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2025 (9) TMI 484
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....ura MN, MS Jasleen Singh, Adv. JUDGEMENT NARESH SALECHA, MEMBER (TECHNICAL) 1. There are two appeals containing Comp. App (AT) (INS) No. 1627 of 2024 and Comp. App (AT) (INS) No. 1628 of 2024 filed by the Appellant i.e. Praful Satra who is the suspended director of M/s Satra Properties (India) Limited ('Corporate Debtor') under section 61 of the Insolvency and Bankruptcy Code, 2016, ['Code'] assailing the order dated 26.07.2024 ['Impugned Order'] passed by the National Company Law Tribunal, Mumbai Bench-I ['Adjudicating Authority'] in INV. P. No. 19 of 2024 ['Intervention Application'] in I.A. No. 2273 of 2021 and in I.A. NO. 2280 of 2020 in C.P. (IB) No. 1632/MB/2019. Vaishali Patrikar who is the Resolution Professional of Satra Properties (India) Limited is the Respondent No.1 herein. Committee Of Creditors of Satra Properties (India) Limited is the Respondent No.2 herein. MJ Shah Group Consortium of MJ Shah Enterprise, MJ Shah Realtors LLP, Centrio Lifespaces Limited is the Respondent No.3 herein. Asset Reconstruction Company (India) Limited is the Respondent No.4 herein. 2. The Appellant submitted that the Corporate Debtor owns specific properties, inclu....
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.... Plan of Respondent No. 3 was approved by 80% voting, despite objections from the Appellant's representative regarding Respondent No. 3's eligibility. 7. The Appellant contended that in October 2021, the erstwhile Resolution Professional filed I.A. No. 2273 in C.P. (IB) No. 1632/2019 under sections 30(6) and 31of the Code for plan approval. 8. The Appellant stated that he engaged services of valuer, Sadashiv Nargundkar and Associate, for valuation of said properties (Sadashiv) on 26.02.2024 who valued two major assets (Jodhpur and four portions of Kalina land) at approximately Rs. 124 crores. The Appellant contended that in March 2024, the Appellant filed INV. P. No. 19 of 2024 in I.A. No. 2273 of 2021 under section 60(5) read with Rule 11, seeking intervention due to incorrect valuation affecting stakeholders, which was wrongly disapproved by the Adjudicating Authority in the Impugned Order. 9. The Appellant submitted that the Adjudicating Authority erred in not considering collusion between Respondent No. 1 and 3 to transfer assets of the Corporate Debtor at low value, affecting the Appellant as guarantor, with Respondent No. 2 approving Respondent No.3's Resolut....
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....esh valuation to rectify the issues. The Appellant submitted that and a fresh valuation would not prejudice any parties' rights while enhancing the Corporate Debtor's assessment as a going concern. 13. Concluding his arguments, the Appellant requested this Appellate Tribunal to set aside the Impugned order and allow both appeals. 14. Per contra, the Respondent No.1 denied all the averments made by the Appellant as misleading and baseless. 15. In outlining the factual background, the Respondent No. 1 submitted a chronology of events, commencing with the admission of the Section 7 petition by Vistra ITCL (India) Ltd. on 03.08.2020, appointing Mr. Devarajan Raman as Interim Resolution Professional (IRP), who was later confirmed as Resolution Professional (RP) and substituted by the Respondent No. 1 on 22.09.2022. The Respondent No. 1 contended that public notices were issued on 08.08.2020 and 15.08.2020, and the list of creditors and CoC constitution was filed with the Adjudicating Authority on 26.09.2020. The Respondent No.1 stated that the reply is based on available records. She contended that the appeal is not maintainable in law or on facts, as it is filed by a n....
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....that resolution plans below liquidation value are within CoC's commercial wisdom. The Respondent No. 1 further submitted that, even assuming improper valuation, no prejudice arises to the Appellant, as valuation reports guide the CoC, which may approve plans below liquidation value, in terms of the judgment delivered by the Supreme Court of India in the matter of Maharashtra Seamless Ltd. v. Padmanabhan Venkatesh & Ors., [(2020) 11 SCC 467]. 20. The Respondent No. 1 contended that the objection by the Appellant to valuation is belated and aimed at derailing CIRP, as the Appellant attended 12 of 15 CoC meetings, was informed of all proceedings, yet raised no objection to property descriptions. The Respondent No. 1 submitted that minutes of 3rd CoC meeting recorded non-provision of information by suspended management, affecting resolution; 8th CoC meeting noted failure on part of the Appellant to provide details of Kalina tenants/occupants details and Jodhpur inventory. The Respondent No. 1 submitted that the Information Memorandum, published January 2021, described properties including Kalina and Jodhpur, yet elicited no objection from the Appellant. 21. The Respondent No.....
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....pany (India) Limited at 51.68% and Vistra ITCL (India) Ltd. at 22.25%. The Respondent No. 1 contended that during the 1st CoC meeting on 03.10.2020, the IRP informed the CoC of asset monitoring efforts amid the lockdown, including visits by Erstwhile RP to Borivali, Kalina, and the registered office, with photographs collected for the Jodhpur property. 25. The Respondent No. 1 further submitted that valuers were appointed on 19.10.2020, and during the 2nd CoC meeting on 26.11.2020, the Erstwhile RP highlighted incomplete information from suspended management for the Information Memorandum (IM), theft of inventory at Jodhpur during lockdown. The Respondent No. 1 submitted that in the 3rd CoC meeting on 31.12.2020, the RP reiterated the erstwhile management's failure to furnish requisite documents, including Kalina property legal papers and Jodhpur inventory details. The Respondent No. 1 stated that Form G for Expression of Interest (EOI) was published on 04.01.2021, with the IM circulated to the CoC on 30.01.2021, referencing CTS Nos. 7530, 7530/1 to 4, 7536, and 7634 for the Kalina property, without objection from the Appellant at that time. 26. The Respondent No. 1 furth....
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....ondent No. 1 further submitted that on 28.01.2022, an email corrected an inadvertent omission in the IM regarding Kalina CTS Nos., providing an updated IM. The Respondent No. 1 submitted that the CIRP was fair, the plan was approved by the CoC after due deliberations despite the Appellant's obstruction by withholding asset details. The Respondent No.1 stated that valuers considered provided documents, including full Kalina land book value in RNC report and CTS Nos. in Adroit report; the data room was updated, PRAs had access, and CoC raised no objections. The Respondent No. 1 submitted that allegations of collusion between Respondent No.1/RP with SRA. 30. Concluding her arguments, the Respondent No.1 requested this Appellate Tribunal to dismiss the present appeals. 31. The Respondent No. 2 contended that, as a disclosure, subsequent to orders dated 22.11.2023 and 05.12.2023 passed by the Adjudicating Authority in I.A.s 1686 of 2020 and 1687 of 2020 filed by IIFL Finance Limited and IIFL Home Finance Limited respectively, the claim of IIFL Finance has been admitted for Rs. 185,54,92,275/- and the claim of IIFL Home Finance for Rs. 25,62,25,566/-, resulting in the responding me....
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....ntention that valuation is non- binding on CoC, for reasons that said valuer Shadashiv was appointed 19 February 2024, 3.5 years after Adroit and RNC valuations in August 2020; inconsistent approach, valuing Jodhpur on "as is where is" basis but not Kalina; assumption of sites suitable for development unchecked, ignoring tenants on Kalina with contractual arrangements refusing eviction, cost not considered. 37. Concluding the arguments, the Respondent No.2 requested this Appellate Tribunal to dismiss the appeals. 38. The Respondent No. 3 submitted that as SRA it fully satisfies all eligibility criteria prescribed under the Code, including Section 29A, with no legal bar to its participation in the resolution process. The Respondent No.3 stated that the SRA, being a financially sound and technically competent entity, has undertaken to complete several stalled projects of the Appellant, who has been unable to do so. The Respondent No.3 submitted that the Appellant's objections to the SRA's eligibility, previously raised in IA No. 2586 of 2021, were adjudicated and dismissed by the Adjudicating Authority vide its Order dated 19.12.2023. The Respondent No. 3 contended that the App....
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....rsuant to an Assignment Agreement dated 30.12.2021, ARCIL is the assignee of all loans disbursed by IIFL Finance Ltd. to the Corporate Debtor, Satra Properties (India) Ltd. (SPIL), along with all rights, title, and interest in the financing documents, including underlying security interests and guarantees. ARCIL holds a 51.68% voting share in the CoC of SPIL, as confirmed by the Adjudicating Authority in its order dated 05.12.2023 in I.A. No. 1687 of 2020, which has been upheld by this Appellate Tribunal on 15.04.2024 and the Hon'ble Supreme Court of the India on 10.05.2024. 45. The Respondent No. 4 submitted that the Adjudicating Authority rightly dismissed the Appellant's Intervention Petition No. 19 of 2024 vide the Impugned Order dated 26.07.2024, which challenged the Resolution Plan submitted by Respondent No. 3, MJ Shah Consortium. The Respondent No. 4 emphasised that the Resolution Plan was approved by the CoC with a 95.40% majority on 21.09.2021, compliant with Section 30(2) of the Code. 46. Concluding his arguments, the Respondent no.4 requested this Appellate Tribunal to dismiss present appeals. Findings 47. The Appellant has filed two appeals challenging the ....
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....rtion of land Kalina and hotel FSI potential in Jodhpur property were not valued and ignored by registered valuers or for other properties only book value was taken despite Appellant furnishing all the information. The Appellant submitted that this is clear material irregularities and appeal is maintainable under Section 61(3)(ii) of the Code. The Appellant also pleaded that commercial wisdom of CoC is not unfettered and is subject to judicial scrutiny. On the other hand, all four Respondents i.e., RP/ Respondent No. 1, CoC/ Respondent No. 2, SRA/ Respondent No. 3 and ARCIL/ Respondent No. 4 (who is also members of the CoC) (we will treats all Respondents collectively as the Respondent's) denied all the averments made by the Appellant and submitted that the Appellant is habitual litigant and has been raising frivolous issue through several appeals or filing different I.A.'s before the Adjudicating Authority as well as before this Appellate Tribunal. All four Respondents submitted that the Appellant has miserably failed at all judicial fora and lost his cases. The highlights of the defence of the Respondents is that the Appellant has got no locus to file the present appeal in view o....
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....ils and personal requests to the Appellant. 57. All four Respondents brought out that the information as available in the books of Corporate Debtor or as partially supplied by the Appellant, were incorporated in the Information Memorandum and when subsequent new facts were brought to the notice, they have updated the Information Memorandum and included land parcels of Kalina Property in Information Memorandum on 06.09.221 and subsequently perspective Resolution Applicants revised their offers, which was duly considered by the CoC. 58. All four Respondents submitted that even on facts the Appellant is absolutely incorrect and stated that the Resolution Plan was of Rs. 184,09,33,297/- which is more than the fare value of Rs. 97,64,66,956/- and the liquidation value of Rs. 77,06,45,942/-. 59. All four Respondents denied the Appellant allegations regarding non compliant/ Resolution plan and submitted that the Resolution Plan was approved by the CoC and as well as by the Adjudicating Authority and is in full compliance to the Code and the Regulations. The Respondents stated that the Resolution Plan was approved by the CoC with 95.40% of voting shares. 60. All four Respondent....
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....ly, Adroit Appraisers and Research Private Limited and RNC Valuecon LLP, for determining fair and liquidation value, with a third valuer, Ms. Gunjan Agarwal, for SFA valuation who have taken into consideration all the facts. We further take into consideration that the Appellant himself has not supported the CIRP and did not furnish the various information sought by the RP from time to time in so much so that RP had to move IA before the Adjudicating Authority seeking co- operation of the Appellant in furnishing the information and documents. We take note of the fact that despite the Adjudicating Authority's order to the Appellant to furnish all information and documents to the Respondent No. 1, the Appellant did not give the relevant information and documents. This reflects poorly on the conduct of the Appellant. Be that as it may, it is a fact that the RP got valuation done based on all available record that it and valuation was done strictly by Registered Valuers in accordance with the Code and the Regulations. We are aware that the erstwhile RP appointed two IBBI-registered valuers on 19.10.2020, following Regulation 27(1) of the CIRP Regulations and the valuation reports were s....
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...., who is the Suspended Director of the CD as well as the Personal Guarantor of the CD is not in accordance with the Code and the Regulations. We deemed it fit to ignore pleading of the Appellant on this count too. In any case, the said valuation report of Sadashiv Nargundkar and Associate assume that everything is in order for all the properties including the no litigation on disputes w.r.t any of the CD property, which is quite contrary to the facts as noted from the appeal books as well as from the submissions made by the all the four Respondents before us during pleadings. We hold that all such factors will definitely impact the valuation of the properties. We are aware that the valuation is a job which is required to be done by the experts and the RP engaged the services of two registered valuers, which do not warrant any interference. 70. We further note that the said valuation reports were discussed in several CoC meeting and none of the CoC Member ever raised any objection to the same. It is interesting to note that the Appellant himself attended 12 out of 15 CoC meetings and never raised such objections, about valuation. 71. The fact that the valuation report issue ha....
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....ed by him on behalf of the Corporate Debtor. As regards the valuation is concerned, the CoC members have not objected to the valuation conducted. Moreover, the Resolution Plan was approved by the CoC after considering the updated information in the Virtual Data Room. The valuation was conducted by registered valuers being (i) Adroit Appraisers and Research Private Limited and (ii) RNC Valuecon LLP for obtaining valuation. A third valuer viz. Mr Gunjan Agarwal was appointed for SFA valuation. The Applicant attended the CoC meetings, however the objection qua valuation report is raised by the Application at this stage only to derail the approval of plan. Accordingly, the Intervention Petition No. 19 of 2024 is dismissed." (Emphasis supplied) 74. We do not find any error in the Impugned Order dismissing the Inv. Petition 19 of 2024. We uphold the same and reject the present appeal Company Appeal (AT) (Ins.) No. 1627 of 2024 filed by the appellant. 75. We note that the Resolution Plan was approved after extensive discussions by the CoC in various meetings and finally in 15th Meeting of CoC the same was approved by the CoC with 95.40 % of voting shares. We further note that eve....