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2022 (12) TMI 1510 - SC - Insolvency and BankruptcyEligibility to submit the resolution plan under Section 29A(f) of the IBC - rejection on the ground that the resolution applicant was ineligible under Section 29A(f) of the IBC at the time of submission of the resolution plan - HELD THAT - Since the Court is apprised of the fact that substantially higher offers are now made available to the CoC it would be appropriate and proper that the CoC is permitted to proceed further on the basis of the fresh EoIs which have been received. Since the subsequent communication dated 16 February 2021 issued by BSE operates to lift the restraint status that was imposed on the appellants it would be appropriate to permit the appellants to submit a resolution plan and an EoI to the CoC within a period of thirty days. The bank guarantees and the earnest money which were submitted by the appellants with their resolution plan shall be returned back to the appellants so as to facilitate the submission of a fresh resolution plan together with a fresh bank guarantee - The period for the completion of the process shall stand extended by sixty days from the date of this order. After completing the process the RP shall file a fresh application before the adjudicating authority for approval of the resolution plan in terms of the provisions of Section 31 of the IBC. The impugned judgment and order of the NCLAT is set aside and substituted by the directions - Appeal disposed off.
Issues:
1. Interpretation of Section 29A(f) of the Insolvency and Bankruptcy Code. 2. Validity of debarment by SEBI and BSE. 3. Impact of subsequent developments on resolution process. Interpretation of Section 29A(f) of the Insolvency and Bankruptcy Code: In the case involving two appeals arising from the National Company Law Appellate Tribunal's judgment, the issue revolved around the interpretation of Section 29A(f) of the Insolvency and Bankruptcy Code. The appellant, a resolution applicant, was declared ineligible under this provision due to alleged debarment by SEBI from accessing the securities market. The appellant contested this decision, arguing that SEBI had not exercised its powers under Section 11(4) of the SEBI Act 1992 to debar them. The NCLT upheld the debarment, which was subsequently affirmed by the NCLAT. However, the Supreme Court, after considering the submissions made, concluded that the appellant was not validly debarred under Section 29A(f) and directed further proceedings based on subsequent developments and fresh Expressions of Interest (EoIs). Validity of debarment by SEBI and BSE: The appellant's contention was that the debarment by BSE, based on SEBI's circulars, was illegal as SEBI had not delegated the power to impose such restrictions. The NCLAT observed that the validity of BSE's notice should be determined through writ proceedings under Article 226 of the Constitution. The Supreme Court, after hearing arguments, noted that subsequent developments, including the lifting of the restraint status by BSE, influenced the resolution process significantly. As a result, the Court directed the CoC to consider the fresh EoIs and allowed the appellant to submit a new resolution plan within a specified timeframe. Impact of subsequent developments on resolution process: The Supreme Court considered the subsequent developments, such as the lifting of the restraint status by BSE and the emergence of substantially higher offers during the resolution process. In light of these developments, the Court directed the CoC to proceed based on the fresh EoIs, allowing the appellant to submit a new resolution plan within thirty days. The Court extended the completion period by sixty days and instructed the return of bank guarantees and earnest money to facilitate the submission of a fresh resolution plan. Consequently, the impugned judgment of the NCLAT was set aside, and the case was disposed of based on the new directions provided by the Court. This detailed analysis of the judgment highlights the key legal issues, arguments presented, and the Supreme Court's decision, ensuring a comprehensive understanding of the case.
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