TaxTMI 
TaxTMI 
2026 (3) TMI 755
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....y<br>Rajesh Business and Leisure Hotels Pvt. Ltd. Versus Rajesh Patel, Harish Patel, Priyal Patel, Rajesh Hospitality Pvt. Ltd., Rajesh Lifespaces Pvt. Ltd., Rajesh Investments, Sankalp Recreation Pvt. Ltd., Committee of Creditors of Rajesh Business and Leisure Hotels Pvt. Ltd., Rare Asset Reconstruction Ltd. and Check-Inn Hotels Pvt. Ltd. JUSTICE RAKESH KUMAR JAIN MEMBER (JUDICIAL) AND MR. INDEVAR PANDEY MEMBER (TECHNICAL) For the Appellant: Mr. Arun Kathpalia, Sr. Advocate, Ms. Shweta Dubey and Ms. Kanishka Prasad, Advocates. For the Respondents: Mr. Krishnendu Datta, Sr. Advocate, Mr. Chitranshul A. Sinha, Mr. Sagar Bansal, Ms. Ayushi Bansal, Mr. Shivam Shorewala and Ms. Rakshita Bhargava, Advocates for R- 9, 10. Mr. Abhirup Das Gupta, Mr. Ishaan Duggal and Ms. Ruchi Goyal, Advocates for R-8/CoC. Mr. Rohit Gupta, Ms. Aakashi Lodha and Ms. Nishtha Jindal, Advocates for R-1 to R-6. Mr. Kartikey Bhatt and Mr. Akshay Luthra, Advocates for R-7. JUDGMENT INDEVAR PANDEY, MEMBER (T) The present set of appeals arise from the order dated 10.07.2024 passed by the National Company Law Tribunal, Mumbai Bench-II (Adjudicating Authority), in I.A. No. 1085 of 2023; I.....
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....n Professional on behalf of the CD. All three appeals arise from the common impugned order dated 10.07.2024 passed by the Adjudicating Authority (NCLT, Mumbai Bench-II). For convenience of reference, we treat Company Appeal (AT) (Insolvency) No. 1670-1672 of 2024, filed by the Committee of Creditors, as the lead matter as all three seek the same relief viz setting aside of the impugned order and approval of Resolution plan approved by the CoC. Brief facts of the case (Comp. App. (AT) (Ins.) No. 1780 of 2024): 4. The brief facts of the case are as follows: i. ICICI Bank Ltd. (Financial Creditor) filed Company Petition (IB) No. 1171/MB/2021 before the Adjudicating Authority under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Rajesh Business and Leisure Hotels Pvt. Ltd. (Corporate Debtor). The petition for initiating Corporate Insolvency Resolution Process (CIRP) was admitted on 20.04.2022, and Mr. Rohit Mehra was appointed as Interim Resolution Professional (IRP). He was subsequently confirmed as the Resolution Professional (RP) in the 1st CoC meeting held on 20.05.2022. ii. The Committee of Creditors (CoC) of the Corporate Debtor was constitut....
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....e. xiii. The RP on 15.03.2023, informed Respondent No. 2 (Sankalp Recreation Pvt. Ltd.) that its plan had not been approved, and refund of the bid bond deposit of Rs.5 crores would be processed. On 18.03.2023, the bid bond deposit of Rs.5 crores was refunded and accepted by Respondent No. 2. xiv. On 12.04.2023, Respondent No. 2/ Sankalp Recreation Pvt. Ltd. filed I.A. No. 1466 of 2023 before NCLT objecting to approval of the Resolution Plan. xv. Respondents No. 3 to 8 (Rajesh Patel & Ors. - suspended board/promoters) also filed I.A. No. 1478 of 2023 on 18.04.2023 objecting to the Resolution Plan. xvi. After hearing all sides, the NCLT by its Impugned Order dated 10.07.2024 rejected I.A. No. 1085 of 2023 and partly allowed I.A. Nos. 1466 and 1478. The Tribunal held that: a) The Resolution Plan did not meet requirements of Section 30(2) of the Code read with Regulations 36A and 39 of the CIRP Regulations. b) There was material irregularity in non-furnishing of the Resolution Plan to the erstwhile directors. xvii. Accordingly, these sets of appeals have been filed by the Committee of Creditors; the selected Resolution Appl....
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.....10 which categorically stipulated that no change of Lead Member would be permitted post submission of EOI except with CoC's approval. Thereafter, on 18.07.2022, in the 4th CoC meeting, the RP obtained approval for publication of revised Form G and extension of EOI timelines. Pursuant thereto, on 22.07.2022, the revised Form G was issued fixing 02.08.2022 as the last date for submission of EOI and 16.09.2022 as the last date for submission of resolution plans. 9. Learned Counsel further submits that on 12.08.2022, the provisional list of Prospective Resolution Applicants (PRA) was published which included Rare ARC at Serial No. 15 and Shree Naman Developers Pvt. Ltd. at Serial No. 22. On the same date, in the 5th CoC meeting, the issuance of RFRP and Evaluation Matrix was approved, and on 17.08.2022, the RP duly issued the same. Thereafter, on 27.08.2022, the final list of PRAs was published containing Rare ARC at Serial No. 15 and Shree Naman Developers Pvt. Ltd. at Serial No. 21. 10. Learned Sr. Counsel points out that on 12.09.2022, in the 6th CoC meeting, timelines for submission of plans were extended till 17.10.2022. On 11.10.2022, the Adjudicating Authority further ext....
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....the strategic investor. Consequently, in its revised plan dated 17.02.2023, Rare ARC identified Check-Inn Hotels Pvt. Ltd., a wholly owned subsidiary of Shree Naman Developers (which was itself in the final list of PRAs). Check-Inn was introduced as a strategic investor to carry out functions that an ARC cannot perform under law. The consortium agreement expressly recorded Rare ARC as Lead Member and Check-Inn as Strategic Investor. 16. Learned Sr. Counsel submits that this plan was duly approved by the CoC with 100% votes in its 14th meeting, in exercise of its commercial wisdom, consistent with Clause 15(1)(xi) of RFRP and supported by precedents such as Kalpraj Dharamshi v. Kotak Investment Advisories Ltd. (2021) 10 SCC 401 and Arcelor Mittal India Pvt. Ltd. v. Satish Kumar Gupta (2019) 2 SCC 1. 17. Learned Sr. Counsel further submits that Clause 15(1)(xi) of RFRP specifically permits PRAs to combine their plans and form a consortium. Therefore, the consortium of Rare ARC with Check-Inn Hotels was validly constituted and approved, and there was no violation of Regulation 36A or 39(1B) of the CIRP Regulations. 18. Learned Sr. Counsel stresses that the final list of PRAs ....
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....volves acquisition of stressed assets, and therefore, the mere fact of such acquisition cannot render the Appellant ineligible. The Hon'ble Supreme Court, in ArcelorMittal India Pvt. Ltd. v. Satish Kumar Gupta (2019) 2 SCC 1, has clarified that eligibility under Section 29A must be tested strictly against the statutory parameters and cannot be presumed. The Appellant meets all statutory requirements, and the conclusion of ineligibility is not only erroneous but contrary to law. 24. Ld. Sr. Counsel further submitted that the finding of the Learned Adjudicating Authority alleging collusion between the Appellant and the erstwhile promoters of the Corporate Debtor is wholly unfounded. No material evidence was placed on record to substantiate such an allegation. The Appellant has acted strictly in accordance with law and has no relationship whatsoever with the promoters of Corporate Debtor. The Appellant's resolution plan was framed after due diligence and in compliance with all regulatory requirements. It is a settled principle, as reiterated by the Hon'ble Supreme Court in Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17, that resolution applicants must be encouraged in or....
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....vention of settled jurisprudence, thereby vitiating the impugned order. 28. The Appellant's counsel submits that the Learned Adjudicating Authority wrongly concluded that the Appellant's resolution plan lacked feasibility and viability. This conclusion disregards the fact that the plan was proposed by a consortium of Rare Asset Reconstruction Limited and Check- Inn Hotels Pvt. Ltd., both entities with proven financial capability and experience in the hospitality and asset reconstruction sectors. The plan was supported by performance guarantees, carefully structured financing, and fully in compliance with regulatory requirements. The CoC, consisting of leading financial institutions such as ICICI Bank, Union Bank, and Bank of Baroda, after thorough scrutiny, expressed satisfaction as to the feasibility and viability of the plan. The Adjudicating Authority therefore had no jurisdiction to substitute its own assessment for that of the CoC. 29. Ld. Sr. Counsel argued that the finding that the Appellant's resolution plan contravened existing law under Section 30(2)(e) of the IBC is wholly baseless. The plan was framed in strict conformity with applicable legal provisions and was c....
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....d both RARE ARC and Shree Naman Developers. With regard to Regulation 39(1B), the Counsel submits that the challenge mechanism was duly held on 09.02.2023 in the 13th CoC meeting, which ran through 13 rounds of bidding until only one Resolution Applicant remained. Thus, the process was conducted in full compliance with the regulation. 33. The Learned Sr. Counsel for the Appellant further submits, on the issue of alleged "ineligibility" of RARE ARC under Section 29A, that such a finding is erroneous in law. RARE ARC is a regulated Asset Reconstruction Company registered under Section 3 of the SARFAESI Act, 2002, and is expressly permitted under the Code and RBI Guidelines to participate in the CIRP, either independently or in consortium. It is pointed out that Section 29A eligibility checks and CIBIL verifications were carried out at the PRA stage, and documents annexed at Annexure A-12 of the Appeal confirm that neither RARE ARC nor its consortium partner is disqualified. The Counsel submits that the Adjudicating Authority disregarded these statutory checks and presumed ineligibility without evidence, rendering the finding perverse in law. 34. The Learned Sr. Counsel for the ....
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....and prolongation of the CIRP will only deplete the value of assets, escalate CIRP costs, and jeopardise the revival prospects of the Corporate Debtor. The Counsel submits that the CIRP has been conducted in a transparent, lawful, and time-bound manner, in strict conformity with the Code and Regulations, and that no irregularity has occurred warranting rejection of the Resolution Plan. 38. In light of the above submissions, the Learned Counsel for the Appellant most respectfully prays that this Hon'ble Tribunal may be pleased to: a) set aside the impugned order dated 10.07.2024 passed by the Learned Adjudicating Authority, NCLT Mumbai Bench-II in I.A. No. 1085 of 2023, I.A. No. 1466 of 2023, and I.A. No. 1478 of 2023; b) approve the Resolution Plan submitted by RARE Asset Reconstruction Limited in consortium with Check-Inn Hotels Pvt. Ltd., as approved by the Committee of Creditors with 100% voting share; and c) pass such other order(s) as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case. Submissions of the Respondent No. 2 / Sankalp Recreation Pvt. Ltd. 39. Sh. Kartikey Bhatt, Learned counsel for Respondent....
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....., RARE Asset Reconstruction Ltd., and Shree Naman Developers Pvt. Ltd. Importantly, RARE submitted its plan individually and not in consortium, while Check Inn Hotels Pvt. Ltd. was never part of the Final List of PRAs. 43. Ld. Counsel points out that six plans were eventually received, including those of RARE and Sankalp-GEPL (Respondent No. 2 consortium). During the online challenge process held on 09.02.2023, Sankalp-GEPL emerged as the highest bidder with NPV of Rs. 490 Crores, later revising its plan on 17.02.2023 to Rs. 530 Crores, supported by financial documents. Respondent No. 2, vide emails dated 27.02.2023 and 16.03.2023, further offered to make upfront payment of Rs. 490 Crores within 90 days and then within 60 days, thereby strengthening its financial proposal. 44. Learned counsel submits that belatedly, RARE submitted a revised plan dated 17.02.2023 in consortium with Check Inn for Rs. 479.14 Crores, thereby giving Check Inn a backdoor entry despite its exclusion from the Final List. On 24.02.2023, in the 14th CoC meeting, the plan was considered along with the proposal for induction of Check Inn. Thereafter, the CoC approved the RARE-Check Inn plan on 10.03.202....
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....hat its plan had been lawfully rejected. This was only because the RP failed to update R2 about the actual voting results. In fact, contemporaneously Respondent No. 2 offered to enhance its offer through emails dated 27.02.2023 and 16.03.2023. To further establish bona fides, Respondent No. 2 has annexed a fresh demand draft towards the bid bond with its Reply. 50. Lastly, Learned Counsel submits that the CoC's reliance on past instances where similar irregularities occurred is legally unsustainable. Past illegality cannot validate subsequent illegality. The principle of estoppel cannot operate against law. Summing up he argued that the order of Adjudicating Authority is legally valid and prayed for dismissal of appeals. Analysis and finding 51. At the outset, we note that the objections of the suspended directors and related parties, who were arrayed as Respondents 3 to 8, have been withdrawn. On 08.09.2025, their counsel, Mr. Rohit Gupta, made a statement at the Bar that he had instructions from his clients to the effect that the appeal filed by the CoC may be allowed, and no further objection would be pressed. The relevant extract of order dated 08.09.2025 is given belo....
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....il in para. IO hereinabove, the legality of Check-Inn joining as a resolution applicant when its name did not appear in the final list of Prospective Resolution Applicants. It is further reiterated that Regulation 36A prescribes each step in the process to be taken by the Resolution Professional to ensure adherence to timelines, provide an opportunity to all resolution applicants who submitted the expression of interest to raise objection to the inclusion or exclusion of a provisional resolution applicant in the provisional list, etc. The Resolution Professional is also required to conduct due diligence of prospective resolution applicants based on the material made available to satisfy that the prospective resolution applicant complies with the applicable provisions of Section 29A and other requirements specified in IEOI. The final list of prospective resolution applicants is to be prepared after following all the above processes. Further, Regulation 39 of CIRP Regulations specifies that the CoC shall not consider any resolution plan received from a person who does not appear in the final list of prospective resolution applicants or does not comply with the provisions of Section 3....
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....023 and I.A No.1478/2023 objecting to the approval of the resolution plan are partly allowed to the extent indicated in the foregoing discussion. Liberty is granted to RP /CoC to re-run the process strictly in accordance with the Code and CIRP Regulations and in that event, an extension of the CIRP period of 4 months shall be deemed to have been hereby granted for the purpose. The CoC, however, shall be at liberty to take a contrary call if it so desires in its wisdom." 54. The Adjudicating Authority in its finding has held that (a) the Resolution Plan does not comply with Provisions of Section 30 (2) of the Code r/w Regulations 36A and 39 of the CIRP Regulations on account of its contravention of provisions of law and non-conformity to the requirements laid down by IBBI; and (b) there has been material irregularity in non- furnishing the copy of the resolution plan to the Erstwhile Directors. At the same time the Adjudicating Authority had admitted that a copy of the resolution plan which was discussed in the CoC meeting held on 24.02.2023 and thereafter was put to vote without another meeting was furnished to the Erstwhile Directors only on 27.02.2023. The Adjudicatin....
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.... an appeal has been preferred under section 61 or section 62 or such an appeal is not time barred under any provision of law for the time being in force; or (iii) where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a resolution plan;] (c) provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; (d) the implementation and supervision of the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force; (f) conforms to such other requirements as may be specified by the Board. ^4[Explanation.-- For the purposes of clause (e), if any approval of shareholders is required under the Companies Act, 2013 or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law]" 56. The Adjudicating Authority has not identified any specific clause of the Section 30(2) which has been violated in the resolution plan submitted by the Rare ARC, exce....
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....e committee in accordance with clause (h) of sub-section (2) of section 25; (b) state the ineligibility norms under section 29A to the extent applicable for prospective resolution applicants; (c) provide such basic information about the corporate debtor as may be required by a prospective resolution applicant for expression of interest 9[;] (d) not require payment of any fee or any non-refundable deposit for submission of expression of ^10[interest; and] ^11[(e) provide details of the corporate debtor's registration status as a micro, small, or medium enterprise in accordance with the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006).] ^11[Provided that where the corporate debtor has any real estate project, the committee, for an association or group of allottees in such real estate project, representing not less than ten per cent. or one hundred creditors out of the total number of creditors in a class, whichever is lower, may relax the following: (a) eligibility criteria for submission of expression of interest provided in clause (a) above; and (b) conditions regarding the refundable deposit.] ....
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....plicable provisions of section 29A, and (c) other requirements, as specified in the invitation for expression of interest. (9) The resolution professional may seek any clarification or additional information or document from the prospective resolution applicant for conducting due diligence under sub- regulation (8). (10) The resolution professional shall issue a provisional list of eligible prospective resolution applicants within ten days of the last date for submission of expression of interest to the committee and to all prospective resolution applicants who submitted the expression of interest. (11) Any objection to inclusion or exclusion of a prospective resolution applicant in the provisional list referred to in sub- regulation (10) may be made with supporting documents within five days from the date of issue of the provisional list. (12) On considering the objections received under sub- regulation (11), the resolution professional shall issue the final list of prospective resolution applicants within ten days of the last date for receipt of objections, to the committee.]" 58. We note from the records that RP after following the....
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....ot sufficient time to put their objections if any on record. The finding of the Adjudicating Authority that the circulation was belated is not borne by facts. We therefore hold that there is no material irregularity on this ground. 62. We further note from the records that the RP had furnished Section 29A eligibility reports for all the entities involved, including Naman and Check-Inn, and got the requisite checks done through an independent agency. There is no evidence that any material information was concealed or withheld from stakeholders in a manner that would constitute a material irregularity. 63. We now take up the issue of compliance of resolution plan of the Rare ARC with regulation 39 of the CIRP regulations. The significance of this issue lies in the scheme of Regulation 39(1B) of the CIRP Regulations, which mandates that, only such persons as are included in the final list of Prospective Resolution Applicants, may submit a resolution plan for consideration. The underlying object of this regulation is to ensure that every participant in the plan submission stage has undergone the necessary scrutiny for eligibility under Section 29A of the Code, and that no unvette....
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....y, the CoC, after considering all plans, approved the RARE-Check-Inn plan unanimously with 100% votes, whereafter the Letter of Intent was issued and the Performance Bank Guarantee was furnished. According to the Appellant, this chain of events clearly shows that the induction of Check-Inn was neither surreptitious nor hurried, but a transparent step taken within the framework of the RFRP, and duly approved by the CoC in exercise of its commercial wisdom. It is therefore argued that the NCLT erred in treating the induction as a violation of Regulation 39(1B). 66. Appellant further submitted that the resolution plan was submitted by Rare ARC as PRA and Check-Inn was shown as strategic investor. The role of strategic investor was projected from the first resolution plan itself in view of RBI's Master Guidelines. It is a necessary requirement for ARC to bring in a equity investor as equity investment in CD was not permitted as per SARFAESI Act and RBI Master Guidelines for ARCs. 67. On the contrary, Sankalp, the unsuccessful resolution applicant, has advanced the contention that the prohibition under Regulation 39(1B) is absolute and mandatory, leaving no scope for exceptions. S....
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....lan submitted by the Resolution Applicant or a Consortium involves setting up or acquisition and control of a special purpose vehicle, then the 29A Affidavit of such Resolution Applicant / members of the consortium/persons acting jointly or in concert with the Resolution Applicant shall specify that such special purpose vehicle shall also be compliant with Section 29A of the Code." (Emphasis supplied) 69. Here we note that Sec 29 A affidavit was duly submitted by the Check- INN hotels prior to it being included as the strategic investor. 70. In the first Resolution Plan submitted by Rare ARC on 25.11.2022 the PRA had indicated that he would bring in a strategic investor for implementing the resolution plan. Rare ARC being an Asset Reconstruction Company could not take up the equity portion to be brought in the resolution plan under the RBI guidelines. Accordingly, they had proposed bringing in a strategic investor for implementation of a resolution plan. The relevant paras of the resolution plan relating to induction of strategic investor are extracted below: "2. Compliance of plan various provisions Regulation 37 (c) the substantial acquisition of shares of....
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....n of the communication is extracted below: S. No. Relevant clause Issues 9. Section 2- Section 30 (2) (c) of the Code RA to identify the Investors. Please note that the investors should be Section 29A compliant. 73. In compliance with the comments of RP, the PRA Rare ARC filed a revised resolution plan on 17.02.2023 identifying Check-Inn Hotels Pvt. Ltd. as the strategic investor. The relevant part of the revised plan is reproduced hereunder: 74. It can be seen here from the first page of the resolution plan that the plan has been submitted by Rare Asset Reconstruction Ltd. along with Check-Inn Hotels Pvt. Ltd., subsidiary/ SPV of Sh Naman Group, the strategic investor. So, it is clear from the very outset that Check-Inn was brought in as strategic investor. 75. In para 1.9 of the resolution plan Rare ARC clearly stated that being an ARC it is only permitted to acquired debt and further clarified that it does not plan to acquire equity shares of the CD under the resolution plan. The relevant extract of para 1.9 is given below: "1.9. Prior experience of the Resolution Applicant in turnaround/revival of the stressed assets: The Resolution ....
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....has net worth of Rs. 1,176 crores and further is making upfront payment to the financial and other creditors delinking hotel with any financial risk. The Strategic Investor shall infuse an unsecured loan through debt or any other instrument of around Rs. 470 crore by itself or through SPV or through Resolution applicant and / or any group entities and/or associates for the purpose of making Upfront Payment to the Creditors in terms of this Resolution Plan. The Strategic Investor has also provided balance confirmation certificate from its banker, i.e. HDFC Bank having deposit of Rs. 498 crore in the bank account of the Strategic Investor and as attached the same as Anexure-1 to this Resolution Plan. The Resolution Applicant/ the Strategic Investor may, however, directly acquire the debt of the financial creditors, at the discretion of the Secured Financial Creditors in such a manner, as may be mutually agreed, without affecting their rights against the personal and corporate guarantors and third-party securities or as may be allowed under provisions of law." 78. It is absolutely clear from the extracts of the resolution plan that Check-Inn Hotels was brought in as a strategic inv....
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.... (c) an undertaking by the prospective resolution applicant that every information and records provided in connection with or in the resolution plan is true and correct and discovery of false information and record at any time will render the applicant ineligible to continue in the corporate insolvency resolution process, forfeit any refundable deposit, and attract penal action under the Code. (1A) The resolution professional may, if envisaged in the request for resolution plan- (a) allow modification of the resolution plan received under sub-regulation (1), but not more than once; or (b) use a challenge mechanism to enable resolution applicants to improve their plans. (1B) The committee shall not consider any resolution plan- (a) received after the time as specified by the committee under regulation 36B; or (b) received from a person who does not appear in the final list of prospective resolution applicants; or (c) does not comply with the provisions of sub-section (2) of section 30 and sub-regulation (1).]] ******** (3) The committee shall- (a) evaluate the resolution plans received under su....
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.... conclusion on this aspect is incorrect. 84. While we agree that Regulation 39(1B) is mandatory, we find that the NCLT did not give due weight to the fact that the PRA had initiated the process of identifying the strategic investor as early as December 2022, that the revised plan was filed on by RARE ARC which was a PRA 17.02.2023, and not by the Strategic Investor Check-Inn. The matter was deliberated in the 14th CoC meeting on 24.02.2023, well before the voting concluded on 10.03.2023. The presence of eligibility verification reports on record also negates the suggestion that Check-Inn's induction was unexamined or surreptitious. The finding of the NCLT, therefore, rests on a narrow view of timing without appreciating the broader factual context. 85. We also have a look at the clause 15.1(xi) of the RFRP document which is extracted below: "15.1- ln the event the Applicant is a Consortium, it will be required to comply with the following requirements: * * (xi) Notwithstanding the above, the Committee of Creditors may permit change in composition of the Consortium (which may or may not include a PRA who had submitted an EOI) or permit PRAs ....
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.... and in the plan Check-Inn Hotels was shown as Strategic Investor. The plan was not submitted by Check-Inn Hotels, but by Rare ARC which has come out very clearly in the resolution plan. At the same time Naman was a PRA and Check-INN was its wholly owned subsidiary. Two PRAs were permitted to form a consortium, nomination of a subsidiary of the one of the eligible bidders is a standard and approved practice which has been upheld by courts. The consortium was formed with the view to implement the resolution plan as an Asset Reconstruction Company cannot participate in the equity of CD as provided in the master circular of the RBI. The consortium was created as an entity for implementation of resolution plan to meet the requirements under SARFESI Act which is the regulating act for ARCs and RBI is the regulator. This structure is compliant with both SARFESI and IBC. 89. We also note the judgement of the Hon'ble Supreme Court in 'Kalpraj Dharamshi v. Kotak Investment Advisors Ltd. (2021) 10 SCC 401', Hon'ble SC recognised that consortium arrangements and subsequent inclusion of entities are permissible so long as they are in line with the process documents and approved by the CoC. ....
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....solution applicant concerned to challenge the Resolution Professional's rejection? It is settled law that a statute is designed to be workable, and the interpretation thereof should be designed to make it so workable..... 79. Given the timeline referred to above, and given the fact that a resolution applicant has no vested right that his resolution plan be considered, it is clear that no challenge can be preferred to the adjudicating authority at this stage. A writ petition under Article 226 filed before a High Court would also be turned down on the ground that no right, much less a fundamental right, is affected at this stage. This is also made clear by the first proviso to Section 30(4), whereby a Resolution Professional may only invite fresh resolution plans if no other resolution plan has passed muster." 92. In the present case, Check-Inn Hotels cannot be treated as an outsider when its parent, Shree Naman Developers, was in the final list of PRAs. Treating them as a single economic group aligns with the approach adopted by the Supreme Court in 'Titagarh Firema Adler S.P.A. v. Nagpur Metro Rail Corporation Ltd. (2017) 7 SCC 486', where entities within a group we....
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....argued that in the challenge process conducted on 09.02.2023, its resolution plan had emerged as H1 with a net present value of Rs.490 crores, which was higher than the RARE-Check-Inn plan that stood at Rs.479 crores. It is submitted that the very object of the Code is value maximisation and that once Sankalp was identified as H1, the CoC was bound to accept its plan in preference to any other. According to Sankalp, the subsequent approval of the RARE-Check-Inn plan, notwithstanding the higher valuation of its own, constitutes a violation of the Code's objective of maximisation of value of assets. It has further been argued that the inclusion of Check-Inn Hotels in the consortium was irregular, that the revised plan of RARE-Check-Inn was circulated belatedly, and that adequate opportunity was not given to all stakeholders to consider it. These, according to Sankalp, constitute material irregularities in the conduct of the CIRP and justify interference by this Appellate Tribunal under Section 61(3). 95. The Appellant, representing the CoC, has disputed these contentions. It is argued that while Sankalp's plan may have shown a higher net present value, the CoC is not obliged to ac....
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....e voting is clearly in line with scores of various resolution applicants in the evaluation matrix of the resolution plan. 99. We also note that Sankalp have sent a letter on 27.02.2023 to the RP by email wherein they had committed to make total payment of Rs. 490 crores within 90 days from receipt of approval from NCLT. 100. RP in his reply on the same date wrote to the Members of the CoC and Sankalp and stated that as per Regulation 39 (1A) (a) of CIRP Regulations, a resolution plan cannot be modified more than once. Therefore, a modification in Resolution Plan post the submission of the revised plan on 17.02.2023 may not be permissible. The extract of the body of the email is given below: "Dear Members of Coc, Please find attached the letter received from the Consortium of Sankalp Recreation Pvt. Ltd. with Globe Ecologistics Pvt. Ltd. In the enclosed letter, Sankalp has modified its last financial offer provided in the challenge process. Please note that this modified offer has also not been made a part of the revised resolution plan submitted on 17.02.2023. Your attention is drawn to the rules of the challenge process held on 09.02.2023,....