making the payment in which factory SBI has a charge. All aspects of the plan were duly considered and decision was taken by the CoC in the best interest of the Corporate Debtor. 6. Learned Counsel for the SRA also supporting the submission of the Resolution Professional submits that the SRA has given the best plan which was found viable by the CoC. The plan of SRA was duly considered by the CoC and approved. 7. We have considered the submissions of the Counsel for the parties and perused the record. 8. From the facts as noticed above, it is clear that the Resolution Plan which was submitted earlier by the Appellant did not have EMD, hence, it was held to be non-compliant and in the Swiss Challenge Process which was undertaken between Respondent No.5 and Respondent....
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....break up regarding the payments proposed to the creditors in the resolution plan. To which Mr Damani had replied that he had proposed a payment of Rs 8.15 Crores to secured financial creditors, Rs 2.00 crores to unsecured financial creditor, Rs 24.50 lacs to employee and workmen and Rs.1.60 crore to operational creditors. Mr Dhananjay further enquired that whether the price offered in the resolution plan is final or it can be negotiated further to which Mr Damani had replied that he may further discuss although he has given his best value. The Chairman then said that if after evaluating the plan of Mr Damani any changes are required to be made in the resolution plan then the same shall be sent to him in the email and if so required the changes shall be made through addendum to the resolution plan. The Chairman further informed that the last date for the closure of CIRP is 27.10.2022 so that all the members have to expediate the process as CIRP is a time 2022 so that all the d that coc members must also simultaneously evaluate the plan & email their observation or queries on the plan. It was informed that the next CoC meeting would be called shortly within few days after plan of Mr.....
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....e revised resolution plan, he would alongwith other details and documents would circulate the same to all the CoC members through email for considerations. Further pursuant to the discussion in the last COC meeting where the chairman had requested Mr Damani to submit the declaration and the KYC documents of MBGA Hotels Pvt Ltd and Mr Vijay Kumar Mundhara were submitted by Mr. Damani to the chairman before the members of the COC in original and were also sent through email. That Mr Damani had further submitted during the CoC meeting the declaration of all the investors who shall invest in the resolution plan of Pami Metals Pvt Ltd along with their declaration on the networth. Resolution professional further asked Mr. Damani to give the details about the resolution plan submitted by him to which he stated that his resolution plan takes care of interest of all the stakeholder of the corporate debtor and that he has proposed total plan value of Rs. 12 Crores and further Rs.3 crores for working capital towards improving the operations in the company. It was stated that Rs.815.50lac is proposed to be paid to secured financial creditors, Rs.200lac proposed to be paid to unsecured financia....
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....e Resolution Plan of Mr.Rajesh Damani be added as the agenda item for voting alongwith other two resolution plans which has already been placed for voting. Resolution Professional further mentioned that the CoC members can vote simultaneously of all the resolution plan or any of the plans, and that the agenda if technically possible would be added in the existing voting lines or separate voting items would be added for consideration by the CoC member. It was discussed that the voting lines should be kept open at lease till 20th October 2022 6 PM, for the voting on all the agenda items including the agenda items as was placed in the previous CoC meeting. Following additional Resolution would be placed for E-Voting : " Resolved that , after considering the feasibility and viability of the Resolution Plan and such other requirements as specified in the appropriate sections of the Insolvency and Bankruptcy Code 2016 and Other Regulations as specified under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 including amendments, if any, by the Board, the Committee of Creditors, in pursuance to Sec. 30 of the Insolve....
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....sed sale of the Calcutta factory in which State Bank of India had a charge. Thus, all aspects of the plan including the plan value of Appellant as well as Respondent No.16 were in the knowledge of the CoC and were deliberated before voting. We, thus, are of the view that the Resolution Plan was approved by the CoC after due consideration. It is well settled that the commercial wisdom of the CoC in approving the Resolution Plan is not open to judicial review and there are very limited ground to interfere with the decision i.e. only when the plan is in violation of any statutory provision like Section 30(2) of the Code. Hon'ble Supreme Court in "Committee of Creditors of Essar Steel India Ltd. vs. Satish Kumar Gupta & Ors.- (2020) 8 SCC 531" has laid down following in paragraph 61:- "61. Thus, it is clear that since corporate resolution is ultimately in the hands of the majority vote of the Committee of Creditors, nothing can be done qua the management of the corporate debtor by the resolution professional which impacts major decisions to be made in the interregnum between the taking over of management of the corporate debtor and corporate resolution by the acceptance of a resoluti....
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....e for consideration in the 8th and 9th CoC meeting. Adoption of Swiss Challenge Method is enabling provision which can be adopted by the CoC. No infirmity can be found in the consideration of the plan of the Appellant if CoC did not adopt any Swiss Challenge Method. 16. As far as the plan value which has been offered by the Appellant and the plan value which has been offered by Respondent No.16 and various payments offered in both the plans are in the domain of the commercial wisdom of the CoC and this Court shall not sit in appeal over the said decision nor it is jurisdiction of this Court to compare the plan offers submitted by the Respondent No.16 and Appellant and come to a contrary conclusion. The plan submitted by the Appellant have been duly considered and voted upon which could not muster the requisite vote, there is no error in the order passed by the Adjudicating Authority allowing IA No. 1330 of 2022 approving the Resolution Plan. 17. The Adjudicating Authority while considering IA No. 1523 of 2022 filed by the Appellant has considered all submissions advanced by the Appellant and has also returned a finding that the plan of the Appellant was deliberated upon and found....