2021 (3) TMI 1451 - AT - Insolvency and Bankruptcy

Dismissal of Resolution Plan already approved - failure to appreciate the fact that the COC did not consider the Resolution Plan of higher value submitted by Dr. Rajendar Singh viz. Rs. 32 Crores and approved the Resolution Plan of Successful Resolution Applicant having value of Rs. 30.10 Crores - HELD THAT - Since the Appellant himself was not in the fray and as a member of the suspended Board of Directors was ineligible to submit a Resolution Plan he could not be permitted to espouse cause of Unsuccessful Resolution Applicant thereby trying to meddle with the affairs of the Corporate Insolvency Resolution Process (CIRP) when the law forbids it to participate in such process. That apart the Resolution Plan of the Successful Resolution Applicant has already been approved by the COC and is pending approval before the Adjudicating Authority. The Appellant having no locus and being ineligible to participate in the CIRP besides having no legal authority to espouse the cause if any of the Unsuccessful Resolution Applicant cannot maintain the instant appeal. The Appellant is an alien who cannot enter the ring and participate in the CIRP Proceedings. The appeal is accordingly dismissed for being not maintainable.

Summary

Issues:
- Consideration of higher value Resolution Plan
- Appellant's eligibility to participate in the Corporate Insolvency Resolution Process (CIRP)

Consideration of higher value Resolution Plan:
The appeal was filed by a member of the Suspended Board of Directors of the Corporate Debtor against the dismissal of the application to consider a higher value Resolution Plan. The Adjudicating Authority had dismissed the application on the grounds that the Appellant was not the Unsuccessful Resolution Applicant and that the bidding process was not challenged for violating provisions. The only ground raised in the appeal was that the COC did not consider the higher value Resolution Plan submitted by another party. The Respondents argued that the Appellant did not participate in the bidding process and was ineligible to submit a Resolution Plan. The Tribunal found that the Appellant, as a member of the suspended Board of Directors, was ineligible to participate in the CIRP and could not advocate for the Unsuccessful Resolution Applicant. The Resolution Plan of the Successful Resolution Applicant had already been approved by the COC, making the appeal not maintainable. The Tribunal dismissed the appeal on these grounds.

Appellant's eligibility to participate in the CIRP:
The Tribunal emphasized that the Appellant, not being in the bidding process and lacking legal authority to advocate for the Unsuccessful Resolution Applicant, could not interfere in the CIRP proceedings. The Appellant's status as a member of the suspended Board of Directors rendered them ineligible to submit a Resolution Plan. The Tribunal held that the Appellant, having no locus to participate in the CIRP, could not maintain the appeal. It was concluded that the Appellant, being ineligible and lacking legal authority, could not enter the CIRP proceedings. As a result, the appeal was dismissed for being not maintainable.

This judgment highlights the importance of eligibility and legal authority in participating in the CIRP and advocating for Resolution Plans. It underscores the need for parties to have the necessary standing and authority to engage in insolvency proceedings, emphasizing the strict adherence to legal provisions and procedures in such matters.