2020 (11) TMI 1023 - Tri - Insolvency and Bankruptcy

Seeking approval of Resolution Plan - section 30(6) read with section 31(1) of I B Code - HELD THAT - It is observed that the applicant who is the resolution professional as well as the CoC wants to continue with the same valuer, i. e., GAA Advisory who is well aware of the facts of the case and has done valuation of the corporate debtor earlier. On the other hand, the Corporation Bank does not have faith on the CoC, the RP as well as the GAA Advisory and therefore, wants this Tribunal to appoint a fresh valuer for conducting the valuation process. The Corporation Bank holds approximately only about 7 per cent. of the share in the CoC and has time and again raised objections which has resulted in delay in the process of CIRP. As mentioned by the resolution professional, the corporate debtor has already crossed 550 days of CIRP and is incurring huge expenditure. With a view to expedite the process, as the GAA Advisors are already aware of the position of the corporate debtor, it is advisable to continue with the same valuer. Also, majority of the CoC, under its commercial wisdom has agreed for the appointment of GAA Advisory - Application allowed.

Summary

Issues:
1. Interpretation of section 60(5) of the Insolvency and Bankruptcy Code, 2016 regarding directions sought by a resolution professional.
2. Challenge to the resolution plan approved by Committee of Creditors (CoC) and appointment of fresh valuers.
3. Disagreement between Judicial Member and Technical Member on fresh valuation of assets.
4. Appeal against the order for fresh valuation leading to the constitution of a Special Bench.
5. Dispute regarding the appointment of valuers for valuation of tangible and intangible assets.
6. Impact of delays on the Corporate Insolvency Resolution Process (CIRP) and financial implications for the corporate debtor.

Analysis:
1. The judgment dealt with an interlocutory application filed by a resolution professional under section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking directions regarding a resolution plan approved by the CoC. The resolution professional was appointed for Unimark Remedies Ltd., and the application involved challenges from ICICI Bank and Corporation Bank regarding the valuation process and appointment of fresh valuers.

2. The application raised issues related to the approval of the resolution plan by the CoC, objections from Corporation Bank, and the need for fresh valuation of assets. A split verdict was delivered previously, leading to further challenges and the constitution of a Special Bench to address the disagreement between members regarding the valuation process.

3. The disagreement between the Judicial Member and Technical Member on the scope of fresh valuation, specifically regarding tangible and intangible assets, led to a directive for appointing suitable expert valuers. The order emphasized the importance of independent valuation to ensure accuracy in the process.

4. An appeal was made against the order for fresh valuation, which was disposed of by the National Company Law Appellate Tribunal. The delays caused by the appeal process and disagreements impacted the CIRP, leading to financial challenges for the corporate debtor and operational disruptions.

5. The judgment highlighted the necessity of expediting the valuation process to facilitate the resolution of the corporate debtor's insolvency. Despite objections from Corporation Bank, the majority of the CoC supported the appointment of a specific valuer, emphasizing the importance of continuity and expertise in the valuation process for efficient resolution.

6. The decision ultimately allowed the resolution professional to continue with the valuation process using the same valuer, considering the familiarity of the valuer with the case and the commercial wisdom of the CoC. This approach aimed to address the delays and financial burden on the corporate debtor, ensuring progress in the CIRP and resolution plan approval.