2020 (1) TMI 1386 - AT - Insolvency and Bankruptcy

Arrangement/agreement with the 'Corporate Debtor' for purchase of a part of the Gala (Project) - Sub-section (3) of section 61 of the 'I B Code' - HELD THAT - In both the appeals as the Appellant(s) have failed to make out any of the grounds as mentioned in Section 61(3), we are not inclined to interfere with the plan approved by the Adjudicating Authority. This apart, in absence of any privity of contract between the Appellant(s) and the 'Corporate Debtor', no relief can be granted. Appeal dismissed.

Summary

Issues:
Challenge to order approving resolution plan under I&B Code on grounds of contravention of law, irregularity in exercise of powers by resolution professional, debts to operational creditors not provided for, insolvency resolution process costs not prioritized, non-compliance with criteria specified by the Board.

Analysis:
The Appellant(s) contended that they had an arrangement/agreement with the 'Corporate Debtor' for the purchase of a part of the Gala (Project) which was rejected by the 'Resolution Professional' who did not accept them as 'Secured Financial Creditor'. The appeals challenged the order passed by the Adjudicating Authority approving the 'Resolution Plan' with 85.89% voting share of the 'Committee of Creditors'.

Sub-section (3) of section 61 of the 'I&B Code' outlines the grounds on which a 'Resolution Plan' can be challenged, including contravention of laws, irregular exercise of powers by the resolution professional, failure to provide for debts owed to operational creditors, non-prioritization of insolvency resolution process costs, and non-compliance with criteria specified by the Board.

The Tribunal noted that the Appellant(s) failed to establish any of the grounds specified in Section 61(3) to challenge the approved resolution plan. Consequently, the Tribunal declined to interfere with the plan approved by the Adjudicating Authority. Additionally, since there was no privity of contract between the Appellant(s) and the 'Corporate Debtor', the Tribunal held that no relief could be granted in this case.

Ultimately, the Tribunal dismissed both appeals due to the lack of merit, emphasizing that no costs were to be awarded. The decision highlights the importance of meeting the specified grounds for challenging a resolution plan under the I&B Code and the significance of contractual relationships in insolvency proceedings.