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2022 (2) TMI 1288 - Tri - Insolvency and BankruptcyValidity of approved Resolution Plan - illegality or non-adherence to the law with respect to the Resolution Plans or not - HELD THAT - In view of the law laid down by Hon ble Supreme Court in Arcelormittal India Private Limited vs. Satish Kumar Gupta and Ors. 2018 (10) TMI 312 - SUPREME COURT , it not a stage for us to look into the alleged irregularities/ violations in the resolution plan. It is the settled law that resolution professional is merely a facilitator. Resolution plan prepared by him is not binding upon the CoC. It is only the CoC which has to take the final call to approve the resolution plan or reject it. The approval of the 'Resolution Plan' is in the domain of the 'Committee of Creditors' and not that of 'Resolution Professional, and CoC in the present case is yet to take a call on resolution plan/s before it. Application not maintainable.
Issues Involved:
1. Legality and compliance of the resolution plan under Section 30(2) of the Insolvency and Bankruptcy Code (IBC), 2016. 2. Jurisdiction and authority of the Committee of Creditors (CoC) and Resolution Professional (RP) under IBC. 3. Alleged violations and irregularities in the resolution plan. 4. Impact on third-party contracts and assets. 5. Timing and appropriateness of filing the interlocutory application. Detailed Analysis: 1. Legality and Compliance of the Resolution Plan: The applicant, Aska Investments Private Limited, argued that the resolution plan submitted by Uniglobal Paper Private Limited in consortium with Trade Sea International Pte. Ltd. was non-compliant with Section 30(2) of the IBC. The applicant highlighted several infirmities in the plan: - Termination of third-party agreements and recovery of possession and management of tea gardens without the third party's approval. - Extinguishment of future gratuity liabilities, which is not permitted. - Discrimination among creditors of the same class. - Exemption from payment of taxes and stamp duty as an integral part of the plan. 2. Jurisdiction and Authority of the CoC and RP: The applicant contended that the RP was not entitled to submit the impugned resolution plan to the CoC as it was non-compliant with Section 30(3) of the IBC and Regulation 39(2) of the CIRP Regulations. The applicant argued that the CoC's jurisdiction to consider a non-compliant plan was ousted under Regulation 39(1B)(c) of the CIRP Regulations. The RP's role as a facilitator, not a decision-maker, was emphasized, and it was argued that the CoC should evaluate the feasibility and viability of the resolution plan as per Regulation 39 of the IBC. 3. Alleged Violations and Irregularities in the Resolution Plan: The applicant pointed out specific clauses in the resolution plan that were allegedly in violation of the IBC and CIRP Regulations. These included: - Clause 2.8(2) related to the termination of third-party agreements. - Para 2.2.16 related to extinguishment of future gratuity liabilities. - Discrimination among creditors in the same class. - Clause 9.3.1 related to exemptions from taxes and stamp duty. 4. Impact on Third-Party Contracts and Assets: Merico Agro Industries Private Limited, a third party, argued that the RP entertained a resolution plan that sought to terminate agreements under which Merico was running certain tea gardens. Merico contended that these tea gardens were not assets of the Corporate Debtor (CD) and that the RP's actions were in contravention of an earlier order by the Tribunal. 5. Timing and Appropriateness of Filing the Interlocutory Application: The RP and Respondent No. 3 argued that the application by Aska Investments was premature and intended to scuttle the insolvency resolution process. It was contended that any deviation or illegality in the resolution plan could only be examined at the stage of Section 30(1) of the IBC, and the applicant should have raised objections at the appropriate stage. The RP also highlighted that the application was filed at the eleventh hour when the e-voting on the resolution plan was ongoing. Conclusion: The Tribunal, after considering the arguments and contentions of all parties, concluded that it was not the stage to examine the alleged irregularities or violations in the resolution plan. The Tribunal held that the resolution professional is merely a facilitator, and the approval of the resolution plan is in the domain of the CoC. The application was deemed not maintainable at this stage, and IA(IB) No. 131/KB/2022 was rejected. Order: The application IA(IB) No. 131/KB/2022 is hereby rejected. Certified copies of the order may be issued to all concerned parties upon compliance with requisite formalities.
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