2019 (6) TMI 523 - AT - Insolvency and Bankruptcy

Initiation of liquidation of the Corporate Debtor - absence of approved Resolution Plan - HELD THAT - The Appellants have made out a case of exclusion of 21 days for counting the period of 270 days i.e. the period during which the Resolution Process could not proceed. Now having received the opinion of Committee of Creditors and taking into consideration that the Resolution Plan has been approved with 71.029% of voting shares and that the 700 workmen of Corporate Debtor can be saved from retrenchment, we set-aside the impugned order dated 11th March, 2019 passed by the Adjudicating Authority as also the consequential order(s) and remit the case to Resolution Professional to place the Resolution Plan before the Adjudicating Authority for order under Section 31 of the I B Code. Appeal allowed.

Summary

Issues involved:
1. Application for initiation of liquidation in absence of approved Resolution Plan.
2. Challenge to the order passed by the Adjudicating Authority.
3. Viability and feasibility of the revised Resolution Plan.
4. Exclusion of time for successful Resolution.
5. Committee of Creditors' re-consideration of the revised Plan.
6. Dissent by certain Financial Creditors.
7. Exclusion of specific days for counting the 270-day period.
8. Approval of Resolution Plan with majority voting shares.
9. Protection of workmen from retrenchment.

Analysis:
1. The case involved an application under Section 33 of the Insolvency and Bankruptcy Code seeking liquidation due to the absence of an approved Resolution Plan. The Financial Creditor and Resolution Applicant challenged the order passed by the Adjudicating Authority on 11th March, 2019.

2. The Appellate Tribunal observed the need to determine the viability of the revised Resolution Plan submitted by the Resolution Applicant. It directed the Committee of Creditors to re-consider the revised Plan and other submissions within a specified timeframe before excluding any period for successful Resolution.

3. The Compliance Report indicated that the Revised Resolution Plan had garnered 71.029% voting shares in favor. However, certain Financial Creditors dissented, with Bank of Baroda abstaining from giving an opinion.

4. After hearing the parties and reviewing the records, the Tribunal found merit in excluding 21 days for counting the 270-day period due to various reasons, such as the delay in receiving the Adjudicating Authority's order and stays on certain proceedings.

5. Considering the Committee of Creditors' opinion and the approval of the Resolution Plan with a significant majority of voting shares, the Tribunal set aside the impugned order and remitted the case to the Resolution Professional for further proceedings under Section 31 of the I&B Code. The Adjudicating Authority was tasked with determining the fee and costs payable by the Resolution Applicant.

6. The decision aimed to protect the interests of the workmen by allowing the Resolution Process to proceed, potentially saving them from retrenchment. The Appeal was allowed with the mentioned observations and directions, without imposing any costs on the parties involved.