TaxTMI 
TaxTMI 
2024 (2) TMI 873
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....erred to as "Impugned Order") passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench, Court- II) in IA No.3016 of 2023 in CP (IB) No. 1048 (ND)/2019 wherein the Resolution Professional had sought extension of the CIRP period of the Corporate Debtor by 60 days. By the impugned order, the Adjudicating Authority while allowing the CIRP extension of 60 days also directed the Resolution Professional to issue a fresh Form-G in the CIRP of the Corporate Debtor which was dehors the relief prayed for. Aggrieved by the impugned order, the present appeal has been filed by the Appellant. 2. The brief facts of the case are as outlined below: - * The Corporate Debtor was admitted into CIRP by the Adjudicating Authority on 26.02.2020 on a Section 9 petition filed by the Operational Creditor. * The Resolution Professional ("RP" in short) issued Form-G on 5 occasions seeking EOIs for submission of Resolution Plans. The CoC was constituted with Union Bank of India (84.90%), Axis Bank (6.48%), ICICI Bank (6.18%) and Yes Bank (2.44%). * Three Resolution Plans were received. However, as none of these plans were approved by the CoC in its 20th ....
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.... * The Adjudicating Authority on 30.11.2023 disposed of I.A. No. 3016 of 2023 by extending the CIRP period by 60 days. However, it also directed the RP to issue fresh Form-G to invite EOIs from other resolution applicants also and to complete the CIRP process within the extended period of 60 days. * The Appellant has preferred this Appeal assailing the impugned order on the ground that the Adjudicating Authority directed the publication of fresh Form-G while the prayer made before the Adjudicating Authority was only for the purpose of extension of CIRP period by 60 days. 3. The Learned Sr. Counsel for the Appellant while making his submissions adverted attention to the orders of this Tribunal by which the recall order of the Adjudicating Authority dated 08.02.2023 was set aside and the CoC allowed to consider the Resolution Plan which had been submitted by the Appellant on 30.01.2023. It was also submitted that in pursuance to this Tribunal's orders, the Resolution Plan of the Appellant was deliberated at length in the 23rd CoC meeting held on 12.05.2023. The CoC in the said meeting decided to only consider the Resolution Plan of the Appellant. The CoC members i....
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....oC in the 23rd meeting had resolved to file an application before the Adjudicating Authority for extension of the CIRP time period by 60 days as this extension was required to enable consideration and voting on the resolution plan of the Appellant. It was added that since I.A. No. 3199/2023 had already been filed by the RP seeking liquidation of the Corporate Debtor and during its pendency, I.A. No. 3016/2023 was also filed seeking extension of time and as both the I.A's contained prayers in contradiction to each other, the CoC in its 25th meeting held on 01.08.2023 resolved to withdraw I.A. No. 3199/2023. This resolution for withdrawal of liquidation application was passed by the CoC with 97.56% votes. 8. It was also submitted by the Learned Counsel for the RP that during the hearing of I.A. No. 3016/2023, since an oral enquiry was made by the Adjudicating Authority from the RP whether a fresh Form-G be issued, this issue was put to discussion before the CoC members in the 26th meeting and after due deliberations, the CoC in the exercise of its commercial wisdom, decided not to publish any fresh Form-G. It was added that the minutes of the CoC meetings clearly makes a note that....
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....ng that: "We are conscious that that the object of the IBC, 2016 is to rescue the CD in distress. Thus, the plea put forth by the Applicant in the IA deserve to be accepted." 12. The Adjudicating Authority however recalled this order on 08.02.2023. This recall order was subsequently challenged before this Tribunal. This Tribunal by its order dated 21.02.2023 directed adjournment of the liquidation application and by subsequent order on 25.04.2023 permitted the Appellant to file the Resolution Plan. The relevant excerpts of the order is as extracted below: "2. Learned Counsel for the Union Bank of India having 86% vote share submits that Union Bank has no objection if the plan submitted by the Appellant is considered. 3. Learned Counsel for Appellant submits that plan has already been submitted in pursuance of the order dated 16.01.2023 on 30.01.2023. Hence, there was no occasion to recall the order dated 16.01.2023. 4. In view of the statement made by the Learned Counsel for the parties, we are of the view that plan having already been submitted there was no occasion for recall of the order 16.01.2023, moreover, only prayer made was to make certain cor....
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....l be considered in accordance with the appropriate NCLAT directions obtained by PRA." ( Emphasis supplied ) 15. We further notice that the same meeting also taking cognizance of the fact that CIRP period had already expired in June, 2022 decided to pass a resolution seeking extension of CIRP period by 60 days to enable consideration and voting on the Resolution Plan submitted by the Appellant. This issue was deliberated as Item No.10 in the CoC, the relevant portions of the minutes being as reproduced below: "Item No. 10 To approve for extension of CIRP period and seeking exclusion of time lost in litigation from CIRP period The Chairman shall apprised the CoC members that the 330 days of CIRP period have expired on 18.06.2022 and the liquidation application was filed in June 2022. However, the same is pending adjudication. As discussed in agenda item no. 6 above, the plan submitted by Mr. Jatindra Pal Singh Hanjra, through Authorized Representative, Mr. Ajay Nagpal is to be considered by CoC. The Chairman apprised the need to apply for extension of CIRP period and seeking exclusion of period lost in litigation. After discussion and d....
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....ard. In case, any such directions were given CoC will abide by them. 2. The Hon'ble NCLAT vide order dated 25.04.2023 has only specifically referred to consideration of plan submitted by Mr. Jatinder P. Hanjra as allowed by order of Hon'ble NCLA T dated 16.01.2023. There was no direction to consider plan of any other party or to publish form G. In accordance with the prayer sought in appeal, submission of UBI, as captured in the order, also related to consideration of plan of Mr. Hanjra only. Thus no deviation from the intent of the order shall be made by considering plans of other applicants. 3. Resolution plans of the earlier three PRAs were of a lower value than the resolution plan of offered by Mr. Hanjra. The values of the plans (without CAPEX and Contingency Reserve) as submitted by the earlier three PRAs and by Mr. Hanjra is as follows : S.No. 1 2 3 4 Name of PRA Anuj Goyal Vickey Gupta Pankaj Saraogi and Ranjana Saraogi Jatinder P. Hanjra Original Revised Secured FC (in Rs. Crore) 7.00 10.55 14.15 18.10 19.00 Unsecured FC....
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....t granted and Regulation 18(2) do not permit CoC to vote upon any resolution having impact on resolution plan, the voting on resolution plan cannot be conducted in the present circumstances. Thereafter, Mr. Ajay Nagpal took a leave from CoC. It was the concluded that final negotiation were done with the PRA and once the exclusion/extension from Hon'ble NCLT is granted in IA 3016 of 2023, then only the resolution plan negotiated by the CoC will be put to vote." (Emphasis supplied) 18. Soon after the 26th CoC meeting, the I.A. No 3016/2023 was disposed of by the Adjudicating Authority on 30.11.2023 by extending the CIRP period by 60 days. Vide this impugned order, "in the interest of justice and maximization of the value of the Corporate Debtor", it directed the RP to invite fresh EOI through wider publication of Form-G to enable any prospective resolution applicant to participate in the resolution process. It also directed that the completion of the process within 60 days extended period. 19. Given the facts and circumstances of the present case as narrated above, we find that despite lapse of four years, no resolution had fructified so far. Inspite ....
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....ially affected the interests of the Appellant as well as cause delay in the CIRP process which would diminish the health and value of the Corporate Debtor. 22. It would be relevant and constructive to note the overarching objectives of the IBC as enshrined in the Preamble which reads as follows: "An Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership persons and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto." ( Emphasis supplied ) The same aspirations resonate in the Statement of Objects and Reasons of this legislative enactment. The mandate and objective of the IBC clearly emphasizes reorganization and insolvency resolution of corporate debtor in a time bound manner for maximization of the value of the assets. Speed is the essence of IBC. The maximizat....
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....'s commercial wisdom. And it is here that primacy of the commercial wisdom of the CoC comes into play. The Adjudicating Authority cannot foist its own wisdom upon the CoC. The supremacy of commercial wisdom of the CoC has been reaffirmed time and again by the Hon'ble Supreme Court. The Hon'ble Apex Court in its judgement in "K. Sashidhar Vs. Indian Overseas Bank and Ors (2019) 12 SCC 150" has held: "52.................... Besides, 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. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their them of experts. The opinion on the subject-matter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the "commercial wisdom" of the in....