2018 (7) TMI 1854 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - prayer for supply of copy of Resolution Plan to the intervener so that he can properly assist this Tribunal - Held that - So far as the right of intervention by the applicant i.e. Promotor-Director of the suspend ed Board of Directors of the Corporate Debtor is concerned, it should not be denied in view of the scheme of the Code especially when the version of the applicant is that his investment in above corporate debtor by the Promoter-Director of the suspended Board of Directors is about ₹25 crores. If the member of the suspended Board of Directors have a right to participate in the meeting of Committee of Creditors, the right to be heard in the proceedings under the Code on the approval of Plan till these are concluded, should not be denied. The record of the case shows that the Resolution Professional has filed CA for challenging the preferential/under-valued transactions etc. In this application, notice has been issued to the Promotor- Director of the Company and Mr. Muneesh Malhotra, Advocate is already representing him as is evident from the order dated 22.05.2018 passed by this Tribunal. In the said order the Promotor-Director has been directed to supply addresses of the persons named in the application of the Resolution Professional. So the applicant, herein, is already participating in the proceedings pending before this Tribunal. The right to participate cannot be extended to the extent of a direction to the Resolution Professional to supply copy of the Resolution Plan. Since the applicant has been allowed to participate, he can inspect the records for the purpose of assisting this Tribunal. The application is partly allowed permitting the applicant to intervene whereas the prayer for a direction to the Resolution Professional to supply him a copy of the Resolution Plan is declined with liberty to the applicant to have inspection of the record having been allowed to intervene.

Summary

Issues:
Application for intervention in insolvency resolution process and supply of Resolution Plan copy to the intervener.

Analysis:
1. The application for intervention was filed by the Promotor-Director of the corporate debtor undergoing resolution process. The applicant sought a copy of the Resolution Plan to assist the Tribunal properly. The Resolution Professional opposed this request, citing the Committee of Creditors' approval of the Plan with 100% voting in favor.

2. The Tribunal considered the right of intervention by the applicant, emphasizing that it should not be denied under the Insolvency and Bankruptcy Code, especially when the applicant claimed a substantial investment in the corporate debtor. The applicant's right to notice of Committee of Creditors meetings was highlighted, even though they were not entitled to vote.

3. Section 24 of the Code outlines the procedure for Committee of Creditors meetings, ensuring notice to relevant parties, including members of the suspended Board of Directors. The Tribunal noted that if the suspended Board members have the right to participate in these meetings, they should also have the right to be heard in proceedings related to the approval of the Resolution Plan.

4. The Resolution Professional had filed an application challenging certain transactions, and the Promotor-Director was already participating in the proceedings. The Tribunal allowed the applicant to intervene and inspect records for assisting the Tribunal but declined the request for a copy of the Resolution Plan.

5. The Tribunal partly allowed the application, granting permission for intervention but denying the request for a copy of the Resolution Plan. The applicant was permitted to inspect records but clarified that this intervention did not grant the right to file a reply to the Resolution Professional's pending application for Plan approval.

This detailed analysis of the judgment addresses the issues of intervention in the insolvency resolution process and the supply of the Resolution Plan copy to the intervener, highlighting the rights of the applicant and the considerations under the Insolvency and Bankruptcy Code.