2019 (8) TMI 1605 - Tri - Insolvency and Bankruptcy

Approval of Resolution Plan - HELD THAT - The RP as well as CoC may revisit and re-consider its decision and to ensure whether the mandate and direction as issued by the Hon'ble Supreme Court in the matter of Vijay Kumar Jain Vs. Standard Chartered Bank 2019 (2) TMI 97 - SUPREME COURT , are fully complied with and it would satisfy the requirement to convene the CoC meetings to enable its participants to take part effectively manner in such meetings. By considering such aspect, the RP is expected to complete the procedural formalities, preferably within two weeks, from the date of receipt of an authentic copy of this order. Further, the respondents and other objectors in the pending IAs are at liberty to file their objection(s), if any, to the proposed Resolution Plan and their objection, if any, will be dealt with the proposed Resolution Plan (for approval) along with all pending IAs by way of common hearing. Meanwhile, the parties are advised to complete their part of pleadings at the earliest. List the matter on 06.09.2019.

Issues: Compliance with directions of the Hon'ble Supreme Court regarding Resolution Plan disclosure; Rights of Suspended Management and Operational Creditors in CoC meetings; Consideration of objections by Financial Creditor; Delay tactics by objectors; Requirement for RP and CoC to revisit decisions.

Compliance with Hon'ble Supreme Court Directions:
The judgment addresses the issue of compliance with the directions of the Hon'ble Supreme Court concerning the disclosure of the Resolution Plan. The Ld. Sr. Advocate for the RP emphasized that the Resolution Plan had been provided to eligible parties, including Enercon GmBh, following the Court's decision in a specific case. However, Enercon GmBh's counsel argued that they had not received the complete Resolution Plan with all annexures despite their significant claim percentage, requesting time to review and comment on the plan. The Suspended Management's counsel highlighted the right of participation in CoC meetings, stressing the need for all relevant documents, including Resolution Plans, to be shared for effective participation. The judgment emphasized the necessity of fulfilling procedural formalities before voting on a Resolution Plan to ensure effective participation and objection filing.

Rights of Suspended Management and Operational Creditors:
The Suspended Management's counsel contended that the RP had not provided all relevant documents to them for CoC meeting agendas, hindering their effective participation and objection filing. The judgment acknowledged the importance of providing necessary documents, including Resolution Plans, to Suspended Management and Operational Creditors to enable meaningful participation in CoC meetings. It highlighted the need for procedural compliance to safeguard the interests of all stakeholders adequately.

Consideration of Financial Creditor's Objections:
The dissenting Financial Creditor's representative argued that their objections to the Resolution Plan, despite being in the minority, should not be disregarded and must be considered on merit. The judgment emphasized the significance of addressing objections, regardless of the voter percentage, to ensure a fair evaluation of the Resolution Plan for approval.

Delay Tactics and Revival of Corporate Debtor:
The successful resolution applicant's counsel accused objectors of employing dilatory tactics to delay the Resolution Plan's approval, potentially jeopardizing the corporate debtor's revival. Emphasizing the diminishing asset value of the debtor company, the counsel urged the Tribunal to expedite the approval process to prevent further loss. The judgment highlighted the importance of timely resolution to achieve the corporate debtor's revival and protect the interests of all stakeholders.

Requirement for Revisiting Decisions:
After hearing the counsels, the Tribunal suggested that the RP and CoC reassess their decisions to ensure full compliance with the Hon'ble Supreme Court's directions. It emphasized the need for revisiting decisions to facilitate effective participation in CoC meetings and compliance with legal mandates. The judgment instructed the RP to complete procedural formalities promptly and allowed objectors to file objections for common hearing along with the Resolution Plan approval process. The parties were advised to expedite their pleadings, with a scheduled listing for further proceedings.

This detailed analysis of the judgment provides insights into the various issues addressed, including compliance with legal directives, stakeholder rights, objection consideration, delay tactics, and the necessity for revisiting decisions to ensure procedural adherence and stakeholder protection.

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