TaxTMI 
TaxTMI 
2025 (6) TMI 1822
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.... under challenge has been that, the directions has been given to the Resolution Professional (RP) to conduct and complete the challenge mechanism process amongst the Resolution Applicants as contemplated under Regulation 39 (1A) (b) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 3. By virtue of the Impugned Order, the Ld. Adjudicating Authority has rejected the Application of the Resolution Professional to permit him to issue a fresh Form G to invite Expression of Interest (EoI) from new, interested and eligible prospective Resolution Applicants to submit their Resolution Plans, while continuing to retain the existing Resolution Applicants within the option given to them to participate in the challenge mechanism. It is the case of the Appellant that the rejection of his Application happens to de hors the basic principles of maximizing the value of assets of the Corporate Debtor. 4. The brief facts of the case is that, the CIRP process of the Corporate Debtor stood commenced with effect from 01.01.2021. The First Form G was issued on 24.08.2021, and as many as 9 Prospective Resolution Applicants had submitted their Expression of Interest. But,....
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.... of the same subject matter. 7. However, instead of proceeding with the ``challenge mechanism process'', as permitted by Ld. NCLT, the RP, based on the decision of CoC in its 43rd Meeting with 78.59% majority filed IA No. 388 / 2025, praying for limited reopening of the Bidding process of the Corporate Debtor and to enable submission of Expression of Interest from JSW Energy Limited, in order to achieve greater value maximization. This Application IA No. 388 / 2025 of the Resolution Professional was rejected by Ld. NCLT by the Order passed on 06.03.2025, observing thereof that the said proposal was found to be contrary to the principles of fairness and timelines of the CIRP process. 8. In the meantime, the JSW Energy Limited, itself had filed an Application seeking permission to participate in the CIRP process of the Corporate Debtor, and requesting for the issuance of a fresh Form G. These were dismissed by Ld. NCLT on 17.12.2024. 9. JSW Energy Ltd. filed two more applications IA Nos. 39 & 40 / 2025 seeking permission to participate in the ``challenge mechanism process'' of the Corporate Debtor. These Applications were also dismissed by the Order of 02.04.2025, on the gro....
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....nvestments Pvt. Ltd. & Ors., Jindal Stainless Limited V. Shailendra Ajmera & Ors. 15. He has further argued that, no valid reasons has been assigned by the Ld. Adjudicating Authority in the Impugned Order, while dismissing the application IA No. 608 / 2025, and no material procedural irregularity in the proposal to issue a fresh Form G, inviting EoI has been pointed out and despite the aforesaid fact, directing the CoC to proceed with the challenge mechanism process by interfering with the commercial wisdom of the CoC indicates complete non-application of mind. 16. If the controversy is taken up and considered in its entirety, the relief as it was sought for in IA (IBC) / 608 / 2025, prima facie appears to meet the objective of maximization of value which is the basic objective of the I & B Code, 2016, in relation to the Corporate Debtor. 17. Further, the directions issued in the Impugned Order amounts to creating restrictions on the rights and commercial wisdom of the CoC to issue Form G in compliance of the provisions of the I & B Code, 2016, as issuance of fresh Form G is well within the powers and the ambit of exercise of powers granted to the CoC under the provisions ....
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....ich means CoC can explore options after the challenge mechanism. Similarly, in Para 50, it observes that use of expressions ``allow modification in Resolution Plan, but, not more than once'' or ``use a challenge mechanism to enable the Resolution Applicants to improve their Plans'', in Regulation 39 (1A) (a) & (b) envisages modifications and improvements to Resolution Plans at the instance of the Resolution Applicant. Going forward, it observes in Para 51 of Judgment (supra) that Regulation 39 (1A), in itself cannot prohibit any negotiation or any further steps of the CoC undertaken towards value maximization of the Corporate Debtor. 21. Almost a similar view has been taken in yet another Judgment rendered by the Principal Bench in the matters of Mr. Ramneek Goyal V. Sunil Bajaj & 4 Ors. The Principal Bench while referring to the decision of the CoC, to re-publish Form G has observed that it is useful for the purposes of maximization of value of the Assets of the Corporate Debtor. The relevant paragraphs in the said context is extracted hereunder: "13. There can be no dispute to the law laid down by the Hon'ble Supreme Court that 330 days is the maximum period provided ....
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....onal (RP) Pankaj Joshi. Therefore, they have filed these Appeals assailing the order. Both the Appeals are disposed of by this common Judgment. 2. Brief facts of the case are that, on 10.10.2019 the Adjudicating Authority passed an order in CP (IB) 2156/MB/2019 filed by Canara Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), thereby initiated CIRP of the Corporate Debtor 'KGS Sugar and Infra Corporation Ltd'. Accordingly, by the admission order, moratorium in terms of Section 14 of the IBC was declared and one Mr. Balady S. Shetty was appointed as the Interim Resolution Professional (IRP). The CoC in its first meeting, appointed Mr. Balady S Shetty as Resolution Professional. Mr. Shetty published the invitation of expression on 18.01.2020, wherein the last date for submission of EOI was 10.02.2020 and for submission of Resolution Plan, it was 05.04.2020. 3. Pursuant to the EOI, the RP Mr. Shetty received EOIs from 14 Prospective Resolution Applicants, out of which only four including GIACL met the eligibility criteria. Subsequently, by email dated 12.03.2020, DSKL submitted its EOI to Mr. Shetty. On the same day, Mr. Shetty informed DSKL that EOI was....
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....RAs to participate even after submission of EoI. The relevant Paragraph is extracted below:- "11. Regulation 36A which provide for Invitation for Expression of Interest also empowers the CoC to modify the invitation for Expression of Interest. It is always open for the CoC to take a decision to not proceed on the Applications, EOI received and take a decision for issuance of fresh Form G and permit other applicants to participate. When no fresh Form G has been issued, it is not open for any new applicant to submit application before the Adjudicating Authority for being permitted to participate in the CIRP and submit Resolution Plan." 25. Further, we see no demerits in the Proposal of the RP as contained in the Application IA No. 608 / 2025 and in the decision of CoC to invite fresh EoI by issuing fresh Form G for the reason being that, inviting new PRAs to submit EoIs will certainly increase competition and in all likelihood, result in higher Bids, that since, the EoI is proposed to be reopened for everybody and not for JSW alone, it is fair and transparent and not discriminatory and that since, existing PRAs are proposed to be retained with option given to them to part....