2018 (12) TMI 1924 - Tri - Insolvency and Bankruptcy

Allocation of voting share to the CoC, as per the agreement - HELD THAT - The RP could not have allocated voting share to the Capri Global Capital Limited by taking total loan amount of all the three corporate debtors whereas only one of them is involved in the present proceedings. The CoC would tilt in favour of Capri Global as against the voting share of Home Buyers if the whole loan amount of three companies is clubbed. List for further consideration on 15.01.2019.

Summary

Issues: Allocation of voting share to Creditors' Committee, Fairness in decision-making by Resolution Professional

The judgment by the National Company Law Tribunal, New Delhi Principal Bench, addressed the issue of allocation of voting share to the Committee of Creditors (CoC) in a case involving multiple corporate debtors. The Tribunal emphasized the importance of acting in accordance with the agreement and allocating the voting share to the CoC based on the specific corporate debtor involved in the proceedings. The Tribunal highlighted the potential imbalance in the CoC if the voting share is allocated based on the total loan amount of all three corporate debtors, especially when only one of them is directly involved in the present case. The Tribunal stressed the need for fairness and impartiality in decision-making by the Resolution Professional (RP), pointing out that the RP should not favor any particular creditor, such as Capri Global Capital Limited, over others like Home Buyers. The judgment underscored the RP's responsibility to act fairly and dispassionately, particularly considering the pending matters involving other corporate debtors. The Tribunal directed the RP to ensure fair allocation of voting share and called for a reply from any other interested party, scheduling further consideration of the case for a future date.

This judgment serves as a reminder of the RP's duty to act objectively and in the best interests of all stakeholders, avoiding any potential biases or unfair preferences in the allocation of voting rights within the CoC. It highlights the need for transparency and adherence to the relevant agreements and legal provisions to maintain the integrity of the insolvency resolution process. The Tribunal's decision underscores the significance of upholding principles of fairness and equity in insolvency proceedings, emphasizing the importance of maintaining a level playing field for all creditors involved.