TaxTMI 
TaxTMI 
2025 (8) TMI 636
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....i, Sr. Advocate with Mr. Akash Tandon, 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 Indust....
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....Plan under section 29A of the Code as decided in the CoC meeting convened on 19.10.2024. 09.01.2025 I.A. 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 ....
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....s sold by Cosmic CRF Limited ongoing concern on slump sale basis pursuant to which the said unit formed the sole asset of Cosmic CRF Ltd. Subsequent 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 ....
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....enge Mechanism to enable resolution applicants to improve their plans in terms of Clause 4.2.1 of the Request for Resolution Plan (RFRP). 10. In the meantime, the Appellant on around 27.08.2024 received a copy of complaint 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 Co....
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....t provided that Shri Aditya Vikram Birla, Shri Abhishek Birla and Shri Yash Birla will be working as Marketing Executive and Technical Executive for the operations of CRF plant. The financial debt of the CFAL of Rs. 178 Crores was sought to be 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 ....
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....d's application and remanded the matter to the CoC for reconsideration of the issue of ineligibility of Cosmic CRF Ltd under Section 29A IBC after giving it opportunity of being heard. 18. On 14.02.2025 RP requested the Appellant herein to make the necessary compliance pursuant 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 f....
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....ism till the next date of hearing, and parties were directed to file their respective replies on the maintainability of IA/1240/ND/2025. 24. In its 57th meeting dated 22.03.2025, the CoC was of the opinion that: o In light of the provisions of RFRP, Consortium agreement executed between 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 t....
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....pellant contends that they are the lead member of a consortium (PRA) and authorized to do all communications & bidding on its behalf. Appellant, being the sole point of contact as per RFRP, had done all communications, negotiations, paid EMD and submitted the resolution plan and it was declared the 'winner'. Thereafter basis Appellant's complaint against the violation of Section 29A of 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 Ap....
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....acts that go to the root of the matter, that ought to have been considered by the NCLT, especially in light of the order passed by the ED. o The illegalities highlighted by Appellant and relief sought had nothing to do with Appellant's rights or eligibility as a PRA, as Appellant had sought reconstitution of CoC & appointment of new RP and issuance of fresh RFRP & IM itself. 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 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 ....
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....hallenge mechanism. 40. Further, the Appellant-Myotic being lead member had paid EMD from its account to the CoC, on the basis of the IM issued in violation of law by a CoC constituted in violation of law, and had diligently participated in the entire bidding process, and was also the sole complainant against the ineligible bidder Cosmic CRF and therefore had sufficient locus to maintain both the applications, especially when no one else was bringing on record certain glaring facts except 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 ....
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.... & (9) of the CIRP Regulations while examining the eligibility of Respondent No. 3 under Section 29A of the Code, which categorises due diligence based on the material on record. 46. Resolution Professional places it, reliance on Arcelormittal India Private Limited v. Satish Kumar Gupta, [(2019) 2 SCC 1], and contends that the role of the Resolution Professional is merely to facilitate and the final decision is within the domain of the members of the CoC. RP also relies upon this Appellate Tribunal's decision 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 envis....
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..... Bhushan Power & Steel Limited & Ors.; Civil Appeal No. 1808 of 2020, wherein it was held that the Adjudicating Authority cannot delve into the merits or validity of attachments or investigations carried out under PMLA. Furthermore, the instant appeal is entirely silent with respect to any challenge or reference to the findings of the Enforcement Directorate. There is no whisper in the pleadings, prayers, or grounds of appeal that refer to the provisional attachment or investigation conducted by the ED. Therefore, 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 appro....
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....nsortium and their participation in the CIRP shall be deemed as withdrawn. It was also mentioned in the letter that they have revoked the Power of Attorney which was granted in favour of Myotic. Email dated 18.03.2025 sent by Fortune to RP reiterating their stance as conveyed vide email dated 07.03.2025. Email dated 19.03.2025 sent by Fortune to RP reiterating that they hold no association, liability or responsibility for any actions, commitments or representations made by Myotic and that their withdrawal from CIRP of the Corporate 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....
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....thdrawal of its consortium partner. Further, the NCLT vide the impugned order holds that the application of the Appellant is not maintainable as they do not have the locus standi. Thus, the NCLT was determining whether the Appellant had locus standi to maintain the present application. Further, NCLT vide order dated 17.03.2025 had directed the Appellant to file reply only qua the maintainability of the application. This order was not challenged and had therefore attained finality. 60. Appellant had argued regarding the conduct of RP 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....
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.... Plan. Myotic was very well aware that it was not individually eligible to meet the eligibility criteria and once Fortune abandoned the Consortium, Myotic was left with no choice and therefore, first tried to fabricate/forge documents to keep consortium alive, while myotic subsequently tried to take aid of other partners. Furthermore, the CIR Process is a running process and neither the detailed EoI, nor the RFRP permits a change of partner, midway in the process. At the very inception, all PRAs are required to submit documents of their net-worth and also Section 29A compliances 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 Partne....
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....ly tried to play fraud upon the Tribunal below but has also tried to play a fraud upon this Appellate Authority. The Appellant has placed reliance on the ED Provisional Attachment Order dated 25.03.2025 and also upon the various other pleadings in the Appeal which did not form part of the documents/pleadings of IA 1240/2025 upon which the impugned Order dated 29.05.2025. The entire argument in the impugned Order was made by the Counsel of the Appellant on the basis of the ED Order and averments made therein even- though that was not the subject matter or the grounds urged before the 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.....
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....ever appealed against by the Appellant/Myotic. 74. On the very next day itself (i.e. 18.03.2025), an unnotarized affidavit dated 11.03.2025 was emailed by Myotic to the RP, claiming that Fortune has withdrawn the letter dated 07.03.2025. The RP by email dated 18.03.2025, sought clarification from Fortune with respect to the same. 75. Fortune by email dt. 19.03.2025 stated that no such affidavit dt. 11.03.2025 has been given by Fortune and reiterated its stand as stated in letter dated 07.03.2025. 76. Respondent no. 4 (Prudent ARC Ltd.) filed its reply on maintainability of IA 1240/2025 on 26.03.2025 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. & An....
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....ondent No.1 wherein it was categorically expressed that Respondent No.7 no longer wished to remain a part of the consortium or the bidding process and will no longer participate any further in the CIRP and thus their participation in the bidding process shall be deemed as withdrawn. Further, in continuation of the categorical and unequivocal stand, an email dated 18th March, 2025 was again sent wherein it was reiterated that Respondent No.7 does not wish to further participate further and/or engage into discussions on the matter and the stand taken by letter dated 7th March, 2025 be taken on record. Thereafter, 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 w....
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....025 revoked the Power of Attorney issued in favour of Myotic. Therefore, Fortune contends that it has unequivocally revoked the power of attorney in favour of Myotic and withdrawn from the consortium. Fortune also issued an email dated 18.03.2025 to RP confirming that Fortune has already officially conveyed its stand vide letter dated March 07, 2025 and the same shall be taken on record and Fortune does not intend to engage into any discussions in respect of the matter. Myotic also issued an email dated 18.03.2025 to the RP wherein, inter alia, Myotic submitted a forged unnotarised affidavit dated 11.03.2025 signed 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 sta....
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....o., initially found Cosmic CRF Limited - R3 as ineligible under Section 29A. On 06.11.2024, Cosmic CRF - R3 filed I.A. No. 5392 of 2024 challenging this ineligibility. The Adjudicating Authority, by order dated 09.01.2025, remanded the case back to the CoC for reconsideration and directed the RP and CoC to provide Cosmic CRF a fair opportunity to present its case. 87. It is the claim of the resolution professional that he fully complied with the order of the AA dated 09.01.2025. He sought legal opinion from a Senior Advocate on the eligibility of Cosmic CRF under Section 29A. The legal opinion opined in favour of Cosmic CRF'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 ....
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....ders dated 28.05.2025 and 29.05.2025 dismissed both applications filed by the Appellant bearing I.A No. 1240 of 2025 and I.A. No. 2548 of 2025 as being non- maintainable in law. 90. To decide these two Appeals, the crucial issue in this case is whether Appellant was lacking any locus standi to pursue before the Adjudicating Authority and whether any error has been committed by the AA on this ground. 91. The Appellant/Myotic has raised primarily the contention in the first Appeal 859/2025 that inspite of Myotic's consortium partner withdrawing from the Consortium, Myotic still being the lead member based on the power of attorney by Fortune continues to be eligible 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 improp....
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....t also contends that Section 5(25)^1 and Section 25(2)^2 of the IBC, read with Regulations 36A(4), (5), and (7)(e) of the CIRP Regulations, makes it clear that eligibility must be assessed with respect to the qualified 'consortium', not its 'individual' members. Furthermore, Appellant alone doesn't have the minimum tangible net worth required to qualify as a PRA which was Rs.100 crores. Myotic's net worth, as submitted to the CoC, is only Rs.43.21 crores, while Fortune's was Rs.140.69 crores. Thus, on account of withdrawal of Fortune, Myotic individually will not be able to meet the eligibility criteria of minimum tangible net worth of Rs. 100 crores. Therefore, Myotic is not 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....
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....nsortium namely M/s Fortune Global Solutions Ptd. Ltd had withdrawn from the consortium agreement and the Appellant is an entity which is different than the consortium, which was a PRA. Consortium was having the net worth of more than Rs. 100 crores and was meeting the eligibility criteria. Appellant alone i.e. Myotic does not meet the eligibility criteria as its net worth is much less than Rs. 100 crores. In such a situation, the eligibility of the Appellant goes away. Therefore, Myotic alone who is an Appellant cannot be a PRA. We further note that Appellant has been seeking to replace consortium partner but has not been able to provide any provision in the RFRP relating to replacement 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 crore....
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....ating Authority has wrongly declared the appellant as ineligible. The sole defense of the Appellant is that the Power of Attorney executed by the Fortune Global Solutions PTE Ltd. is irrevocable and the consortium partner cannot withdraw from the consortium. In this regard, Respondent No 5-UCO Bank places its reliance on the judgment of the Hon'ble Supreme Court in the matter of M.S. Ananthamurthy & Anr. vs J. Manjula Etc. 2025 SCC Online SC 448 wherein it is held that merely using the word 'irrevocable' will not make the POA irrevocable until the POA is coupled with interest, no extraneous expression can make the POA irrevocable. The relevant extract of this judgment is produced as follows: ".... 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 explaine....
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....ictly construed as giving only such authority as they confer expressly or by necessary implication. Where an act purporting to be done under the power of attorney is challenged as being in excess of the power, it is necessary to show that on a fair construction of the whole instrument the authority in question is to be found within the four corners of the instrument either by express terms or by necessary implication. Some of the principles governing the construction of a power of attorney are: (1) the operative part of the deed is controlled by the recitals, (2) where an authority is given to do particular acts, followed by general words, the general words are restricted to what is necessary for the performance of the particular 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 d....
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....y reason of not having required annual turnover and therefore would have suffered disqualification. If MEE had withdrawn from JV after award of contract, two things would have been possible. First, as per instruction 2.3(v) of tender schedule, the Government may have agreed for the change of MOU/JV and allowed the petitioner JV to continue the contract. Second option was that the employer could have refused the change of MOU/JV and compelled the remaining JV partner to complete the work accepting the liability. As the things stand the respondents rejected the tender of the petitioner on the ground that petitioner JV is not existent due to withdrawal of MEE. This situation is no different from the first situation. Indeed as noticed above in their letter 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. V....
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....he Corporate Debtor-BPSL. .... (iv) The Resolution Plan of JSW as approved by the CoC did not confirm the requirements referred to in subsection (2) of Section 30, the same being in flagrant violation and contravention of the expressed provisions of the IBC and the CIRP Regulations. The said Resolution Plan therefore was liable to be rejected by the NCLT under sub-section (2) of Section 31, at the very first instance. 84. In that view of the matter, the following order is passed: (ii) The Resolution Plan of JSW as approved by the CoC stands rejected... (iii) the Adjudicating Authority, i.e. the NCLT is directed to initiate the Liquidation Proceedings against the Corporate Debtor " [Emphasis supplied] 103. We will now look into the issue whether as per the law laid by Hon'ble Supreme 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 di....
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....hat Cosmic CRF Limited is not eligible under Section 29A. We also note that despite multiple initial reports and despite Cosmic CRF Limited - Respondent No.3 having been given opportunity of being heard, all reports suggest non- eligibility of Cosmic CRF Limited - Respondent No.3 except the view of senior advocate, which was obtained on the final report of PSA. Even if we don't rely on these reports of law firms we find that the respondents have not satisfactorily replied to the real issues raised by the appellant from pages 66- 72 and 88-100 of Appeal Paper Book. 107. It is sufficient to note by us that it is the duty of RP and CoC to ensure that the Resolution Applicant satisfies all conditions which do not make them ineligible under Section 29A. At the initial stages detailed discussions have taken place in the CoC meetings regarding 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: ....
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....ED FURTHER to withdraw the earlier declaration of RA Consortium of Myotic Trading Private Limited & Fortune Global Solutions Pte Ltd as Winner of Challenge Mechanism Process as CoC wanted to resume the Challenge Mechanism Process. RESOLVED FURTHER THAT, RP may communicate the said decision of CoC to RA Cosmic CRF Limited and Consortium of Myotic Trading Private Limited & Fortune Global Solutions Pte Ltd to take necessary steps as may be deemed necessary." 108. We note that it is the duty of RP/CoC to decide about the eligibility under Section 29A and RP/CoC could have obtained expert advice but should also have applied their own wisdom particularly so when it is a question of legal requirement under Section 29A of the Code, and when earlier multiple expert opinions were available against Cosmic CRF Ltd. and were not on records in the relevant meeting a contrary view should not 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....
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....l (AT)(Ins) No. No. 371 of 2022] wherein while relying upon the decision of the Hon'ble Supreme Court in Arcelormittal (supra) has held as follows: - "7. The ratio of the judgment of the Hon'ble Supreme Court as is culled out from paras 80 & 81 is that the Resolution Professional is not to take a decision regarding the ineligibility of the Resolution Applicant. It has only to form its opinion because it is the duty of the Resolution Professional to find out as to whether the Resolution Plan is in compliance of the provisions of the Code or not the Resolution Professional can give his opinion with regard to each plan before the CoC and it is for the CoC to take a decision as to whether the plan is to be approved or not. In para 5 of the impugned order, we have noticed that the direction has been issued to the Resolution Professional to place all the Resolution Plans along with his opinion on the contravention 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 t....
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....lso included and admitted the claim of an Amtek group company, WLD Investments Pvt. Ltd., which is also a shareholder of the corporate debtor as a creditor in the Committee of Creditors thereby discrediting the entire resolution process and possible violation of IBC Act, 2016." 114. Both RP (who is also a RP in the instant matter) as well as the Corporate Debtor have been seriously indicted in this report. It is claimed that these are subsequent findings and were not pleaded before NCLT. It is to be noted that many of these issues had been raised earlier also in the complaint dated 27.08.2024 by an NGO Energy watchdog which is on record at page 159-163 of Appeal Paper Book. Furthermore, we note that in the orders of Hon'ble Supreme Court in Writ Petition (Crl.) No. 246/2022 - Jaskaran Singh Chawla Vs. Union of India & Ors. the issue relating to a humongous fraud committed by M/s. Amtek Auto Limited and its associated companies was considered. 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 ....
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....ty in the proceedings before the Hon'ble Supreme Court and that order was not relating to the Corporate Debtor of this case and therefore, it was not his duty to bring all these facts pertaining to this litigation in the Information Memorandum. It is also claimed that the provisional attachment order is yet to be confirmed by the Adjudicating Authority and also that the provisional attachment order mentions that WLD investment holds only 5.12% shares in the CD and is a related party which apparently is an incorrect conclusion as minimum shareholding required to became related party is 20%. We have considered these submissions and consciously not going into the merits of the material collected during the investigation by the ED and at the cost of repetition we put on record that the material collected by the ED is to be seen by the special court who is seized of the matter and therefore it will not be appropriate for us to comment anything on the said material or on 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 t....