TaxTMI 
TaxTMI 
2025 (2) TMI 805
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....onal Company Law Tribunal), Kolkata Bench (Court-I), Kolkata passed in IA No.1490/KB/2023 approving the Resolution Plan submitted by the Successful Resolution Applicant (SRA) and order passed in IA No.1407/KB/2023 by which application filed by the Appellant objecting to the Resolution Plan has been rejected. The Appellant an Unsuccessful Resolution Applicant aggrieved by the aforesaid two orders has filed these two Appeals. 2. Brief facts of the case necessary to be noticed for deciding the Appeals are:- 2.1. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor- Indian Pulp and Paper Private Limited commenced on 22.07.2022. Resolution Professional published Form G- invitation for submission of Expression of Interest (EoI) on 23.10.2022. Last date for submission of EoI was 08.11.2022. Appellant submitted its EoI with a Consortium member Bhagwati Vintrade Private Limited. A list of Prospective Resolution Applicants (PRAs) was published on 14.11.2022 in which name of the SRA - Pinax Paper Mills Ltd. and Pinax Steel Industries Pvt. Ltd. was not there. The last date for submission of the Resolution Plan was extended till 10.01.2023. Resolution Plan was s....
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....ls Private Limited in consortium with Pinax Steel Industries Private Limited 2.2. No Resolution Applicants raised any objection against the extension of timeline or invitation to submit revised Resolution Plan. Last date for submission of the Resolution Plan being 27.02.2023 was extended till 02.03.2023. Resolution Professional received Resolution Plans from Brand Steel & Power Limited, Green Valliey Industries Limited and Pinax Paper Mills Private Limited. RKG Fund opted to continue with their earlier Resolution Plans. All Resolution Plans were opened in the 13th CoC meeting held on 06.03.2023. In the 14th CoC meeting held on 21.04.2023, all representatives of Resolution Applicants were invited to present their plans. Resolution Professional informed all the Resolution Applicants that the CoC is looking forward to an upward revision of the amount offered under the Resolution Plan and the Resolution Applicants may submit a revised upward financial offer and modify their plans by 27.04.2023. No objection was raised by any of the Resolution Applicants. Resolution Professional received financial offer only from two Resolution Applicants namely- Brand Steel & Power Limited, and Pina....
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....rivate Limited was not included in the list of PRA which was published by the Resolution Professional. On 14.11.2022, Resolution Plans were submitted by the Appellant and other two applicants which came to be opened and discussed on 13.01.2023 by the CoC in which meeting one of the members of the CoC has informed that one applicant has expressed interest and want to become Resolution Applicant. Thereafter, the CoC extended the timeline for submission of the EoI and Resolution Plan in its meeting dated 07.02.2023. No fresh Form G was issued by the Resolution Professional, without issuing any fresh Form G. EoI and Resolution Plans was received from Pinax Paper Mills Private Limited and has been considered in the CIRP process. It is submitted that the name of Pinax Paper Mills Private Limited not being included in the list of PRA which was published on 14.11.2022. By virtue of Regulation 39(1B), the Committee could not have considered the Resolution Plan of the Pinax Paper Mills Private Limited. It is further submitted that by virtue of Regulation 36A (4-A), it was incumbent on the Resolution Professional to publish fresh Form G in event the timeline for submitting EoI being extended.....
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.... regarding extension of timeline as communicated on 13.02.2023. It is submitted that the Resolution Plan which was submitted by the Appellant was not a compliant plan. EoI which was initially submitted by the Appellant was from Appellant with Bhagwati Vintrade Private Limited whereas when the plan was submitted, the name of Nippon Ispat Pvt. Ltd. was added which Resolution Plan was non-compliant and taking advantage of extension of time giving opportunity to Resolution Applicants to file fresh plan. Appellant filed fresh Resolution Plan by deleting the name of Nippon Ispat Pvt. Ltd., hence, Appellant took benefit of extension of timeline and has never objected to the extension of timeline. Appellant took benefit of extension of timeline by submitting a revised plan and thereafter CoC asked the applicants to enhance its financial offer and submit Resolution Plans. It cannot now turnover and object to the process adopted by the Resolution Professional and the CoC. Applicants who have taken benefit of extension of timeline cannot be allowed to question. It is submitted that the Appellant took chance to get his plan approved and it has only after voting has commenced, he filed IA No.14....
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.... Interest issued by the Resolution Professional on 23.10.2022 with the approval of the CoC. It is relevant to notice certain clauses of Invitation for Expression of Interest. Clause 6 dealt with 'last date of submission of EoI' which is as follows:- "6. LAST DATE OF SUBMISSION OF EOI The last date for submission of EOI is 08th of November 2022 ("Last Date"). Provided that the Resolution Professional may extend the Last Date, with consent/approval/ratification of the COC (at its sole discretion). Further, the Resolution Professional may (with COC consent/ approval/ratification) has the right to accept or reject any EOI submitted after the Last Date." 9. Proviso to Clause 6 clearly contained provisions for extension of last date with consent/approval of the CoC. Further, Resolution Professional entitled to accept or reject any EoI submitted after the last date. 10. Clause 9 contained heading 'important notices'. Clause 9 (a) and (c) are as follows:- "9. IMPORTANT NOTICES a) CoC has the right to cancel or modify or withdraw the process of invitation of EOI (including the timelines) or resolution plans without assigning any reason and ....
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....ce of the CoC members in the 11th CoC meeting held on 30th January, 2023 and it is recorded in the minutes of the CoC that the same needs to be rectified by the Resolution Applicant in future. In the said CoC meeting, one of the CoC members informed that one interested party has approached showing willingness to become a Resolution Applicant. Discussions took place as to whether in the interest to maximize value, a fair chance should be given to all interested parties by issuance of a new Form G or the interested party can be allowed at this stage without issuance of Form G. One of the members of the CoC was of the view that interested parties can be allowed at this stage without fresh issuance of Invitation for Expression of Interest and/or Form G pursuant to some rulings by Court which the CoC member would share with the Resolution Professional after the meeting and further discussions would take place in the next CoC meeting. I crave leave to refer to minutes of 11th COC meeting held on 30th January, 2023 at the time of hearing, if necessary. I also crave leave to refer to the Resolution Plan submitted by the Applicant in consortium with Bhagwati Vintrade Private Limited and Nip....
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....he 12th CoC meeting, the time period for submission of EOI and Resolution Plan has been extended, the last date being 15.02.2023 and 27.02.2023 respectively. In this context all potential resolution applicants are instructed as under Existing PRAs need not submit EOl as they have already completed the process. They may submit a resolution plan, if they so desire, by the new stipulated date i.e. 27.02.2023. New PRAs can submit EOls along with required documents as mentioned in the annexures to this mail. Subsequently, we shall provide RFRP, Evaluation Matrix and Information Memorandum after issuing the final list of PRAS. Those who have already submitted their EOI may directly submit the Resolution Plan by the due date Please let me know in case you need any clarification. Sincerely, Avishek Gupta Resolution Professional Indian Pulp & Paper Private Limited (in CIRP)" 13. After issuance of e-mail dated 13.02.2023, list of PRA was published on 23.02.2023 by the Resolution Professional which is at page 381 of the paper book which is as follows : - "INDIAN PULP & PAPER PRIVATE LIMITED 23 February 2023 Is....
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....s submitted by the PRA's the following is the provisional list of eligible Prospective Resolution Applicants (PRA) for submission of Resolution Plan for the Corporate Debtor: 1. Brand Steel & Power Limited in consortium with Bhagwati Vintrade Private Limited 2. Green Valliey Industries Limited 3. RKG Fund-1 A scheme of RKG Trust 4. Pinax Paper Mills Pvt. Ltd. in consortium with Pinax Steel Industries Pvt. Ltd. In case the RP/ CoC subsequently becomes aware or is made aware of any disqualification/ineligibility of any PRA (including but not limited to under Section 29A of the IBC), then the RP/CoC shall have the right to disqualify such PRA from the resolution process at any stage. **Inclusion of the PRA in the final list is subject to satisfaction of the RP on compliance with Section 29A of the IBC. Thanking You, For and on behalf of Indian Pulp & Paper Private Limited (in CIRP) Avishek Gupta Resolution Professional Indian Pulp & Paper Private Limited" 15. After the e-mail dated 13.02.2023, the Appellant has filed its Resolution Plan which resolution plan was filed with Brand S....
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....d submitted fresh Resolution Plan making it compliant with its EoI by deleting the name of Nippon Ispat Pvt. Ltd. which was part of the earlier Resolution Plan. Subsequent Resolution Plan submitted by the Appellant was found to be compliant although an objection was raised by one of the Resolution Applicants regarding eligibility which was examined and ultimately CoC took decision to vote the plan of the Appellant also in its 20th CoC meeting held on 11.07.2023 which is pleaded in paragraph 3(ff):- "ff. In the 20th COC meeting held on 11th July, 2023 (continued on 14th July, 2023), upon a detailed deliberation on Resolution Plans and after considering the scoring on the Resolution Plan as determined on the basis of Evaluation Matrix, the COC decided that the Resolution Plans submitted by Pinax Paper Mills Private Limited in Consortium with Pinax Steel Industries Private Limited, Brand Steel & Power Limited in Consortium with Bhagwati Vintrade Private Limited and RKG Fund be put to vote, whereas the Resolution Plan submitted by Green Valliey Industries Limited shall be not be put for vote before the CoC as the plan had an element of conditionality." 17. The voting period....
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....Any modification in the request for resolution plan or the evaluation matrix issued under sub-regulation (1), shall be deemed to be a fresh issue and shall be subject to timeline under sub-regulation (3). [Provided that such modifications shall not be made more than once.] (6) The resolution professional may, with the approval of the committee, extend the timeline for submission of resolution plans. [(6A) If the resolution professional, does not receive a resolution plan in response to the request under this regulation, he may, with the approval of the committee, issue request for resolution plan for sale of one or more of assets of the corporate debtor." 21. As per sub-regulation (5), any modification in the request for resolution plan has to be treated as fresh issue whereas extension of timeline with the approval of the committee has been separately dealt. Thus, modification of request for resolution plan and extension of timeline has been separately dealt in Regulation 36B. Applying the aforesaid analogy in Regulation 36A, it is clear that although any modification in the Invitation for Expression of Interest require publication of fresh Form G but....
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....ellant placed much reliance on judgment of this Tribunal in "Ashdan Properties Pvt. Ltd." (supra). The above was the case where order passed by the Adjudicating Authority on 12.02.2024 and 21.02.2024 was challenged by which order the Adjudicating Authority on an application filed by two interveners directed the Resolution Professional to place their Resolution Plans before CoC for consideration which order was challenged by the Appellant whose case was that Appellant- Ashdan Properties Pvt. Ltd. has been selected as H-1 bidder after 33 rounds of bidding and name of two applicants were not included in the list of PRAs. The Appeal filed by the Appellant was allowed and this Tribunal after referring to Regulation 39 (1-B) laid down following in paragraphs 10 and 11:- "10. The Regulation thus clearly provides that the committee shall not consider a resolution plan received from an application whose name does not appear in the list of PRAs. Admittedly, neither Patanjali nor other two applications have submitted any EOI nor their name was reflected in the List of PRAS. 11. Regulation 36A which provide for Invitation for Expression of Interest also empowers the CoC to mo....
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....to be issued on 28-9-2018, which required the resolution plans to be submitted on or before 25-10-2018. The fourth Form 'G' came to be issued on 9-11-2018, which required the resolution plans to be submitted on or before 13-12-2018. The fifth and the last Form 'G' came to be issued on 11-12-2018, which required the resolution plans to be submitted on or before 8-1-2019. 7. KIAL, the appellant before NCLAT (Respondent 1 herein) and one Karvy Data Management Systems Ltd. submitted their resolution plans on the last date as stipulated in the last and fifth Form 'G' i.e. on 8-1-2019. One another applicant i.e. WeP Solutions Ltd. submitted its resolution plan jointly with one Sattva Real Estate Private Ltd. (hereinafter referred to as "WeP") on 13-1- 2019. The appellant in Civil Appeals Nos. 2943-44 of 2020 i.e. Kalpraj submitted its EOI and resolution plan to RP on 27-1-2019." 26. Kotak Investment Advisors Limited (KIAL) immediately raised the objection permitting Kalpraj to submit Resolution Plan on 29.01.2019. However, the plan of Kalpraj was placed before the CoC and was approved by the CoC on 13.02.2019 and 14.02.2019. Application was filed by the Resolution Professiona....
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....the proposals received by it prior to the date specified in last Form 'G' could not be accepted. However, it has been the consistent stand of RP as well as CoC, that all actions of RP, including acceptance of resolution plans of Kalpraj after the due date, albeit before the expiry of timeline specified by the I&B Code for completion of the process, have been consciously approved by CoC. It is to be noted, that the decision of CoC is taken by a thumping majority of 84.36%. The only creditor voted in favour of KIAL is Kotak Bank, which is a holding company of KIAL, having voting rights of 0.97%. We are of the considered view, that in view of the paramount importance given to the decision of CoC, which is to be taken on the basis of "commercial wisdom", NCLAT was not correct in law in interfering with the commercial decision taken by CoC by a thumping majority of 84.36%." 28. Counsel for the Appellant contended that the above judgment of the Hon'ble Supreme Court is not attracted in the facts of the present case since the judgment of the Hon'ble Supreme Court was delivered on 10.03.2021 and the Regulation 36A (4A) as well as Regulation 39 (1B) were inserted in the CIRP Regulations ....
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....CoC in 12th CoC meeting held on 09.02.2023 on the basis of which communication dated 13.02.2023 was issued to Resolution Professional. Thus, extension of timeline is in accordance with EoI itself. Original EoI was published on 23.10.2022. (ii) After extension of timeline by the CoC on 09.02.2023 and communication dated 13.02.2023, all Resolution Applicants including the Appellant were given liberty to file fresh Resolution Plans and Appellant filed fresh Resolution Plan by deleting Nippon Ispat Pvt. Ltd. as one of the members of the consortium who had submitted the Resolution Plan in pursuance of the earlier RFRP. We have noticed above that EoI was issued by Brand Steel & Power Limited in consortium with Bhagwati Vintrade Private Limited and Nippon Ispat Pvt. Ltd. was added in Resolution Plan was non-compliant which was also pointed out in the meeting of the CoC as well as by the Resolution Professional. After extending the timeline, the Appellant deleted Nippon Ispat Pvt. Ltd. as a Resolution Applicant and made the Resolution Plan compliant. Thus, the extension of timeline was availed by the Appellant to its benefit by filing a revised resolution plan making it compliant.....