TaxTMI 
TaxTMI 
2026 (1) TMI 1354
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.... IA (IBC) (Plan) No. 29/MB/2025. By the impugned order, the adjudicating authority has allowed the IA (IBC) (Plan) No. 29/MB/2025 and approved the resolution plan submitted by the respondent No. 2 - Adani Power Ltd. Aggrieved by the order approving the resolution plan of the corporate debtor - Vidarbha Industries Power Ltd, these appeals have been filed. 2. Comp. App. (AT) (Ins.) No. 1281/2025 has been filed by Western Coalfields Ltd., an operational creditor, who had filed its claim in the Corporate Insolvency Resolution Process (CIRP). Comp. App. (AT) (Ins.) No. 1317/2025 has been filed by one Pradeep Sot an employee of the corporate debtor, aggrieved by approval of the resolution plan which has provided only Rs. 1 crore/- for total operational creditors including employees. 3. Brief facts of the case necessary to be noticed for deciding these two appeals are: i. On an application filed by the financial creditor of the corporate debtor, CIRP against the corporate debtor M/s. Vidarbha Industries Power Ltd. commenced vide order dated 30.09.2024 in company petition bearing C.P. (IB) No. 264/MB - VI/2020. Original financial creditors; Axis Bank and State Bank ....
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....l debt after accounting for the plan amount, the SRA decided instead of converting the resolution operational debt into equity shares followed by capital reduction such residual debts would stand extinguished. x. The CoC convened its 11th Meeting on 01.04.2025 deliberated and unanimously approved the same. RP by additional affidavit dated 02.04.2025 placed the same before the NCLT. The RP also filed a revised Form H as on 20.03.2025 and filed an affidavit dated 27.03.2025 in terms of the order dated 20.03.2023 passed by the NCLT. xi. Adjudicating authority heard the parties and by impugned order approved the resolution plan. Aggrieved by the order approving the resolution plan, these two appeals have been filed. 4. We have heard learned Sr. counsel Ms. Pinky Anand appearing for the appellant in Comp. App. (AT) (Ins.) No. 1281/2025, learned counsels Mr. Anshul Agarwal and Ms. Kamakshi Gupta appearing for the appellants in Comp. App. (AT) (Ins.) No. 1371/2025. We have also heard learned Sr. counsel Mr. Arun Kathpalia appearing for the SRA as well as learned Sr. counsel Mr. Krishnendu Dutta appearing for the RP. 5. Learned Sr. counsel Ms. Pinki Anand appearing ....
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....ident fund and gratuity to current employees. 7. Learned counsel appearing for the SRA refuting the submissions of the appellant submits that the resolution plan approved by the CoC and approved by the adjudicating authority is in compliance with Section 30(2) of the IBC. Replying to the submissions of Ms. Pinki Anand learned Sr. counsel for the appellant, it is submitted that the resolution plan submitted by SRA was approved within 180 days from the commencement of the CIRP. It is submitted that CIRP commenced against the corporate debtor vide order dated 30.09.2024 and the CoC in its 10th CoC Meeting held on 19.02.2025 and 21.02.2025 has approved the resolution plan. When the resolution plan was approved by the CoC within 180 days, there is no occasion for filing any application for extension of CIRP period. The RP also within the period of 180 days has filed an application I.A. (IBC) (Plan) No. 29/2025 on 11.03.2025 thus there is no question of approval of plan being beyond 180 days as contended by learned Sr. counsel appearing for the appellant in Comp. App. (AT) (Ins.) No. 1281/2025. Insofar as the modification dated 01.04.2025 proposed by the SRA and approved by the CoC on....
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....SRA and approved by the CoC was in exercise of power reserved for the SRA under the resolution plan and that in no manner violates the timeline under Section 12(1) of the IBC. The resolution plan fully complies with provisions of Section 30(2) of the IBC. 10. We have considered the submissions of the counsel for the parties and perused the records. 11. We need to first notice the submission raised by the counsel for the appellant in Comp. App. (AT) (Ins.) No. 1317/2025 regarding violation of timelines under Section 12(1) of the IBC. Section 12(1) of the IBC provides for time limit for completion of insolvency resolution process. Sections 12(1) & 12(2) of the IBC are as follows: "12. Time-limit for completion of insolvency resolution process.- (1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process. (2) The resolution professional shall file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyond one hundred and eighty days, if instr....
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....lause 3.3 of the RFRP. The LOI came to be accepted by the SRA on 24.02.2025 and the Performance Security was submitted by it on 27.02.2025." 14. When the resolution plan was approved and the LoI was issued on 24.02.2025 which was accepted on 24.02.2025 and performance security was also deposited on 27.02.2025, the submission of the appellant that CIRP has completed within 180 days is unfounded. There was no requirement for extension of CIRP period since plan stood approved. 15. The next leg of submission on which reliance is placed by the appellant is that SRA modified his resolution plan on 01.04.2025 and the CoC on 01.04.2025 itself has approved the modification, hence the said modification was beyond 180 days and could not have been approved. The SRA has filed an affidavit in the present appeal in Comp. App. (AT) (Ins.) No. 1281/2025, where relevant facts have been pleaded. SRA has relied on Clause 3.7.1 of the resolution plan which relate to acquisition structure. Clause 3.7.1(ii) extracted in paragraph 12 of the short affidavit of the SRA which is as follows: "3.7.1 The structure proposed may, at the Resolution Applicant discretion, but without altering the amou....
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....bmission advanced by the counsel for the appellant in Comp. App. (AT) (Ins.) No. 1281/2025. 17. Now coming to the submissions raised by the learned counsel for the appellant in Comp. App. (AT) (Ins.) No. 1317/2025 which is an appeal filed by one employee claiming to be representative of the employees challenging the approval of the resolution plan. The impugned order has noticed the amount claimed and amount admitted of different stakeholders and the amount proposed in the resolution plan. Paragraph 6.1 of the impugned order captures the salient features of plan approved by the CoC. Paragraph 6.1 is as follows: "6.1 The SRA has proposed a Total Resolution Amount of INR 4000,00,00,000/- (Rupees Four Thousand Crores only) for the resolution of the Corporate Debtor in the following manner: Sr. No. Category of Stakeholder * Sub- Category of Stakeholder Amount Claimed Amount Admitted Amount Provided under the Plan Amount Provided to the Amount Admitted (%) 1. CIRP Cost (Estimated Accrued and Unpaid) N.A. - - 292,91,00,000 - 2. Secured Financial Creditors (b)(ii) who voted in favour of the resolution plan 6200,04,83,387 ....
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....amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub- section (1) of section 53, whichever is higher and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor." 20. In event, the liquidation of the corporate debtor as per Section 53, the liquidation value of the operational creditors including employees being NIL under Section 30(2)(b) no amount was mandated. The payment of Rs. 1 crore/- thus cannot be said to be in any manner in breach the provisions of Sections 30(2)(b) of the IBC. 21. Learned counsel for the appellant has contended that as per Section 30(2)(b), the distribution has to be fair and equitable. 22. Learned counsel for the SRA has relied on the judgment of the Hon'ble Supreme Court in the matter of 'CoC of Essar Steel India Ltd.' Vs. 'Satish Kumar Gupta & Ors.' rep....
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....ditors, together with negotiating with a prospective resolution applicant for better or different terms which may also involve differences in distribution of amounts between different classes of creditors." 23. The Hon'ble Supreme Court in paragraph 90 has held that equality principle cannot be stretched to treating unequal equally. In paragraph 90, following was laid down: "90. ...Quite clearly, secured and unsecured financial creditors are differentiated when it comes to amounts to be paid under a resolution plan, together with what dissenting secured or unsecured financial creditors are to be paid. And, most importantly, operational creditors are separately viewed from these secured and unsecured financial creditors in Sl. No. 5 of Para 7 of statutory Form H. Thus, it can be seen that the Code and the Regulations, read as a whole, together with the observations of expert bodies and this Court's judgment, all lead to the conclusion that the equality principle cannot be stretched to treating unequal equally, as that will destroy the very objective of the Code - to resolve stressed assets. Equitable treatment is to be accorded to each creditor depending upon the cla....