TaxTMI 
TaxTMI 
2024 (10) TMI 464
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.... Singh and Ms. Suvarna Kashyap, Advocates for R-1, Mr. Milan Singh Negi, Mr. Nikhil Kumar Jha and Ms. Aakriti Gupta, Advocates for R-2 & R-3, Mr. Gaurav Mitra, Sr. Advocate with Mr. Ankit Acharya and Ms. Lavanya Pathak, Advocates for Intervenor JUDGMENT ASHOK BHUSHAN, J. These two Appeals have been filed by the Appellant challenging the Order dated 25.06.2024 passed by the Learned Adjudicating Authority (National Company Law Tribunal, Mumbai Bench - IV). 2.In Comp. App. (AT) (Ins.) No. 1542/2024, the Appellant has challenged the Order dated 25.06.2024 in I.A. No. 910/2024 filed by the Appellant. Appellant has also sought to challenge the Order dated 25.06.2024 passed in I.A. No. 5819/2023, i.e., Plan approval Application. In Comp. App. (AT) (Ins.) No. 1552/2024, Appellant has challenged the Order dated 25.06.2024 passed in I.A. No. 2519/2024 filed by the Appellant. The Adjudicating Authority by the Impugned Order has rejected I.A. No. 2519/2024. By the same Order dated 25.06.2024, Adjudicating Authority has allowed the I.A. No. 5819/2023 filed by the Resolution Professional (`RP'), for approval of the Resolution Plan and by the same Order, dismissed I.A. No. 910/2024 fi....
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....nd undervalued Assets of the Corporate Debtor. xi. Reply was filed by RP to the Application, opposing the same pleading that no proceedings have been remitted by the SBI. RP pleaded that all facts have been placed before the CoC. Resolution Plan has been approved, which include the proposal of Successful Resolution Applicant (`SRA') on relinquishment of their rights in favour of the Financial Creditor "pertaining to money which may be recovered by the Corporate Debtor from third-party". xii. RP submitted that Resolution Plan has already dealt with any receipt of money by the Corporate Debtor. xiii. As noted above, the Adjudicating Authority has rejected the I.A. No.2519/2024, by Order dated 25.06.2024 and by a separate Order of the same day allowed the I.A. filed by the RP for approval of the Plan and rejected I.A. No. 910/2024 filed by the Appellant. 4.We have heard Mr. Krishnendu Dutta Learned Sr. Counsel appearing for the Appellant. Mr. Gopal Jain has appeared for the Respondent No. 1/RP. Mr. Milan Singh Negi has appeared for Respondents No. 2 & 3, who are the SRA. Mr. Gaurav Mitra Learned Sr. Counsel has appeared for the Intervener. 5.Mr. Krishn....
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....ion filed by the Appellant being I.A. No. 2519/2024 has been rejected by the Adjudicating Authority incorrectly. 6.Mr. Gopal Jain, Counsel appearing for the RP submits that RP has opposed both the IAs filed by the Appellant. Appellant was ex-Director who had resigned much before the initiation of CIRP of the Corporate Debtor, had no right either to participate in the CIRP or to receive any information or copy of the Resolution Plan. The Judgment of the Hon'ble Supreme Court in `Vijay Kumar Jain' (Supra) has no application in the facts of the present case. It is submitted that the ex-Director and Promoters who were the Directors of the Corporate Debtor at the time of commencement of the CIRP were allowed to participate in the CIRP Process and were present throughout, insofar as valuation of the Corporate Debtor is concerned, the RP obtained the Valuation Report from registered Valuers as per CIRP Regulations, 2016, and no Member of the CoC have ever raised any objection to the Valuation. 7.Learned Counsel for SRA supported the Impugned Order passed by the Adjudicating Authority and submits that CoC has approved the Resolution Plan with overwhelming majority with 97.54% vote sh....
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.... that no proceed of fixed deposit were received by the Corporate Debtor during the CIRP period. Details were given in Paragraphs 12 to 16 of the Reply. 11.It was further pleaded by the RP that relevant Clause in the Resolution Plan provides that any cash/bank balance in the accounts of the Corporate Debtor as on the date of approval of the Resolution Plan by appropriate authority after CIRP cost payments could be distributed between Financial Creditor over and above the amount stated above. In Para 20 of the Reply following was pleaded: "20. It is pertinent to state that as pet the said resolution plan, approved by the COC, any cash/bank balance in the accounts of the Corporate Debtor as on the date of approval of resolution plan by appropriate adjudicating authority after CIRP Cost payments shall be distributed between financial creditors. It is pertinent to state that the said amount is over and above the money as proposed by the Resolution Applicant in its resolution plan. The relevant clause of the resolution plan has been reproduced herein below- "Any cash/ bank balance in the accounts of corporate debtor as on the date of approval of resolution plan by ap....
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....ver. Albert the Resolution Plan was reserved for Orders on 06.05.2024, the application-at- hand has been filed much belatedly. Notwithstanding the same, the Resolution Plan in consideration hereto has specifically dealt with all eventualities pertaining to recovery of monies and/ or receivables in relation to the Corporate Debtor, and the Committee of Creditors of the Corporate Debtor are unambiguously in principle satisfaction with the same. We therefore are of the shared view that the same does not warrant this Tribunal's interjection." 14.The submission of the Counsel for the Appellant is that valuation of the Corporate Debtor was not correctly done and the amount of Rs.20 Crores/- which was to be received from out of Performance Bank Guarantee issued by the Corporate Debtor has not been taken note in the Valuation. Suffice it to say that valuation was conducted by the RP in accordance with CIRP Regulations, 2016. Adjudicating Authority has also noticed the Reply of the RP where RP has written to PWD to transfer of balance as against the same FDRs to the Corporate Debtor, but no proceeds have been remitted. 15.We, thus are of the view that no error has been committed b....
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....Supra), the emphasis of the Counsel for the Appellant is that in view of the law laid down by the Hon'ble Supreme Court in `Vijay Kumar Jain' (Supra), Appellant as ex-Director was entitled copy of the Resolution Plan and all other information and documents. 19.We need to first notice the Judgment of the Hon'ble Supreme Court in 'Vijay Kumar Jain' (Supra). Vijay Kumar Jain was a case where the Appeal was filed in the Hon'ble Supreme Court by Appellant who was Member of the Suspended Board of Directors. In the above case also the prayer of the Vijay Kumar Jain for direction to the RP to provide relevant documents including the Resolution Plan was rejected by the NCLT. Facts of the case noticed in Paragraphs 1 & 3 of the Judgment, are as follows: "1. The present appeal arises out of an Appellate Tribunal's judgment [Vijay Kumar Jain v. Standard Chartered Bank Ltd., 2018 SCC OnLine NCLAT 855] rejecting the appellant's prayer for directions to the resolution professional to provide all relevant documents including the insolvency resolution plans in question to members of the suspended Board of Directors of the corporate debtor in each case so that they may meaningful....
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....and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which provides that contents of the Notice for Meeting. Regulation-21 which is relevant is as follows: "21. Contents of the notice for meeting. -(1) The notice shall inform the participants of the venue, the time and date of the meeting and of the option available to them to participate through video conferencing or other audio and visual means, and shall also provide all the necessary information to enable participation through video conferencing or other audio and visual means. (2) The notice of the meeting shall provide that a participant may attend and vote in the meeting either in person or through an authorised representative: Provided that such participant shall inform the resolution professional, in advance of the meeting, of the identity of the authorised representative who will attend and vote at the meeting on its behalf. (3) The notice of the meeting shall contain the following- (i)a list of the matters to be discussed at the meeting; (ii)a list of the issues to be voted upon at the meeting; and (iii)copies....
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.... clear that the resolution professional can take an undertaking from members of the erstwhile Board of Directors, as has been taken in the facts of the present case, to maintain confidentiality. The source of this power is Regulation 7(2)(h) of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, read with Para 21 of the First Schedule thereto. This can be in the form of a non-disclosure agreement in which the resolution professional can be indemnified in case information is not kept strictly confidential." 24.Hon'ble Supreme Court in Para 20 has also held that expression "documents" is a wide expression which would certainly include the Resolution Plans. Para 20 of the Judgment is as follows: "20. It is also important to note that every participant is entitled to a notice of every meeting of the Committee of Creditors. Such notice of meeting must contain an agenda of the meeting, together with the copies of all documents relevant for matters to be discussed and the issues to be voted upon at the meeting vide Regulation 21(3)(iii). Obviously, resolution plans are "matters to be discussed" at such meetings, and the erstwhile Board of....