2018 (3) TMI 1928 - Tri - Insolvency and Bankruptcy

Rejection of expression of interest without assigning any reason - principles of natural justice - HELD THAT - At the time of hearing it is brought to my notice a letter issued by the State Bank of India stating that no amount is due from the resolution applicant and in the above circumstances the resolution applicant is not at all a defaulter within the meaning of Section 29A of the amended Code. The resolution applicant is hereby directed to submit all the required documents before the Resolution Professional in order to ascertain whether the resolution applicant comes under the purview of Section 29A and submit all the Resolution Plans as per Section 25(i) of the Insolvency and Bankruptcy Code. 2016 before the Committee of Creditors for its consideration. It is made clear that rejection or approval of a Resolution Plan is the right of the Committee Of Creditors and Resolution Professional cannot reject any Plan without a decision of Committee of Creditors. For further hearing if any list it on 15/03/2018.

Summary

Issues:
- Rejection of expression of interest without reason
- Consideration of applicant under Section 29A of the Insolvency and Bankruptcy Code
- Submission of required documents by the resolution applicant
- Authority of Committee of Creditors in approving or rejecting Resolution Plans

Analysis:
The judgment by the National Company Law Tribunal, Kolkata Bench, dealt with the application filed by a resolution applicant whose expression of interest was rejected without providing any reason. The Resolution Professional (RP) and Counsels representing various parties were present during the hearing. The RP based the rejection on a CIBIL report that listed one of the subsidiary companies of the resolution applicant as a willful defaulter. However, the resolution applicant contended that they were not a defaulter falling under Section 29A of the Insolvency and Bankruptcy Code. Subsequently, a letter from the State Bank of India was presented during the hearing, confirming that no dues were outstanding from the resolution applicant. The Tribunal, considering this new information, directed the resolution applicant to submit all necessary documents to the RP to determine their status under Section 29A and to present Resolution Plans to the Committee of Creditors for evaluation.

The judgment emphasized that the approval or rejection of a Resolution Plan falls within the purview of the Committee of Creditors, and the Resolution Professional does not have the authority to reject any Plan without the Committee's decision. This underscores the importance of adherence to the procedures outlined in the Insolvency and Bankruptcy Code, 2016. The Tribunal also instructed that an urgent certified copy of the order would be issued upon completion of formalities, and scheduled a further hearing for any additional matters on a specified date.

In conclusion, the judgment addressed the issues of unjustified rejection of an expression of interest, the application of Section 29A to determine the status of the resolution applicant, the necessity of submitting required documents for evaluation, and the exclusive authority of the Committee of Creditors in approving or rejecting Resolution Plans. The decision highlighted the significance of following due process and respecting the roles assigned to different parties involved in the insolvency resolution process.