9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 884 - AT - Insolvency and BankruptcyApproval of Resolution Plan - Section 61 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It is not disputed between the parties that Resolution Plan of Appellant stood approved by the CoC by majority of 98.55% voting shares. The approval of the Resolution Plan was well within CIRP period as extended by the Adjudicating Authority. It is on the record that CIRP period of the Corporate Debtor was to expire on 28.07.2021. Thereafter, eight weeks extension was granted by the Adjudicating Authority vide order dated 26.07.2021. During the CIRP, two Resolution Plans were placed for approval before the CoC and the Resolution Plan of the Appellant received 98.55% voting shares. An Application for approval of the Resolution Plan was filed by the Resolution Professional on 24.09.2021. The Letter of Intent was issued to the Appellant on 21.09.2021. It is not the case of any of the parties that Respondent No.3 in the CIRP had given any Expression of Interest. The CIRP period as per pleadings of the Resolution Professional came to end on 26.09.2021. Application for approval of the Resolution Plan was already filed and pending consideration before the Adjudicating Authority. The CoC in its meeting dated 18.12.2021 has clearly refused to consider the plan of Respondent No.3 after over of CIRP which fact was communicated by the Resolution Professional to the Respondent No.3. A perusal of the order of the Adjudicating Authority impugned in the present Appeal indicate that the Respondent No.3 has represented before the Adjudicating Authority that CoC is of the view that it could be taken into consideration subject to the outcome of this Application and directions issued by this Bench . The CoC could not as per existing law, consider the Resolution Plan of Respondent No.3 after approval of the plan of the Appellant and after over of the CIRP. The CoC having approved the plan of the Appellant had rightly taken a decision on 18.12.2021 to communicate the Respondent No.3 that plan of Respondent No.3 cannot be considered. There is no valid reason given by the Adjudicating Authority for permitting the consideration of plan of Respondent No.3. The consideration of the Resolution Plan of Respondent No.3 shall be breaching both timeline as well as the finality of the Resolution Plan of the Appellant which was approved by the CoC on 26.08.2021. There is no substance in the submission of the Counsel for the Respondent No.3 that plan of Appellant was also not submitted within the time fixed. There was no valid reason indicated in the order of the Adjudicating Authority dated 18.01.2022 for permitting the CoC to consider the Resolution Plan of the Respondent - Appeal allowed.
Issues Involved:
1. Validity of the Adjudicating Authority's order allowing the consideration of a new Resolution Plan after the approval of the Appellant's Resolution Plan. 2. Jurisdiction of the Adjudicating Authority in directing the CoC to consider a new Resolution Plan. 3. Compliance with the timeline and procedural requirements under the Insolvency and Bankruptcy Code (IBC). Detailed Analysis: 1. Validity of the Adjudicating Authority's Order: The Appellant challenged the order dated 18.01.2022, which allowed the consideration of a new Resolution Plan submitted by Respondent No.3. The Appellant argued that their Resolution Plan had already been approved by the CoC with a 98.55% voting share and that the period for submitting new plans had expired. The Adjudicating Authority's order was passed without hearing the Appellant, the Resolution Professional, or the CoC, which violated procedural fairness. The Tribunal noted that the CoC had already declined to consider Respondent No.3's plan in its meeting on 18.12.2021, and this decision was communicated to Respondent No.3. The Tribunal found that the Adjudicating Authority's order was based on incorrect representations made by Respondent No.3 and lacked valid reasons for permitting the consideration of a new plan after the approval of the Appellant's plan and the close of the CIRP. 2. Jurisdiction of the Adjudicating Authority: The Tribunal emphasized that the Adjudicating Authority does not have the jurisdiction to direct the CoC to consider a new Resolution Plan after the approval of an existing plan. The Tribunal referred to the Supreme Court's judgment in "Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited," which held that a Resolution Plan, once approved by the CoC, is binding and cannot be altered by the Adjudicating Authority. The Tribunal also cited its previous judgment in "Chhatisgarh Distilleries Ltd. vs. Dushyant Dave," where it was held that the Adjudicating Authority cannot suo motu direct the CoC to consider a new plan after the approval of an existing plan. The Tribunal concluded that the Adjudicating Authority's order was beyond its jurisdiction and set it aside. 3. Compliance with Timeline and Procedural Requirements: The Tribunal reiterated the importance of adhering to the timelines prescribed under the IBC. It noted that the CIRP is a time-bound process aimed at maximizing the value of assets and providing timely resolution. The Tribunal referred to the Supreme Court's observations in "Ebix Singapore Private Limited," which emphasized the need to adhere to strict timelines to avoid commercial uncertainty and degradation of the Corporate Debtor's value. The Tribunal found that the consideration of Respondent No.3's plan would breach the timeline and finality of the Appellant's approved plan. It also noted that the CoC had extended the submission deadline for the Appellant's plan and had communicated this extension to all prospective applicants, ensuring procedural compliance. Conclusion: The Tribunal allowed the Appeal, set aside the order dated 18.01.2022, and rejected the Application I.A. No. 43 of 2022. It held that the Adjudicating Authority's order was unsustainable as it was passed without jurisdiction, violated procedural fairness, and breached the timeline and finality of the approved Resolution Plan. The Tribunal emphasized the binding nature of the CoC's commercial decisions and the importance of adhering to the IBC's timelines to ensure an efficient and effective insolvency resolution process.
|
