2019 (4) TMI 1883 - AT - Insolvency and Bankruptcy

Permission to withdraw appeal - Implementation of Resolution Plan as approved by the Committee of Creditors - no pre-condition for deposit of upfront amount mentioned in the Resolution Plan - HELD THAT - From the submission made on behalf of the Appellant, it is clear that the Appellant is not in a mood to implement the resolution plan which was approved by the Committee of Creditors and the Adjudicating Authority and because of their failure the resolution process is now again to reopen. Appellant sought permission to withdraw the appeal but instead of allowing the Appellant to withdraw the appeal we are dismissing the appeal having no merit with liberty to the Adjudicating Authority to pass appropriate order and if so required to look into the other plans and approve the same - appeal dismissed with costs.

Summary

Issues Involved:
1. Failure to implement approved resolution plan by Successful Resolution Applicant.
2. Failure to deposit upfront amount leading to reopening of resolution process.
3. Request to withdraw appeal and subsequent dismissal with directions to Adjudicating Authority.
4. Direction to Central Government to take appropriate steps against the Resolution Applicant.
5. Imposition of cost on the Appellant.

Issue 1: Failure to implement approved resolution plan by Successful Resolution Applicant
The Appellate Tribunal noted that the Successful Resolution Applicant, the Ingen Capital Group LLC., failed to implement the resolution plan approved by the Committee of Creditors and the Adjudicating Authority. Despite being given the opportunity to deposit the upfront amount, the Appellant failed to do so. Consequently, the Tribunal issued a show cause notice to the Directors of the Resolution Applicant, questioning why appropriate action should not be taken against them for not implementing the approved plan.

Issue 2: Failure to deposit upfront amount leading to reopening of resolution process
Due to the Appellant's failure to deposit the upfront amount as required by the approved resolution plan, the resolution process was at risk of reopening. The Tribunal allowed the Adjudicating Authority to consider alternative plans and take necessary actions after consulting with the Resolution Professional, the Managing Committee, and the Committee of Creditors. The Resolution Professional was also permitted to present a second plan for consideration.

Issue 3: Request to withdraw appeal and subsequent dismissal with directions to Adjudicating Authority
The Appellant sought permission to withdraw the appeal, indicating their unwillingness to implement the approved resolution plan. However, instead of allowing the withdrawal, the Tribunal dismissed the appeal for lacking merit. The Adjudicating Authority was granted the liberty to pass appropriate orders and explore other viable plans for approval.

Issue 4: Direction to Central Government to take appropriate steps against the Resolution Applicant
The Tribunal directed the Central Government, through the Ministry of Corporate Affairs, to take suitable actions against the Ingen Capital Group LLC. and its Directors for attempting to exploit the resolution process and subsequently failing to execute the proposed plan without valid reasons. If the Appellant had no presence in India, the Central Government was instructed to engage with the relevant authorities in the USA, where the Appellant Company was located.

Issue 5: Imposition of cost on the Appellant
As a consequence of the dismissal of the appeal and the directions issued, the Appellant was ordered to pay a cost of &8377; 10,00,000/- (Rupees Ten Lakhs Only) to the Committee of Creditors within thirty days. This cost imposition served as a penalty for the Appellant's actions and non-compliance with the resolution plan approval process.

This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal, the actions taken, and the directions provided in response to the Appellant's failure to adhere to the approved resolution plan.