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2019 (3) TMI 1844 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - rule 11 and any other applicable provisions of NCLT Rules, 2016 - HELD THAT - Hon'ble NCLAT has already held that resolution plan being in conformity with section 30(2) warranted approval by the Adjudicating Authority. Hon'ble NCLAT has further directed the Adjudicating Authority to approve the plan in terms of section 31 of IBC with modification that the plan is to be implemented within the period of 12 years as offered by the successful resolution applicant. In this case the resolution plan has been approved by the Committee of Creditors with requisite majority and Hon'ble NCLAT has already held that the resolution plan is in conformity with section 30(2) of the I B Code 2016 and has given the specific direction to approve the plan in terms of section 31 of IBC with modification that the plan is to be implemented within the period of 12 years as offered by the successful resolution applicant - Adjudicating Authority can scrutinise the approved Resolution Plan only under parameters of section 30(2) and section 31 of the Code and Hon'ble NCLAT has already given a finding that Resolution Plan conforms with the provision of section 30(2) of the Code. Given the Directions of Hon'ble NCLAT we as adjudicating Authority we at this moment approve the resolution plan in terms of section 31 of the I B Code 2016. Designated Registrar is directed to communicate this order immediately to the Resolution professional, Successful Resolution Applicant and the Dissenting Financial Creditor by way of e-mail and submit the compliance on 28-3-2019.
Issues:
1. Application for approval of resolution plan under sections 60(5) and 30(6) of IBC, 2016. 2. Challenge against the order passed by NCLAT regarding the application for approval of the resolution plan. 3. Jurisdiction of NCLT and NCLAT in reversing commercial decisions of dissenting financial creditors. 4. Scope of judicial scrutiny of approved resolution plan under sections 30(2) and 31(1) of IBC, 2016. Issue 1: The Resolution Professional filed MA 491/2018 seeking approval of the resolution plan under sections 60(5) and 30(6) of IBC, 2016. The application was dismissed by the Tribunal, imposing a cost on the Resolution Professional. The matter was challenged before NCLAT, which set aside the impugned order and directed the Adjudicating Authority to approve the plan in accordance with section 31 of the IBC, with a modification for implementation within 12 years as offered by the successful resolution applicant. Issue 2: The Resolution Professional submitted the NCLAT's order to the Tribunal, which heard arguments from the Counsel representing the Resolution Professional and the Dissenting Financial Creditor. The Counsel for the Dissenting Financial Creditor requested time to file an appeal against the NCLAT's order. The Supreme Court's ruling in K. Sashidhar v. Indian Overseas Bank emphasized the limited jurisdiction of NCLT and NCLAT, stating that they cannot reverse the commercial decisions of dissenting financial creditors unless certain specified thresholds are met. Issue 3: The Supreme Court's decision in K. Sashidhar case highlighted that the judicial review of an approved resolution plan is confined to sections 30(2) and 31(1) of the IBC, 2016. The Court emphasized that the legislative intent does not allow the reversal of commercial decisions of the Committee of Creditors or dissenting financial creditors by the resolution professional, NCLT, or NCLAT. The scrutiny of a resolution plan must adhere to the specified voting thresholds to ensure a credible plan for successful corporate debtor revival. Issue 4: Considering the NCLAT's direction and the Supreme Court's ruling, the Tribunal approved the resolution plan, noting that it had been approved by the Committee of Creditors with the required majority and was in conformity with section 30(2) of the IBC, 2016. The Tribunal's approval was based on the limited scope of judicial review under sections 30(2) and 31(1) of the Code, as outlined by the Supreme Court. The Designated Registrar was instructed to communicate the order to relevant parties promptly.
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