9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 839 - Tri - Insolvency and BankruptcyRecalling of approved Resolution Plan - Whether a Resolution Plan approved by the Adjudicating Authority can be recalled and an order of Liquidation be passed? - HELD THAT - In the matter Committee of Creditors of Educomp Solutions Ltd. vs. Ebix Singapore Pte. Ltd. Anr. 2020 (8) TMI 338 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI , it was held that this Tribunal cannot exercise its powers under Section 60(5) of I B Code and recall its own orders, as there is a provision of Appeal in such matters. The plea raised by the applicant in IA/IBC/16/KOB/2021 to get back the EMD amount of ₹ 25,00,000/- also cannot be entertained at this stage because after approval of the Resolution Plan by this Tribunal, a Resolution Applicant cannot come forward and state that due to their ignorance about the provisions regarding Asset Reconstruction Companies they are withdrawing the Resolution Plan, as the Resolution Applicant should have examined all the provisions/ rules before submitting a Resolution Plan and depositing the E.M.D. As per Regulation 36B (4A) of IBBI (Insolvency Resolution Process for Corporate persons) Regulations, 2016, the Request For Resolution Plans (RFRP) shall require the Resolution Applicant (if the resolution plan is approved under Sub-Section (4) of Section 30), to provide a performance security within the time specified therein and such performance security shall stand forfeited if the Resolution Applicant of such plan, after its approval by the Adjudicating Authority, fails to implement or contributes to the failure of implementation of that plan in accordance with the terms of the plan and its implementation schedule. Thus, it is clear that when a Resolution Plan is admitted, in case the party withdraws its Resolution Plan by not remitting the requisite amount, surely the EMD amount paid will be forfeited as per the aforesaid provisions in the IBBI Regulations. Hence, this Tribunal cannot direct the Resolution Professional to refund the EMD of the Resolution Applicant - Since the Resolution Applicant has withdrawn the Resolution Plan for the reasons stated in their request for withdrawal of Resolution Plan and that the EMD amount is still available with the Resolution Professional, it is a matter for the parties to approach the appropriate forum seeking directions as per the IBBI Regulations. This Tribunal cannot either order liquidation or to direct the refund of the EMD, as this Tribunal has become functus officio after approval of a Resolution Plan with the consent of both the parties - Application dismissed.
Issues Involved:
1. Liquidation of the Corporate Debtor. 2. Appointment of a liquidator. 3. Remuneration to the Chairman of the Monitoring Committee. 4. Withdrawal of the approved Resolution Plan. 5. Forfeiture of the Performance Guarantee. 6. Refund of the Deposit amount. Issue-wise Detailed Analysis: 1. Liquidation of the Corporate Debtor: The Resolution Professional filed MA/186/KOB/2020 under Section 60(5) of the Insolvency and Bankruptcy Code (I&B Code) 2016, seeking an order to liquidate the Corporate Debtor, Palm Lagoon Backwater Resorts Private Limited, due to the Resolution Applicant's unwillingness to implement the approved Resolution Plan. The Tribunal noted that the statutory period for the Corporate Insolvency Resolution Process (CIRP) had expired, and more than seven months had passed since then. Despite the Resolution Plan being approved by the Committee of Creditors (CoC) and the Tribunal, the Resolution Applicant sought withdrawal, citing non-compliance with RBI guidelines for Asset Reconstruction Companies. 2. Appointment of a Liquidator: The Resolution Professional also sought to be appointed as the liquidator of the company with specified remuneration. However, the Tribunal did not address this request directly in the judgment, as it focused on the issues surrounding the withdrawal of the Resolution Plan and the forfeiture of the Performance Guarantee. 3. Remuneration to the Chairman of the Monitoring Committee: The Resolution Professional requested an order directing the Resolution Applicant to pay ?1,00,000 as remuneration to the Chairman of the Monitoring Committee. The Tribunal noted that the Monitoring Committee had discussed this issue, and the Resolution Applicant had requested the Chairman to include this fee in the application filed with the Tribunal. However, the Tribunal did not provide a specific ruling on this remuneration request. 4. Withdrawal of the Approved Resolution Plan: The Resolution Applicant filed IA/(IBC)/16/2021 under Section 60(5) of the I&B Code 2016, seeking permission to withdraw the Resolution Plan, citing RBI's denial of permission for the Resolution Plan due to non-conformance with guidelines for Asset Reconstruction Companies. The Tribunal referred to the NCLAT ruling in the Educomp Solutions case, which held that once a Resolution Plan is approved by the CoC and the Adjudicating Authority, it becomes binding, and there is no provision in the I&B Code allowing for its withdrawal. Consequently, the Tribunal rejected the withdrawal request. 5. Forfeiture of the Performance Guarantee: The Resolution Applicant also sought to set aside the Monitoring Committee's decision to forfeit the Deposit amount of ?25,00,000, which was treated as a Performance Guarantee. The Tribunal noted that the CoC had unilaterally converted the Process Participation Deposit into a Performance Guarantee, which the Resolution Applicant argued was beyond the CoC's powers. However, the Tribunal upheld the forfeiture, citing Regulation 36B(4A) of the IBBI Regulations, which allows for the forfeiture of performance security if the Resolution Applicant fails to implement the approved plan. 6. Refund of the Deposit Amount: The Resolution Applicant requested a refund of the ?25,00,000 Deposit amount. The Tribunal ruled that after the approval of the Resolution Plan, the Resolution Applicant could not claim ignorance of the provisions regarding Asset Reconstruction Companies to withdraw the plan. The Tribunal emphasized that the EMD amount would be forfeited as per IBBI Regulations if the Resolution Applicant failed to implement the plan. Therefore, the Tribunal dismissed the request for a refund. Conclusion: The Tribunal dismissed both applications, MA/186/KOB/2020 and IA/(IBC)/16/KOB/2021, stating that it could not order liquidation or direct the refund of the EMD, as it had become functus officio after approving the Resolution Plan. The parties were advised to approach the appropriate forum for further directions as per the IBBI Regulations.
|
