2022 (1) TMI 1406 - AT - Insolvency and Bankruptcy

Order for keeping the approval of the Resolution Plan in abeyance - HELD THAT - Avoidance transactions of approximately Rs. 1000/- Crore has also come to the light - No doubt, it is a settled law that commercial wisdom of the Committee of Creditors (CoC) is supreme and cannot be interfered in a normal circumstance but when figures of crore are emerging stagewise then there is no harm to look at the Expert opinion which the Adjudicating Authority in this case has asked for. As far as the RP is concerned, he is treated as an officer of the court and as appears to us, no adverse comment has been passed against him. He has only been requested to co-operate with the OL. There is nothing adverse against him. There are no merits in these appeals - appeal disposed off.

Summary

Issues:
1. Appeal against the order keeping the approval of the Resolution Plan in abeyance.
2. Appeal by the Resolution Professional against adverse remarks by the Adjudicating Authority.
3. Hearing and disposal of both appeals arising from the same impugned order.

Analysis:
1. The first issue pertains to an appeal filed under section 61 of the Insolvency and Bankruptcy Code against an order directing the Resolution Professional to provide valuation details and cooperate with the Official Liquidator. The Adjudicating Authority sought expert opinion on asset valuations due to significant discrepancies in the amounts involved, with a haircut ranging from 94 to 99% for different classes of creditors. The Authority emphasized the need to ensure proper valuation and compliance with the provisions of the Code to address suspicions regarding the substantial reduction in creditor payouts.

2. The second issue involves an appeal by the Resolution Professional against adverse remarks made by the Adjudicating Authority during the Corporate Insolvency Resolution Process. The RP had appointed valuers who submitted reports, but subsequent information regarding land allotment led to amendments in the valuation. Additionally, avoidance transactions worth approximately Rs. 1000 crore came to light, prompting the Authority to seek expert opinions despite the usual deference to the Committee of Creditors' commercial decisions. The RP was directed to cooperate with the Official Liquidator, but no adverse comments were made against him.

3. Both appeals arose from the same impugned order, leading to a joint hearing and disposal by the Tribunal. The Tribunal found no merit in the appeals based on the facts presented, ultimately dismissing them without any order as to costs. The decision underscores the importance of proper valuation procedures and the Authority's role in ensuring transparency and adherence to legal requirements during insolvency proceedings.