TaxTMI 
TaxTMI 
2025 (8) TMI 868
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....cating Authority (National Company Law Tribunal) Chandigarh Bench, Court-1 Chandigarh. In Company Appeal (AT) (Insolvency) No. 887 of 2025, challenge is to the order dated 11.06.2025 passed in CA No.786 of 2019 by which order the Adjudicating Authority allowing the application directed for liquidation of the Corporate Debtor. Company Appeal (AT) (Insolvency) No. 888 of 2025 has been filed challenging the order dated 11.06.2025 by which order IA No.483(CH)2024 filed by the Appellant seeking a direction to treat the Resolution Plan submitted by Appellant as approved has been rejected by the impugned order dated 11.06.2025. 2. Brief facts of the case necessary to be noticed for deciding these Appeals are : - 2.1. The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor- 'Richa Industries Ltd.' commenced vide order dated 21.12.2018. Appellant claiming to be Financial Creditor having vote share of 8.94% had submitted a Resolution Plan which Resolution Plan came to be rejected by the Committee of Creditors (CoC) on 03.09.2019. Resolution Professional filed CA No.786 of 2019 seeking liquidation of the Corporate Debtor. Indian Overseas Bank and Corporation Bank bein....
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....ant was approved by requisite majority of votes as required under Section 30(4) of the IBC. Both Resolution Professional and the Adjudicating Authority committed error in holding that the Resolution Plan submitted by Appellant was not approved by 66% vote. It is submitted that Section 30(4) after amendment by Act 8 of 2018 requirement of 66% of voting share of the Financial Creditors is predicated on considering its feasibility and viability. It is submitted that for considering feasibility and viability, the members of the CoC has to be present in the meeting and those members of the CoC who are not present in the meeting their votes cannot be included for computing majority of vote share of Financial Creditors. It is submitted that votes given by only those members of the CoC who are present in the meeting where feasibility and viability of the plan needs to be counted either for or against the Resolution but those members who did not attend the meeting cannot be said to have considered the feasibility and viability of the plan and their votes cannot be included for computing the majority of 66%. It is submitted that amendment in CIRP Regulations 2016 i.e. deletion of Regulation ....
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....equirement of 66% has to be computed on the voting share of the Financial Creditors and Section 30(4) does not provide for taking into consideration only the votes those who are present and voting. It is submitted that the concept of present and voting has not been used in Section 30(4) whereas there are other provisions in IBC which provide for counting of votes who are present and voting. He has referred to Section 25A (3A). He submits that the judgment of the Hon'ble Supreme Court in "K. Sashidhar" (supra) is fully applicable. Hon'ble Supreme Court had interpreted the provisions of Section 30(4) i.e. 66% of voting share and held that the said provision does not contemplate counting of votes only those present and voting. It is submitted that those creditors who have abstained from voting, their votes have also to be computed for finding out 66% of the voting share of the Financial Creditors. It is submitted that in the voting held on the plan as per the Appellant only 52.02% has voted in favour of the plan, hence, the vote of 66% could not be achieved. The Resolution Plan of Appellant was rightly rejected. It is submitted that the amendment in CIRP Regulations 2016 specially del....
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.... - - 8. Reliance Commercial Finance Limited 0.91 - - 9. Ashv Finance Limited 1.13 - - 10. Catalyst Trusteeship Limited 2.00 - - 11. Toyota Financial Services India Ltd - 0.06 - 12. Indian Overseas Bank - - 35.22 13. Corporation Bank - - 12.15 14. HDB Financial Services Ltd - - 0.53 Total 52.02 0.08 47.90 To pass, the resolution required 66% votes in favour, and hence resolution no. 1(b) failed." 10. The above indicate that in favour of the Resolution, there were 52.02% votes and against only 0.08% and 47.90% have abstained which included the Indian Overseas Bank and the Corporation Bank. The submission of the Appellant, as noted above, is that while computing 66% vote shares as required by Section 30(4) only votes of those who have voted in favour of the plan or against the plan need to be taken note of by computing the majority and according to the said, more than 97% of those who voted in favour and against the plan has voted for the plan and decision of the Resolution Professional that plan did not obtained 66% vote is incorrect whereas the su....
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....d rule of statutory construction that no additional word or expression can be read in a statutory provision. Addition of any word for purpose of interpretation is clearly prohibited. When the expression used is "voting share of the Financial Creditors", the 66% has to be computed from the voting share of the Financial Creditors. Section 30(4) cannot be read to mean that 66% has to be determined only from the vote share of those who are present and voting in the meeting. The submission of the Appellant that vote share has to be taken of only those Financial Creditors who are present in the meeting and voting is clearly also negated by CIRP Regulations 2016. Regulation 25 deals with "voting by the Committee". Sub-regulation (5) was substituted in Regulation 25. Regulation 25 is as follows:- "25. Voting by the committee. (1) The actions listed in section 28(1) shall be considered in meetings of the committee. (2) Any action other than those listed in section 28(1) requiring approval of the committee may be considered in meetings of the committee. (3) [The resolution professional shall take a vote of the members of the committee present in the meetin....
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....t of present and voting. Section 25A (3A) is as follows:- "25A. Rights and duties of authorised representatives of financial creditors: (3A) Notwithstanding anything to the contrary contained in sub-section (3), the authorised representative under sub-section (6A) of section 21 shall cast his vote on behalf of all the financial creditors he represents in accordance with the decision taken by a vote of more than fifty per cent. of the voting share of the financial creditors he represents, who have cast their vote: Provided that for a vote to be cast in respect of an application under section 12A, the authorised representative shall cast his vote in accordance with the provisions of subsection (3)" 17. The legislature thus, in above provision clearly provided that voting is to be taken into consideration of those who cast their votes. Section 30(4) is a provision requiring special majority for passing a special resolution. When the statute provides for passing any resolution by special majority that has its purpose and object, requirement of special majority for passing a Resolution Plan and that too 66% of voting share of the Financial Creditors, has to be given....
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.... come to the judgment of this Tribunal by Appellant in "Tata Steel Ltd." (supra). The Adjudicating Authority in the impugned order has noticed the judgment of this Tribunal in "Tata Steel Ltd." (supra) decided on 04.02.2019. This Tribunal in paragraphs 45 and 46, following has been observed:- "45. A member of the 'Committee of Creditors' who is not present in the meeting either directly or through Video Conferencing and thereby not considered its feasibility and viability and such other requirements as may be specified by the Board, their voting shares, therefore, cannot be counted for the purpose of counting the voting shares of the members of the 'Committee of Creditors'. Therefore, we hold that only the members of the "Committee of Creditors' who attend the meeting directly or through Video Conferencing, can exercise its voting powers after considering the other requirements as may be specified by the Board. Those members of the 'Committee of Creditors' who are absent, their voting shares cannot be counted. 46. We find that the 'Resolution Plan' submitted by 'JSW Steel' has been approved by the 'Committee of Credi....
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....Banks namely- Oriental Bank of Commerce, Central Bank of India and Bank of Maharashtra having 29.12% voting share informed that they remained open and awaiting approval from the sanctioning authority. Oriental Bank of Commerce and Bank of Maharashtra have conveyed their approval whereas Central Bank of India conveyed its disapproval to the revised plan. Hon'ble Supreme Court noticed that the voting share of consenting banks was only 66.67% and voting share of dissenting bank was 26.97%. In the said case, NCLT took the view that those Financial Creditors who chose not to participate in the voting, the votes and majority be counted without their votes. NCLT took the view that those who participated and approved were 78.63%, hence, the plan is approved which order in the appeal was set aside by the NCLAT against which order the matter travelled to the Hon'ble Supreme Court. It is useful to notice following part of paragraph 6 of the order:- "6. ............After interacting with the bankers, a counter proposal was given by the corporate debtor which was eventually considered in the 9th CoC meeting held on 27-10-2017. The proposal submitted by the corporate debtor on 26-10-201....
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....., 2017 SCC OnLine NCLT 12610], eventually, allowed the petition filed by the corporate debtor and approved the resolution plan/revised OTS scheme, as submitted by the resolution professional vide affidavit dated 3-11-2017, and further declared that the moratorium imposed on 10-2-2017, ceased to have effect from the date of receipt of copy of the order. A further direction came to be issued that the corporate debtor shall reinstate all the employees who were on the rolls of company. Aggrieved by the said decision, three financial creditors who were part of CoC, namely, Indian Overseas Bank, Central Bank of India and Bank of Maharashtra filed appeals under Section 61 before NCLAT questioning the authority of NCLT Hyderabad, to approve of the resolution plan, despite the fact that the same did not receive approval of not less than 75% of voting share of financial creditors. The Managing Director of the corporate debtor also filed an independent appeal under Section 61 of the I&B Code with reference to the observations made by NCLT Hyderabad regarding the corporate guarantee to be proceeded with. As aforesaid, these appeals were heard together along with appeals concerning another cor....
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....d later additionally by 11.82% by email. Thus, the resolution plan was expressly rejected by not less than 25% of voting share of the financial creditors. In such a case, the resolution professional was under no obligation to submit the resolution plan under Section 30(6) of the I&B Code to the adjudicating authority. Instead, it was a case to be proceeded by the adjudicating authority under Section 33(1) of the I&B Code. Similarly, in the case of corporate debtor IIL, the resolution plan received approval of only 66.57% of voting share of the financial creditors and 33.43% voted against the resolution plan. This being the indisputable position, NCLAT opined that the resolution plan was deemed to be rejected by CoC and the concomitant is to initiate liquidation process concerning the two corporate debtors." 26. The Hon'ble Supreme Court in the above case has noted the amended definition of Regulation 2(1)(f) where the dissenting Financial Creditors who voted against the plan are abstained from voting for the Resolution Plan. 27. It is further relevant to notice that the Hon'ble Supreme Court referring to the Regulations 25 and 39 of the CIRP Regulations 2016 held that Regulat....
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....he said judgment is distinguishable. Section 30(4), as noted above, prior to this amendment w.e.f. 23.11.2017 provided the CoC may approve the Resolution Plan by vote of not less than 75% of the voting share of the Financial Creditors. After the amendment also Section 30(4) provided the percentage of voting share of the Financial Creditors and 75% was reduced to 66% w.e.f. 06.06.2018 but the substantive provision which required percentage of voting share of the Financial Creditors remains the same prior to amendment and subsequent to amendment. The judgment of the Hon'ble Supreme Court in "K. Sashidhar" (supra) interpreted Section 30(4) in the above context and the amendment of Regulation subsequently on which reliance has been placed by the Appellant that Regulation 2(1)(f) which defines the dissenting Financial Creditor was omitted w.e.f. 05.10.2018 is inconsequential and can have no effect on the interpretation of Section 30(4). As noted above, the Hon'ble Supreme Court has held that Regulation 25 of the CIRP Regulations has to be read in accordance with Section 30(4). Thus, what is contained in substantive provision of Section 30(4) has to be given effect to and Regulations hav....