2021 (5) TMI 1017 - AT - Insolvency and Bankruptcy

Maintainability of appeal - material irregularity in exercise of powers by the Resolution Professional during the Corporate Insolvency Resolution Period - Section 61(3)(ii) of IBC - HELD THAT - Learned Counsel for the Appellants has failed to point out that there is any material irregularity in exercise of powers by the Resolution Professional during the Corporate Insolvency Resolution Period. The Promoters are failed to comply their one-time settlement proposal till 31st December 2019. Appeal dismissed.

Summary

Issues: Jurisdiction of the Appellate Tribunal, Maintainability of the Appeal, Material Irregularity in Exercise of Powers by Resolution Professional

The judgment by the National Company Law Appellate Tribunal, New Delhi involved the issue of jurisdiction of the Appellate Tribunal and the maintainability of the appeal. The Appellant, representing a shareholder of the Corporate Debtor, sought a stay on the Corporate Insolvency Resolution Process (CIRP) until the next hearing, claiming readiness of the Promoters to pay an equal amount accepted by the Successful Resolution Applicant. The Respondent, representing the Resolution Professional, argued that the Appellants, as shareholders, lacked locus standi to file the appeal as they had not raised any objection before the Adjudicating Authority. The Respondent further contended that the appeal could only be filed on grounds of material irregularity in the exercise of powers by the Resolution Professional during the CIRP. However, the Appellants failed to point out any material irregularity, leading to the contention that the appeal was not maintainable and should be dismissed at the threshold.

The Appellate Tribunal considered the submissions and noted that the Appellants did not demonstrate any material irregularity in the Resolution Professional's exercise of powers during the Corporate Insolvency Resolution Period. Additionally, the Promoters failed to comply with their one-time settlement proposal by the specified deadline. The Respondent highlighted that the Appellate Tribunal had previously vacated the stay over the CIRP based on a one-time settlement proposal by the Suspended management, which was not acted upon within the stipulated timeframe. Subsequently, a fresh publication for the expression of interest was made, and the Committee of Creditors (COC) approved the Resolution Plan with 100% voting share, which was then approved by the Adjudicating Authority through the Impugned Order. In light of these circumstances, the Respondent requested the dismissal of the appeal at the motion stage.

Ultimately, the Appellate Tribunal found no grounds to interfere with the Impugned Order. Considering the lack of material irregularity in the Resolution Professional's actions and the failure of the Promoters to adhere to the one-time settlement proposal deadline, the Tribunal summarily dismissed the appeal, emphasizing that no costs were to be incurred. The judgment underscores the importance of demonstrating material irregularities and complying with settlement proposals within specified timelines in insolvency resolution proceedings.