TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 636
X X X X Extracts X X X X
X X X X Extracts X X X X
....Mr. Shailendra, Advocates for R7. Mr. Brijesh Kr. Tamber, Mr. Prateek Kushwaha, Arani Mukherjee, Ms. Chanchala Tiwari, Mr. Vinay Singh Bist, Advocates for UCO Bank. Mr. Abhishek Anand, Mr. Karan Kohli, Advocates for RP-R1. Mr. Arun Kathpaliya Sr. Advocate with Mr. Sumesh Dhawan, Mr. Ankit Singal, Mr. Shaurya Shayam, Advocates for R4 - Prudent ARC. JUDGMENT (Hybrid Mode) [Per: Arun Baroka, Member (Technical)] Company Appeal (AT) (Insolvency) No. 859 of 2025 has been filed by M/s Myotic Trading Private Limited ('Myotic') which challenges the order /judgment dated 29.05.2025 dismissing the I.A. No.1240/2025 in C.P.(IB) No. 3/ND/2020 and Company Appeal (AT) (Insolvency) No. 877 of 2025 challenges order/judgment dated 28.05.2025 in I.A. No. 2548/ND/2025 in CP(IB) No. CP(IB)3/ND/2020. Since factual matrix in the two appeals are interrelated, they are being taken up together. We are taking CA(AT) (Ins.) No. 859 of 2025 as lead matter. A brief chronology of events extracted from CA(AT) (Ins.) No. 859 & 877 of 2025 are noted as follows: 04.05.2022 Corporate Insolvency Resolution Process ("CIRP") of Amzen Transportation Industries Limited ("CD") commenced. 20.04.2024 Form G was pu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No. 5392 of 2024 was listed before the Adjudication Authority, wherein, the issue raised regarding the eligibility was remanded back to CoC, directing the Respondent No. 1 as well as CoC to provide Cosmic CRF a fair opportunity on the issue in hand. The Order dated 09.01.2025 was never assailed by the Appellant herein before this Appellate Tribunal under Section 61 of the Code. 27.01.2025 Respondent No. 1 sent an email to the Appellant seeking necessary clarifications explaining the source from which they received ineligibility of Cosmic CRF. 04.02.2025 Appellant vide email relied on the aforementioned email issued by the Respondent No. 1, explaining its stance. 06.03.2025 During the 55th CoC meeting convened on the said date, the Respondent No. 1 informed the CoC member that the final report under Section 29A of the Code qua Cosmic CRF has been received from M/s Priyanka Sharma & Associates (hereinafter, referred to as 'PSA') on 18.02.2025 and it was informed that a Legal opinion on the basis of the said Reply has been taken from Senior Advocate. During the discussion on the said report, it was inferred that as per the report the Cosmic CRF was ineligible to submit the Resol....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to such sale, charge was created in favour of Kotak Mahindra Bank Ltd to the tune of Rs 22 crores. The aforesaid transaction thereby demonstrates the backdoor entry of the erstwhile Promoter of Cosmic Ferro Alloys Ltd through its newly formed entity Cosmic CRF Ltd with control in the related and connected parties of the erstwhile company passing through insolvency process. 5. CIRP against the corporate debtor in the present case i.e. Amzen Transport Industries Pvt Ltd, commenced on 04.05.2022. The CIRP period has been extended and excluded by several orders passed by NCLT. 6. On around 27.02.2024 Hon'ble Supreme Court passed the judgment directing Directorate of Enforcement (ED), Govt of India has attached the assets and properties of the Corporate Debtor as the same were under its investigation. The said order states the following: - "1. The petitioner who is a practicing advocate has invoked the jurisdiction of this Court under Article 32 of the Constitution of India raising an important issue regarding failure of the concerned agencies to address the humongous fraud allegedly committed by M/s. Amtek Auto Limited (hereinafter being referred to as 'AAL') and its associate co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....int from an NGO named as Energy Watchdog on 27th of August, 2024 along with a note showing the ineligibility of Cosmic CRF Ltd (one of the Resolution Applicants) in the Resolution process of the Corporate Debtor. The Appellant herein immediately forwarded vide email the said letter to the Resolution Professional i.e. Respondent No.1 herein for his kind perusal and to intervene in the matter immediately and make proper inquiry about the same. On the very next date, i.e. 28.08.2024 the Appellant contacted one senior counsel with the documents received from the said NGO and sought his legal opinion regarding the eligibility of the said Resolution Applicant namely; Cosmic CRF Ltd. An opinion was received from the said senior counsel wherein it was categorically stated that if the documents and the information provided in the said complaint are correct, then the said Resolution Applicant namely; Cosmic CRF Ltd will be barred to become the Resolution Applicant of the Corporate Debtor, which, in other words, means that the said Resolution Applicant will be barred from participating in the ongoing Resolution Process. It was also stated in the said opinion that till the verification is done....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e settled at Rs. 50 Crores. o On 21.12.2021, Shri Pawan Kumar Tibrewala, Father-in- Law of Aditya Kumar Birla incorporated Cosmic CRF Ltd. Shri Aditya. Vikram Birla was appointed as the Managing Director of the said Company. o On 19.1.2022, pursuant to a Business Transfer Agreement entered into between CFAL and Cosmic CRF Ltd, the latter acquired the Cold Rolled Forming Unit on slump-sale basis. o The Consultant has in terms demonstrated the relationship of promoters and directors of the Cosmic CRF Ltd with the promoters and directors of CFAL. o The consultant analyzed Section 29A r/w. Sec.5(24) and 5(24A) and gave an opinion that Cosmic CRF Ltd is ineligible u/s. 29A of IBC, 2016. 14. In the 49th CoC meeting on 25.09.2024, the report of AHSK & Co was placed before the CoC for its opinion. After considering the report, the CoC required the RP to call for the response from Cosmic CRF Ltd. On 27.09.2024 the RP issued a notice to Cosmic CRF Ltd calling upon it to submit its response to the issue of ineligibility. Along with the notice, the RP also attached a copy of the final report received from AHSK & Co. for the perusal of the Cosmic CRF Ltd and on 30.09.2024 Cosmic CRF Lt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to Section 31(4) of IBC, 2016 and Hon'ble Supreme Court's judgment, dated 29.01.2025, in Independent Sugar Corporation Ltd. V Girish Sriram Juneja & Ors., in Civil Appeal No. 6071 / 2023, and accordingly requested the Appellant herein to submit its resolution plan subject to the said compliance check. 19. After NCLT's order, dated 09.01.2025, RP / CoC on 03.03.2025 called for response of Cosmic CRF and asked M/s Priyanka Sharma & Associates (PSA) to give its final report / opinion based on all the previous reports and Cosmic CRF's response dated 20.01.2025, and it was decided to send the final report of PSA to a senior advocate for his opinion. The Final report, dated 18.02.2025, of PSA again declared Cosmic CRF to be ineligible under Section 29A of IBC, but the Ld. Senior counsel in his opinion, dated 03.03.2025, declared it to be eligible under the said section. 20. Pertinently, as it is evident from the minutes of the CoC's 55th meeting, dated 06.03.2025 [as annexed in UCO Bank's reply dated 25.03.2025], the CoC didn't apply its mind as to why the legal opinion of the Ld. Senior counsel (holding Cosmic CRF to be eligible) has to be preferred rather than M/s Priyanka Sharma &....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Myotic & Fortune, and Fortune's irrevocable power of attorney, the Consortium still subsists today as the same is irrevocable. o Any dispute between Myotic and Fortune is their internal dispute, and should not concern the RP/ CoC o Eligibility of Myotic is nowhere challenged by any party before the NCLT. The only challenge is to the eligibility of Cosmic CRF. o If the lead member (viz. Myotic) is saying that the consortium is valid so it should be treated as valid by the CoC as it is not a competent court to decide upon the validity of the Consortium. 25. It came to notice that on 25.03.2025, the Enforcement Directorate issued Provisional Attachment Order (PAO), which makes shocking revelations that go to the root of the present CIRP that has got riddled with illegalities. 26. The Appellant herein filed an appeal [C.A. (AT) (Ins) No. 598 / 2025] against the interim order dated 26.03.2025, passed by the National Company Law Tribunal as vide the interim order dated 26.03.2025, the NCLT, Delhi had removed to extend the aforesaid interim stay. On 17.04.2025, this Appellate Tribunal was pleased to dispose of the Appellant's appeal [C.A. (AT) (Ins) No. 598 / 2025] by directing th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IBC, led to due diligence by the CoC and as a result the rival PRA - Cosmic CRF - R-3 was disqualified. 32. Appellant had moved IA No. 1240 of 2025 on 10.03.2025 challenging the decision of the CoC taken in its 55th meeting on 06.03.2025 to declare Cosmic CRF (Respondent No. 3) as an eligible PRA. This decision had overturned CoC's own earlier decision taken in its meeting on 19.10.2024. it is claimed that after Appellant's complaint and based on multiple detailed expert reports and legal opinions obtained thereafter, including by their own due diligence agencies, CoC had declared Respondent No. 3 as ineligible and had forfeited its EMD for false declaration, and had declared the Appellant's consortium as the 'winner'. While judgment in above IA was reserved, the Appellant basis information relating to Provisional Attachment Order of the ED dated 25.03.2025 that made startling revelations, filed Application No. 2548 of 2025 on 22.05.2025. This IA highlighted that the CIRP of the Corporate Debtor has been hijacked by the promoters of the CD who did massive frauds and against whom Hon'ble Supreme Court had ordered ED investigation, in addition to already pend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iction to the Adjudicating Authority (being the sole authority to oversee the entire CIRP) to entertain "any application" concerning the CIRP. o The order is unreasoned, sans any consideration of the facts and without any adjudication, at the first listing of the application. o The NCLT ignored the consortium provisions of RFRP and the consortium agreement between consortium members and irrevocable PoA signed by consortium partner, as well as the CoC decision dated 22.03.2025 in its 57th meeting. 36. Furthermore, the impugned order dated 29.05.2025 dismissing IA 1240 of 2025 is erroneous for six main reasons: - o Appellant was placing on record detailed, cogent and extensive averments and documents demonstrating the ineligibility of the R-3/ Cosmic CRF. o The illegalities highlighted by Appellant and relief sought was required to be adjudicated, as no resolution plan by an ineligible PRA can be accepted firstly by the CoC and secondly by the adjudicating authority. o Section 60 gives vast jurisdiction to the Adjudicating Authority (being the sole authority to oversee the entire CIRP) to entertain "any application" concerning the CIRP. o The order of dismissal is solely....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Appellant herein, even after all assets of corporate debtor had been attached by the ED pursuant to an investigation directed by the Hon'ble Supreme Court. Submissions of Deepak Maini the Resolution Professional - R-1 41. It is contended that impugned orders dated 28.05.2025 and 29.05.2025 suffers from no legal infirmity and Adjudicating Authority has correctly held that held that the Appellant lack locus standi to maintain I.A. No. 1240 of 2025 & I.A. No. 2548 of 2025. The FORM-G, issued on 20.04.2024 by the RP, clearly stipulates the timeline of the process which has not been changed/modified/altered in any manner and the last date of submission of objections to the provisional list of Prospective Resolution Applicants lapsed on 15.05.2024. The Appellant failed to adhere to the timelines as stipulated in the FORM-G and in the Code and Regulations framed thereunder, wherein, they have filed the Application bearing I.A No. 1240 of 2025 on 10.03.2025, indirectly challenging the provisional list of Prospective Resolution Applicants with a significant delay of more than 10 months from the last date of challenge i.e., 15.05.2024. It is to be noted per Regulation 36A (11) of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecision in the matter of Sharavan Kumar Vishnoi v. Upma Jaiswal & Ors, [Company Appeal (AT)(Ins) No. No. 371 of 2022] which had relied upon the decision of the Hon'ble Supreme Court in Arcelormittal (supra). 47. It is claimed that the Respondent No. 1 even appointed M/s AHSK & Co for conducting the due diligence under Section 29A of the Code of all of the Prospective Resolution Applicants in the CIRP of the Corporate Debtor, which subsequently was placed before the CoC for their perusal and further approval reserving the right of final decision with the members of the CoC. Therefore, the conduct of the Respondent No. 1 is not at all contrary to the role of a facilitator as envisaged under the Code and the Regulations framed thereunder. 48. It is also contended that in compliance with the order dated 09.01.2025 passed by the Adjudicating Authority in I.A. No. 5392 of 2024, wherein, it was directed to the Respondent No. 1 and the CoC to reconsider the eligibility of Respondent No. 3. CoC in its commercial wisdom basis the Legal Opinion received from the Senior Advocate decided that the Cosmic CRF is eligible to submit the Resolution Plan and hence, the challenge mechanism process w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, any adjudication or observation by this Appellate Tribunal regarding the same would amount to overstepping of jurisdiction and would traverse beyond the scope. It is further denied that independent and separate proceedings have already been instituted and are pending before the competent authorities under the PMLA with respect to the subject matter arising out of the provisional attachment order issued by the Enforcement Directorate. That the Respondent No. 1 has duly filed its objection to the Original Complaint 193 of 2025 which is listed for hearing on 20.08.2025 before the Adjudicating Authority under PMLA. 51. It is also contended that the Appellant has not approached this Appellate Tribunal with clean hands as the affidavit filed by Fortune with respect to non-participation in the CIRP of the Corporate Debtor despite being part of I.A. No. 1240 of 2025 before the Adjudicating Authority has not been placed intentionally on record by the Appellant in order to hoodwink this Appellate Tribunal in obtaining favorable interim order. 52. Thus, in view of the submissions made there stands no legal infirmity in the Impugned orders dated 28.05.2025 and 29.05.2025 passed by the Adj....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rporate Debtor is final and irrevocable. It is a settled principle of law that when there are two partners in the JV and one of them goes out then it cannot be said that JV is a continuing entity especially when it draws it sustenance under a mutual agreement between two partners. It also places reliance on GVPREL-MEE (J.V.), Hyderabad v. Government of A.P. & Anr., (2005) SCC Online AP 531. 56. Myotic individually does not fulfil the eligibility criteria to be a Prospective Resolution Applicant (PRA). The Invitation of Expression of Interest as issued by the RP puts forth the eligibility criteria for resolution application. As per the Invitation of Expression of Interest, in case the resolution applicant is a consortium then all the members of the consortium should together meet the eligibility criteria of minimum tangible net worth of Rs. 100 crores and individual members of the consortium should have minimum net worth of Rs. 10 crores each. As per the documents issued to CoC by Myotic, the total net worth of Myotic is Rs. 43.21 crores approx. As per the documents issued to CoC by Fortune, the total net worth of Fortune is Rs. 140.69 crores. Thus, on account of withdrawal of Fort....
X X X X Extracts X X X X
X X X X Extracts X X X X
....P and how the entire process of CIRP is vitiated. R-3 - Fortune claims that the Appellant is trying to mislead this Hon'ble Tribunal as such allegations were never subject matter of I.A. 1240 of 2025. All the arguments made are beyond the pleadings and beyond what was argued before NCLT. Further, these documents did not form part of the record of NCLT and without seeking leave of this Tribunal no new additional fact or document can be pleaded. Submissions of Prudent ARC-R4 61. Prudent ARC Limited Prudent Trust 83/23 i.e., the Respondent No. 4, is holding 41.12% voting share in the Committee of Creditors of Amzen Transportation Private Limited i.e., the Corporate Debtor. 62. It is contended by Prudent ARC that Myotic Fortune Consortium is a joint venture that ceased to exist, Myotic has played a fraud upon the system not only by suppressing and concealing that its consortium partner has withdrawn but also by filing a false and fabricated affidavit of its Consortium Parter. The fact that a fraudulent document was filed before the Tribunal has not been denied by document and it has given no satisfactory explanation for the same. Further the Myotic Fortune Consortium is a joint vent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpliances are required to be done at the threshold to make any party as an eligible PRA. The said process of checking the eligibility of PRA cannot be done at any stage at the whims and fancies of a particular PRA as that would tantamount to giving priority to certain individuals midway which is neither permissible under the provisions of the Code, nor under the Regulations framed thereunder and would also be contrary to principles of natural justice as such a step would denude other people to participate in the process. 65. Prudent ARC also points out that Myotic has itself agreed to replace the Consortium Partner with a third-party. Pertinently, vide email dated 21.04.2025 (incorrectly stated as 26.04.2025 in Appeal), Myotic provided consent letters dated 21.04.2025 [Annex A51@Vol. 4, Pg. 898] from United Air express and United Infracore Ltd. to join the consortium. Thus, even as per Myotic itself. Myotic Fortune Consortium does not exist on account of withdrawal by Fortune. Myotic by its own admission in the captioned Appeal [Ref. Para 102 @ Vol. 1, Pg. 1111 has stated that United Air Express and United Infracore Ltd. have agreed to the join the consortium to acquire the Corpor....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Adjudicating Authority. The Appellant tried to play a fraud upon the Adjudicating Authority and unsuccessfully tried to do the same act before this Hon'ble Authority. Prudent ARC submits that IA 1240/2024 was based on certain grounds which were existing at that relevant point of time on basis of which the impugned Order dated 29.05.2025 was passed. The impugned Order cannot be tested on the basis of subsequent facts or events even though according to the Respondent, the subsequent passing of the Provisional Attachment Order also has no bearing on the reasoning of the impugned Order dated 29.05.2025. Prudent ARC contends that the sole reason that the Respondent is highlighting this issue is to show the fraudulent conduct of the Appellant in not informing the Court that it wishes place reliance on subsequent facts and events. Thus, the said additional documents cannot be considered by this Appellate Tribunal. IA 1240/2025 (in which the impugned Order is passed) was only filed by Myotic without joining the consortium partner as an Applicant as such Application was not maintainable on this ground also. 68. The fraud being played by Myotic is apparent from the fact that on earlie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3.2025 and written submissions on 09.04.2025. 77. The CoC in its 59th meeting held on 05.04.2025, rejected the proposal to consider Myotic Fortune Consortium as eligible resolution applicant. The same was communicated to Myotic vide email dated 24.04.2025. 78. It is a settled principle of law that when there are two partners in the JV and when one of them goes out, then it cannot be said that JV is a continuing entity especially when it draws it sustenance under a mutual agreement between two partners. Reliance is placed on GVPREL-MEE (J.V.), Hyderabad v. Government of A.P. & Anr., (2005) SCC Online AP 531, para 30-36. Submissions of Fortune Global Solutions Pte Ltd -R7 79. Fortune along with Myotic had submitted their Expression of Interest in relation to the CIRP of Amzen Transportation Industries Pvt. Ltd. as a Consortium. Myotic was nominated as the Lead Member and all necessary documents as per the Request for Resolution Plan (RFRP) were executed by in their favour. However, during the CIRP, it had come to the knowledge of Respondent No.7 that Respondent No.7 had not been kept in loop regarding communications between Team Myotic and the Respondent No.1. Further there was l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Respondent No.7 received an email dated 18th March, 2025 from the Respondent No.1 wherein Respondent No.1 had stated that Myotic had submitted an affidavit dated 11th March, 2025 allegedly signed by Mr. Vineet Govardhan Shah affirming that he is authorised signatory of Fortune and the contents of the affidavit were in contradiction to the stand taken by Respondent No.7 by email dated 18th March, 2025. Thus, the Respondent No.1 sought clarification in respect of the affidavit dated 11th March, 2025. Alongwith the email the affidavit of 11th March, 2025 was also attached. It was mentioned in the purported unnotarized affidavit dated 11th March, 2025 that Respondent No. 7 had withdrawn our emails/letters dated 6th March, 2025 and 7th March, 2025. The said purported affidavit 11th March, 2025 was discovered by Respondent No.7 for the first time when the Respondent No.1 had sent it to Respondent No.7 by email dated 18th March, 2025. Respondent No.7 had never sent the affidavit to Myotic nor the purported affidavit dated 11th March, 2025 was signed by Mr. Vineet Govardhan Shah. Further, no stamp paper which is attached alongwith the affidavit was ever purchased by Mr. Vineet Govardhan Sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by Mr. Vineet Shah [Director of Fortune]. Through such affidavit it was intended to portray that Fortune had withdrawn the correspondences issued on 06.03.2025 at 3:22 pm, 06.03.2025 at 7:15 pm and 07.03.2025. The RP issued an email dated 18.03.2025 to Fortune requesting clarification. Fortune through Mr. Vineet Shah by email dated 19.03.2025 clarified that Mr. Vineet Shah has not signed the affidavit so no question of its notarisation arises, the purported affidavit is not notarized, Mr. Vineet Shah was not in Gurgaon on the relevant date nor have they purchased the stamp paper at Gurgaon, Myotic is presenting false and wrong documents to the RP and CoC and Fortune holds no association, liability of responsibility for any actions, commitments or representations made by Myotic and that their withdrawal from CIRP of the Corporate Debtor is final and irrevocable. 82. In light of the aforesaid it is submitted that Fortune has revoked the Power of Attorney and all other authorisations which had been granted to Myotic in relation to the CIRP of the Corporate Debtor. Fortune has withdrawn from the consortium and the bidding process and will no longer participate any further in the CIR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39;s eligibility. Based on this, the CoC, in its 55th meeting dated 06.03.2025, unanimously declared Cosmic CRF eligible under Section 29A and resolved to resume the challenge mechanism. At this stage we note that all earlier legal opinions on record found Cosmic - R3 to be in eligible. 88. The Adjudicating Authority in IA 1240/2025 in CP No. 3/ND/2020 has categorically dismissed the Application filed by Myotic on the sole ground of lack of locus of Myotic to maintain the IA 1240/2025 by virtue of withdrawal of its consortium Partner i.e., Fortune Global Solutions Pte. Ltd. The Adjudicating Authority by the Impugned Order has adjudicated on the locus standi of Myotic to maintain IA 1240/2025. The relevant extract of the Impugned Order is as under: "13. The primary issue before this Authority is whether the Applicant, Myotic, has the locus standi to maintain the present application after its consortium partner, Fortune Global Solutions Pte. Ltd., withdrew from the consortium. 14. While the Applicant argues that internal disputes or unilateral communications by Fortune Global Solutions Pte. Ltd. are governed by the binding Consortium Agreement and Power of Attorney, and do not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble as a PRA and it is claimed that inter-se dispute between Fortune and Myotic was not relevant as it was an inter-se dispute between the two consortium partners and both of them were obligated to fulfil the obligations under the Resolution Plan and even otherwise, Myotic vide its Email dated 21.04.2025 to the RP, Myotic itself had agreed to substitute the consortium member with other two members. Myotic also relied upon subsequent Provisional Attachment Order date 24.03.2025 under PMLA to raise allegation of impropriety in the CIR Process. It is claimed by the appellant that the Appellant is the lead member of a consortium, having submitted its Expression of Interest (EOI) along with Fortune Global Solutions PTE Ltd. as a Prospective Resolution Applicant (PRA). Appellant, being the sole point of contact as per RFRP, had done all communications, negotiations, paid EMD and submitted the resolution plan. After the plan was submitted, the Appellant's complaint against Cosmic CRF-R3 for ineligibility under Section 29A of the IBC was accepted, and it is a matter of record that the CoC had declared Cosmic CRF - R3 as ineligible and the Appellant's consortium as the "winner" of the proce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot a valid PRA individually, and its application to challenge the eligibility of another PRA (Cosmic CRF) is not maintainable in law. 93. Respondent No 4 - Prudent ARC Ltd., acting through Prudent Trust 83/23, is a financial creditor holding a 41.12% voting share in the Committee of Creditors (CoC) of Amzen Transportation Private Limited ("Corporate Debtor") and they also have contended on the similar lines that the Myotic-Fortune consortium, formed via agreement dated 09.05.2024, ceased to exist after Fortune's categorical withdrawal on 07.03.2025. Fortune by letter dated 07.03.2025, withdrew from the Myotic Fortune Consortium. Thus, the Myotic Fortune Consortium ceased to exist w.e.f. 07.03.2025. Thereafter, Myotic no longer had standing to continue in the CIRP process, let alone file IA 1240 of 2025 in its individual capacity. Further Myotic in its individual capacity, does not qualify as its individual tangible net worth of approx. INR 43 crores is less than the required net worth of INR 100 crores. Myotic cannot claim to be a standalone PRA, nor does the RFRP permit a unilateral continuation or substitution without CoC approval. 94. UCO Bank is a member of the Committee of C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cement of the consortium partner. Without any provision in RFRP, the appellant cannot claim to replace the earlier partner with a new partner. On the basis of facts noted by us herein above, we may safely conclude that the Adjudicating Authority has not committed any error in dismissing the appeal as it was dismissed solely on the ground of locus, i.e., that the Appellant alone could not have challenged its ineligibility as the consortium no longer subsisted and its net worth alone was below Rs. 100 crores, which was the eligibility criteria in the RFRP. 97. Appellant has also raised some other grounds on the issue of maintainability. It claims that the NCLT ignored the consortium provisions of RFRP and the consortium agreement between consortium members and irrevocable Power of attorney (PoA) signed by consortium partner, as well as the CoC decision dated 22.03.2025 in its 57th meeting. It is pertinent to note that pursuant to the hearing dated 17.03.2025, the meeting of CoC was called and in 57th meeting of CoC dated 22.03.2025 it was discussed as under: "E8. The Legal Retainer Counsel of the RP stated that the eligibility of Myotic Trading is not sub judice before the Hon'ble....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 45. Further, a mere use of the word 'irrevocable' in a POA does not make the POA irrevocable. If the POA is not coupled with interest, no extraneous expression can make it irrevocable. At the same time, even if there is no expression to the effect that the POA is irrevocable but the reading of the document indicates that it is a POA coupled with interest, it would be irrevocable. The principles of construction of a POA termed as 'irrevocable' was explained in Manubhai Prabhudas Patel v. Jayantilal Vadilal Shah, reported in 2011 SCC OnLine Guj 7028. The relevant observations are reproduced below:- "12. I am of the view that while construing a document, it is necessary to determine the real intention of the parties. The mere form in which document is couched is immaterial. The intention of the parties has to be gathered from the terms of the documents themselves and from such of the surrounding circumstances, as later required to show in what manner the language of the document is related to the existing fact. It is very difficult task to know the intention of the parties on the basis of the recital of the document. But, the Court can rely safely on the language ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lar acts, (3) the general words do not confer general powers but are limited to the purpose for which the authority is given and are construed as enlarging the special powers only when necessary for that purpose; (4) a power of attorney is construed so as to include all medium powers necessary for its effective execution. Bearing these general principles in mind the question for consideration is whether the power of attorney in this case authorised the first defendant to enter into an agreement to sell or authorised him to execute a sale-deed. " (Emphasis supplied) 99. Relying on above judgment we are inclined to agree with the Respondent that Appellant cannot take a ground that power of attorney was irrevocable. Further there is no provision for a replacement of consortium partner as per RFRP. Moreover, the last date for shortlisting of the PRAs was long over and only the consortium's name appears in the short list and not that of Myotic. In the absence of any clause allowing for replacement of consortium partner, it becomes difficult for us to concur with the submissions of Learned Counsel for Appellant in order to allow the appeal of the consortium partner. We therefore, rejec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dated 05-05-2005, the petitioner JV represented by Mr. G.S.S. Reddy admits that without the participation of MEE as the partner either petitioner JV or GVPREL would not have been qualified to offer for pre-qualification. In that view of the matter, the decision of the respondent cannot be held illegal." [Emphasis supplied" 101. Appellant has sought help from the judgment of the Hon'ble Supreme Court in Ebix Singapore (P) Ltd. Vs Educomp Solutions Ltd. reported in (2022) 2 SCC 401, where it was held that a Resolution Applicant is bound by its commitments made under the Resolution Plan. Though the said judgment was in the context of a Successful Resolution Applicant (SRA), at the stage of acceptance of its Resolution Plan, however, it claims that by analogy the same principle can be said to be applicable to a Prospective Resolution Applicant (PRA) which has submitted its bid in accordance with the provisions of RFRP issued by the CoC/RP during the course of a CIRP under the IBC. In our considered view, this judgement may not be of any assistance to Appellant as it relates to successful resolution applicant. 102. The appellant has also relied upon judgment of Hon'ble Supreme Court ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Court in above judgment the appellant has a locus to question the eligibility of the other PRA or otherwise. We note in appeal number 859 of 2025, the appeal challenges dismissal of the IA, which was dismissed on the grounds of its maintainability alone. We find that the adjudicating authority did not commit any error in concluding that the appellant did not have any locus to file the IA as a consortium, as its partner had exited from the consortium. Therefore, we are inclined to dismiss CA(AT) (No. 859 of 2025 to this extent. 104. On the other hand, in Company Appeal (AT) (Insolvency) No. 877 of 2025 Appellant had challenged IA 2548/2025, which was an IA seeking replacement of RP and reconstitution of CoC, which was dismissed by NCLT on the ground of lack of locus - without hearing on merits. We find that the issue of eligibility of the other PRA namely Cosmic was very much discussed in various meetings of COC. 105. We find that COC had taken legal opinion from various law firms and found Cosmic to be ineligible on various grounds. The reports on the issue of eligibility of Cosmic CRF Limited - Respondent No.3, were discussed in detail in various meetings of the CoC and the re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the reports of eligibility under Section 29A of the Code pertaining to Cosmic CRF Ltd. and a detailed letter was also issued by RP on 04.11.2024. But in the 55th CoC meetings, the report of PSA alongwith opinion of a Senior Advocate has been given precedence to hold it eligible. Relevant minutes of the meeting of the CoC are as follows: E5(1). Deliberations on eligibility of RA Cosmic CRF Limited: RP initiated the discussion by presenting on the screen both (1) Report dated 18th February, 2025 of Priyanka Sharma & Associates (PSA) and (ii) Opinion dated 03.03.2025 of Mr. Krishnendu Datta (Senior Advocate). The RP explained in detail the contents, observations and findings of both these professionals to the CoC. He added that the report of PSA has given finding that RA Cosmic CRF Limited is ineligible under sub-sections (a), (c), (h), (j) of Section 29A of IBC, 2016. However, after thorough examination of the report dated 18.02.2025 of PSA, Mr. Krishnendu Datta (Senior Advocate) was of the opinion that RA Cosmic CRF Limited is eligible under sub-sections (a), (c), (h), (1) of Section 29A of IBC, 2016. The opinion of Mr. Datta is supported by justification under each head, At th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....have been taken by CoC. 109. Resolution professional, while defending his role, contends that it can only facilitate and it is ultimately the COC who has to take a final decision. Resolution Professional places reliance on Arcelormittal India Private Limited v. Satish Kumar Gupta, [(2019) 2 SCC 1], wherein, the Hon'ble Supreme Court held that the role of the Resolution Professional is merely to facilitate and the final decision regarding the Resolution Plan is left within the domain of the members of the CoC. Relevant extract of the judgment is reproduced hereinbelow: - ".... 80. However, it must not be forgotten that a Resolution Professional is only to "examine" and "confirm" that each resolution plan conforms to what is provided by Section 30(2). Under Section 25(2)(i), the Resolution Professional shall undertake to present all resolution plans at the meetings of the Committee of Creditors. This is followed by Section 30(3), which states that the Resolution Professional shall present to the Committee of Creditors, for its approval, such resolution plans which confirm the conditions referred to in sub-section (2). This provision has to be read in conjunction with Section 25(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n or otherwise of the various provisions of law. The aforesaid direction clearly indicates that the Resolution Professional is free to submit his opinion with regard to contravention or otherwise of the various provisions of law. The aforesaid observations take care of the duties and responsibilities of the Resolution Professional. The Resolution Professional can give his opinion with regard to each Resolution Applicants and further steps are to be taken for the CoC as per the direction issued by the Adjudicating Authority. 8. At this stage, we are of the view that, various issues regarding ineligibility or eligibility need not be gone into in this Appeal. It is only after the CoC's decision if any question arise regarding eligibility that can be gone into before the Adjudicating Authority in accordance with the law. [Emphasis supplied] 111. The above two judgments may not be of any assistance to the resolution professional as in the facts and circumstances referred herein earlier, we find that RP/CoC has not complied with the provisions of section 29A and thus an erroneous conclusion has been arrived at, that Cosmic CRF Limited meets requirements under Section 29A and is eligi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dered. In that case, apart from other issues Hon'ble Supreme Court on 27.02.2024 had ordered that: ".... 14. In this view of the matter, we hereby direct that an exhaustive investigation of the issues raised by the petitioner in this writ petition pertaining to huge banking fraud which may run into Rs. 27,000 crores of public money shall be conducted by the ED. We request the learned ASG to issue necessary directions to the ED for compliance of this order. 15. However, the investigation/enquiry being carried out by the SFIO and the CBI shall continue and will not be prejudiced by this order. Both the agencies shall fully cooperate with and complement the ED in the process of collection of evidence. Copies of the enquiry reports submitted on behalf of the SFIO and the CBI shall be provided to learned Amicus Curiae as well as learned counsel for the petitioner." 115. It is submitted that on the basis of the collection of material by the Enforcement Directorate (ED) during the course of investigation the provisional attachment order dated 25.03.2025 was passed wherein the findings noted herein before were recorded. The allegations which have been highlighted by the ED appears t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the reasons given in the provisional attachment order. We are of the considered view that sufficient material exists on record which makes Cosmic CRF as not eligible under Section 29A of the Code. 117. Therefore, on the basis of existing record and reasons given herein before we find that the instant PRA viz Cosmic CRF (Respondent No. 3) also does not meet the requirement of Section 29A. We also note that the Adjudicating Authority has passed impugned order in Comp. App. (AT) (Ins) No. 877 of 2025 only in few lines without giving any reasons and without considering the submissions of applicant in detail. The impugned order therein appears to be a non-speaking order without deliberating on serious issues which have been raised therein with regard to the RP and CIRP proceedings. Conclusions and Orders 118. We thus conclude that though appellant in CA (AT) (Ins) No. 859 of 2025 i.e. Myotic Trading Pvt. Ltd. has been correctly not found eligible as PRA as other partner of Consortium Fortune Global Solutions Pvt. Ltd. had withdrawn himself from the Consortium and the net worth of Myotic thus had fallen below the threshold limit provided in RFRP of Rs. one hundred crore and that eve....