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2019 (5) TMI 1830 - Tri - Insolvency and BankruptcyRejection of the Resolution plan - Section 60(5) read with other Provisions of Insolvency and Bankruptcy Code, 2016 and Rules made thereafter - HELD THAT - As per record, it is undisputed position in the matter that the Resolution Professional did not consider the resolution plan of the Applicant for such reason that resolution plan was filed by resolution applicant after expiry of EOI and at a very belated stage i.e. on 268th day. Hence, the main reason for not considering of the resolution plan of the applicant is that there was no time left to entertain any resolution plan and to consider at this stage, as the Resolution Professional has conducted the entire process as per timeline defined under IBC and so as he was duty bound to adhere to such timeline thus he refused to consider such resolution plan. The Resolution Professional and the COC should make all possible efforts towards Insolvency Resolution of a Corporate Debtor company and its liquidation can only be lost resorts. Further, the time spent in the present proceedings and to be consumed in further consideration by the COC (eg. 30 days) is excluded and exempted from the period of the CIRP. Application disposed off.
Issues Involved:
1. Rejection of the Resolution Plan by the Resolution Professional. 2. Timeliness and adherence to the Insolvency and Bankruptcy Code (IBC) timelines. 3. Impact on employees and stakeholders. 4. Legal precedents and interpretation of the IBC provisions. 5. Consideration of the Resolution Plan by the Committee of Creditors (CoC). Issue-wise Detailed Analysis: 1. Rejection of the Resolution Plan by the Resolution Professional: The Resolution Applicant filed an application under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, against the rejection of their Resolution Plan by the Resolution Professional. The Resolution Applicant argued that their plan was rejected without being given an opportunity, potentially affecting the livelihood of around 200 employees. 2. Timeliness and adherence to the Insolvency and Bankruptcy Code (IBC) timelines: The Resolution Professional contended that the process of inviting resolution plans, as per regulations 36A (1) of the IBC, was followed meticulously. The last dates for submission of Expression of Interest (EOI) and Resolution Plans were clearly defined and adhered to. The Resolution Applicant failed to submit their EOI or Resolution Plan within the stipulated timelines, leading to the rejection of their plan. The plan was submitted on the 268th day, well beyond the prescribed deadlines. 3. Impact on employees and stakeholders: The Applicant emphasized the importance of considering the Resolution Plan to save the company from liquidation, which would affect the employees' livelihoods. The Tribunal acknowledged the significance of this aspect, noting that the primary objective of the IBC is to ensure the revival of the Corporate Debtor rather than its liquidation. The Tribunal highlighted that the proposed Resolution Plan included a provision of ?17 Crores for the company's revival, compared to the liquidation value of ?13 Crores, making it a favorable option for consideration. 4. Legal precedents and interpretation of the IBC provisions: The Tribunal referred to several legal precedents, including the Hon'ble Supreme Court's decision in Arcelormittal India Private Limited vs. Satish Kumar Gupta & Ors, which emphasized the importance of balancing timely completion of the Corporate Insolvency Resolution Process (CIRP) with the need to avoid corporate death and displacement of employees. The Tribunal also cited the NCLT, Mumbai Bench's decision in Edelweiss Asset Reconstruction Company Ltd. vs. Reid Taylor (India) Ltd., which underscored the necessity of considering any opportunity for the company's revival, even if it meant extending the timelines. 5. Consideration of the Resolution Plan by the Committee of Creditors (CoC): The Tribunal directed the Resolution Professional to examine and scrutinize the Resolution Plan submitted by the Resolution Applicant and present it before the CoC for further consideration. The CoC was instructed to take a conscious decision as per the provisions of the IBC within 30 days from the receipt of the order. The Tribunal excluded the time spent in the present proceedings and the additional 30 days for the CoC's consideration from the CIRP period. Conclusion: The application was allowed, directing the Resolution Professional to consider the Resolution Plan and present it to the CoC. The CoC was given 30 days to make a decision, with this time excluded from the CIRP period. The Tribunal emphasized the importance of making efforts towards the insolvency resolution of the Corporate Debtor and highlighted the impact on the employees and the company's potential for revival.
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