9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 412 - AT - Insolvency and BankruptcyDirection to give a chance to submit Resolution Plan - time limitation - major part of the CIRP Proceedings and the approval of the present Resolution Plan had taken place during Covid Pandemic Period - Corporate Debtor is an MSME Unit a Corporate Guarantor to the Principal Borrower - HELD THAT - This is the case of the CD which is an MSME Unit, a corporate guarantor to the principal borrower National Board Limited. The CD was established on 11.12.1973 - Section 29-A R/w Section 240-A of the Code refers to the Resolution Applicant in respect of CIRP of any MSME and these two sections provide for certain reliefs to the promoter of the MSME as a prospective Resolution Applicant and is entitled to have opportunity to place Resolution Plan. Keeping in mind the intention of the legislature, there is no harm in giving an opportunity to the MSME in accordance with the provisions of the Code for keeping the promotion of entrepreneurship alive. The Adjudicating Authority has only provided an opportunity to the MSME and has given the liberty to the CoC to negotiate with existing Resolution Applicant and MSME unit also and accept the one which is commercially viable and technically feasible. There are no infirmity in the order - appeal dismissed.
Issues Involved:
1. Appeal against the order passed by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016. 2. Consideration of the Resolution Plan submitted by the Suspended Management of the Corporate Debtor, an MSME unit. 3. Challenges raised by the Successful Resolution Applicant regarding the Resolution Process. 4. Dispute regarding the locus standi of the Appellant and compliance with regulatory provisions. 5. Pending application before the Adjudicating Authority related to transaction audit and relevant sections of the Insolvency and Bankruptcy Code. 6. Examination of various legal judgments cited by the parties. Detailed Analysis: 1. The appeal was filed against the order of the Adjudicating Authority by the Appellant, a corporate debtor, under the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority allowed the Suspended Management of the Corporate Debtor, an MSME unit, to submit a Resolution Plan considering various factors, including the impact of the Covid-19 pandemic on the Corporate Insolvency Resolution Process (CIRP). 2. The Adjudicating Authority raised concerns regarding the Financial Creditor's claim amounting to 43 times the original loan disbursed, invoking the corporate guarantee, and the issue of One Time Settlement (OTS). The Resolution Plan submitted by the Successful Resolution Applicant was pending approval, and the Respondent No.1 expressed interest in submitting a belated Resolution Plan, alleging fraudulent transactions by the Appellant. 3. The Respondent No.1 challenged the Appellant's participation in the proceedings, alleging non-compliance with regulatory provisions and lack of transparency in the Resolution Process. The Respondent raised issues related to the Resolution Professional's conduct, CoC's constitution, and the involvement of other Resolution Applicants. 4. The Resolution Professional highlighted a pending application related to transaction audit and compliance with specific sections of the Insolvency and Bankruptcy Code. The RP awaited further directions from the Adjudicating Authority regarding the resolution of the pending issues. 5. The Appellate Tribunal considered the submissions of all parties and relevant records. The Tribunal acknowledged the unique circumstances of the MSME unit and the need to promote entrepreneurship while ensuring compliance with the Code. The Tribunal cited various legal judgments but emphasized the Adjudicating Authority's discretion in allowing the MSME unit to submit a Resolution Plan. 6. Ultimately, the Tribunal dismissed the appeal, finding no infirmity in the Adjudicating Authority's order. The Tribunal advised the Adjudicating Authority to address the pending application before approving any Resolution Plan, ensuring due process and compliance with regulatory requirements. This comprehensive analysis covers the key issues and details of the legal judgment, highlighting the complexities of the case and the considerations made by the Appellate Tribunal.
|
