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2022 (4) TMI 1366 - AT - Insolvency and BankruptcyEligibility to submit resolution plan - a person whose account has been declared NPA - locus standi to file the appeal and underlying application (before the Adjudicating Authority) or not? - whether the Successful Resolution Applicant Roma Unicon Designex Consortium is eligible under section 29-A to submit a Resolution Plan for the Corporate Debtor/Earth Infrastructure Ltd. since the directors of Successful Resolution Applicant and are common with the director of Zillion Infra and Zillion Infra account was declared NPA on 31.01.2018 and hence, the condition of Section 29-A (j) r/w Explanation I is infringed? Locus standi of the Appellant to file the instant appeal - HELD THAT - The Appellant has claimed that he became aware of the ineligibility of one of the Resolution Applicants submitting plan for insolvency resolution of the Corporate Debtor and therefore, he acquired right under Section 60(5) to raise the issue before the Adjudicating Authority and also the right to file this Appeal as he found a material irregularity in exercise of the powers by the RP during the CIRP - the Appellant Bipin Sharma has the right and entitlement to file this Appeal. Non-performing assets - HELD THAT - Mrs. Rashmi Saxena seized to be a director of Zillion Infra on 02.12.2009, and therefore, her entitlement to submit the resolution plan in the CIRP of the Corporate Debtor/Earth Infrastructure Ltd. is not hit by section 29-A (c) wherein a period of one year should not have elapsed from the date of declaration of NPA of a company (in the present case Zillion Infra) who is in the management and control of the Successful Resolution Applicant, therefore, we find no strength in the arguments of the Ld. Counsel for the Appellant that Mrs. Rashmi Saxena, who submitted the resolution plan on behalf of the Roma Unicon Designex Consortium is ineligible under Section 29-A (c) to submit the resolution plan of the Corporate Debtor/Earth Infrastructure Ltd. Interpretation of the provision in section 29-A (c) and the Explanation-I of the said provision - HELD THAT - It is abundantly clear that the ingredients of sub-clause (c) of section 29-A do not come in the way of eligibility of the Successful Resolution Applicant to submit a resolution plan through its authorized representative Mrs. Rashmi Saxena. The issue of objections raised by certain homebuyers who form part of creditors in class to stand individually and object has also been considered by the Hon ble Supreme Court in the matter of Jaypee Infratech Ltd. 2021 (3) TMI 1143 - SUPREME COURT and held that any individual homebuyer or any association of homebuyers cannot maintain a challenge to the resolution plan and cannot be treated as a dissenting financial creditor or an aggrieved person. Admittedly, the class of creditors of which Applicants are a part have already assented and approved a resolution plan and therefore, are estopped in law from preferring any objection or appeal to resolution plan which has been approved by class. Thus, the Successful Resolution Applicant working through Mrs. Rashmi Saxena, one of its directors, was not ineligible to submit a resolution plan of the Corporate Debtor/Earth Infrastructure Ltd.. Moreover, the resolution plan has been approved by the financial creditors in class voting through their authorized representative - there are no reason to interfere with the impugned order - appeal dismissed.
Issues Involved:
1. Locus standi of the Appellant to file the appeal. 2. Eligibility of the Successful Resolution Applicant under Section 29-A of the IBC. Issue-wise Detailed Analysis: 1. Locus Standi of the Appellant: The Appellant claimed to be a financial creditor of the Corporate Debtor and argued that he was affected by the approval of the resolution plan submitted by an allegedly ineligible Resolution Applicant. He asserted his right to file the appeal under Section 60(5) of the IBC due to a material irregularity in the exercise of powers by the Resolution Professional (RP) during the Corporate Insolvency Resolution Process (CIRP). The Tribunal acknowledged the Appellant's right to file the appeal, stating that he had the entitlement to do so under Section 61(3)(2) of the IBC. 2. Eligibility of the Successful Resolution Applicant under Section 29-A of the IBC: The core issue revolved around whether the Successful Resolution Applicant, Roma Unicon Designex Consortium, was eligible to submit a resolution plan given the connection of its director, Mrs. Rashmi Saxena, with Zillion Infra, whose account was declared as a Non-Performing Asset (NPA) on 31.01.2018. The Appellant contended that the Adjudicating Authority erred in holding that the Resolution Applicant was not debarred under Section 29-A of the IBC because one year had not elapsed from the date of declaration of NPA of Zillion Infra until the commencement of the CIRP of the Corporate Debtor. The Appellant argued that the word "and" in Section 29-A (c) should be read as "or," which would make the Resolution Applicant ineligible. The Tribunal noted that Mrs. Rashmi Saxena was not a director of Zillion Infra at the time of the declaration of its account as NPA on 31.01.2018. She ceased to be a director of Zillion Infra on 02.12.2009, and thus, her entitlement to submit the resolution plan was not affected by Section 29-A (c). The Tribunal referred to the Supreme Court judgments in Swiss Ribbons Pvt. Ltd. and Arcelor Mittal India Private Limited, which clarified that the disqualification under Section 29-A (c) attaches at the time of submission of the resolution plan and that the one-year period must elapse from the date of classification as NPA to the date of commencement of the CIRP. Furthermore, the Tribunal emphasized that the resolution plan had been approved by the financial creditors in class voting through their authorized representative, and individual homebuyers or associations could not challenge the resolution plan once it had been approved by the class. Conclusion: The Tribunal concluded that the Successful Resolution Applicant, through Mrs. Rashmi Saxena, was not ineligible to submit the resolution plan for the Corporate Debtor. The resolution plan had been approved by the financial creditors in class, and there was no reason to interfere with the impugned order. Consequently, the appeal was dismissed with no order as to costs.
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