2023 (5) TMI 1291 - AT - Insolvency and Bankruptcy

Approval of the Conditional Resolution Plan - HELD THAT - The condition which are contained to the effect that Resolution Applicant can seek suitable modification or withdraw plan are conditions which are unenforceable on account of law declared by the Hon ble Supreme Court in Ebix Singapore (Supra). The facts of the present case as detailed in the Reply filed by Respondent No.3 as well as Resolution Professional indicate that plan has been implemented and all necessary approvals including the approval by NHAI has been received for carrying out the plan. After implementation of the plan, we are of the view that the submissions of learned counsel for the Appellant that Resolution Plan was conditional plan and could not have been approved, does not furnish any ground to interfere with the impugned order, at this stage. NHAI approval was set out as a condition precedent to takeover the Corporate Debtor since it was provided in Clause 5.3.1 of the Concession Agreement. The law declared by the Hon ble Supreme Court in Ebix Singapore 2021 (9) TMI 672 - SUPREME COURT made categorical that no Resolution Applicant can be allowed to withdraw their plan and in facts of the present case, Resolution Applicant has never come up with any case, application or request to withdraw from the Resolution Plan. Present is a case where Form G was issued and time to submit the plan was extended time to time. There were two Resolution Plans which were duly considered by the Committee of Creditors. The submission of the Appellant that mandatory requirements as prescribed under Regulation 38(3) of the Regulations, 2016 has not been satisfied since there are no reasons given regarding cause of default - submission of learned counsel for the Appellant that mandatory requirement under Regulation 38 is not fulfilled, is not correct and the plan gives causes of default, hence, the above mandatory requirement under the plan is fulfilled. There are no substance in any of the submission of learned counsel for the Appellant to interfere with the impugned order - there is no merit in the Appeal - appeal dismissed.

Summary

Issues Involved:
1. Conditionality of the Resolution Plan
2. Viability and Feasibility of the Resolution Plan
3. Allegations of Fraud and Collusion
4. Compliance with Regulation 38(3) of the Regulations, 2016

Summary:

1. Conditionality of the Resolution Plan:
The Appellant argued that the Adjudicating Authority erred in approving a conditional Resolution Plan, citing the judgment in "Ebix Singapore Pvt. Ltd. vs. Committee of Creditors of Educomp Solutions Ltd." The Tribunal noted that the Hon'ble Supreme Court in the "Ebix Singapore" case ruled that a Resolution Plan whose implementation can be withdrawn by the Successful Resolution Applicant is inherently unviable. However, in the present case, the conditions allowing the Resolution Applicant to seek modifications or withdraw the plan are unenforceable due to the Supreme Court's ruling. The Tribunal found that the plan had already been implemented, and all necessary approvals, including from NHAI, had been received. Therefore, the conditionality argument did not furnish grounds to interfere with the impugned order.

2. Viability and Feasibility of the Resolution Plan:
The Appellant contended that the financial proposal by the Successful Resolution Applicant was unviable as it did not infuse any funds of its own. The Tribunal held that the question of viability and feasibility was within the commercial wisdom of the Committee of Creditors (CoC). The CoC's decision on the plan's viability and feasibility is not justiciable, as established by the Supreme Court in "K. Sashidhar vs. Indian Overseas Bank and Ors."

3. Allegations of Fraud and Collusion:
The Appellant alleged fraud and collusion between the Resolution Professional and the Successful Resolution Applicant. The Tribunal dismissed these allegations, stating that fraud and collusion are easy to allege but difficult to prove. No specific pleadings or materials were brought on record to support these claims. The Tribunal viewed the appeal as an attempt to derail the resolution and revival of the Corporate Debtor.

4. Compliance with Regulation 38(3) of the Regulations, 2016:
The Appellant argued that the mandatory requirements under Regulation 38(3) were not fulfilled, particularly the cause of default. The Tribunal referred to Clause 10.3 of the Resolution Plan, which detailed the causes of default, including delays in construction, lapses in annuity payments, and lack of support from the Promoter Group. The Tribunal concluded that the plan met the mandatory requirements under Regulation 38(3).

Conclusion:
The Tribunal found no merit in any of the Appellant's submissions and dismissed the appeal, upholding the approval of the Resolution Plan by the Adjudicating Authority.