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2022 (7) TMI 464 - AT - Insolvency and BankruptcyApproval of Resolution Plan - Section 30(6) of the I B Code, 2016 - HELD THAT - It is seen that the plan submitted by the 1st Respondent is in compliance with the technical and commercial requirement of the RFRP and is also incompliance with the Code as well as the Regulations. The Resolution Applicant enclosed the compliance certificate in Form-H of the Schedule and complied the procedure as per law. This Tribunal is of the view that the commercial wisdom of the Committee of Creditors cannot be interfered with by this Tribunal in absence of any illegality or infirmity or violation of any statutory provisions of law. This Tribunal is of the view that the plan is in accordance with law and do not find any legal infirmity or illegality in the Resolution Plan, which was rightly approved by the Adjudicating Authority. The Hon ble Supreme Court time and again held that the commercial wisdom of the CoC cannot be interfered with by the NCLT and NCLAT. - reliance can be placed in the case of VALLAL RCK VERSUS M/S SIVA INDUSTRIES AND HOLDINGS LIMITED AND OTHERS 2022 (6) TMI 173 - SUPREME COURT where it was held that we do take this opportunity to offer a note of caution for NCLT and NCLAT, functioning as the Adjudicatory Authority and Appellate Authority under the IBC respectively, from judicially interfering in the framework envisaged under the IBC. This Tribunal comes to an irresistible and inescapable conclusion that the Company Appeals are devoid of merits - appeal dismissed.
Issues:
Appeal against approval of Resolution Plan under Section 30(6) of I&B Code, 2016 by Adjudicating Authority without Operational Creditors' involvement in CoC meetings. Detailed Analysis: Issue 1: Approval of Resolution Plan The Appeals challenged the approval of the Resolution Plan under Section 30(6) of the I&B Code, 2016 by the Adjudicating Authority. The Resolution Plan was submitted by the Consortium of Resolution Applicant and was approved on 20.07.2020. The Appellants, Operational Creditors of the Corporate Debtor, were not part of CoC meetings and were not informed about the settlement proposal for their claims. The Resolution Plan proposed a total payment of Rs. 368.5 crore to all stakeholders, with Operational Creditors receiving a meager sum of Rs. 3 crore despite their total claim of Rs. 175.13 crores. Issue 2: Lack of Involvement in CoC Meetings The Appellants argued that as Operational Creditors, they were not involved in the deliberative process of CoC meetings, depriving them of the opportunity to oppose the Resolution Plan on its merit. The Adjudicating Authority's approval of the Plan without their participation was deemed as not in accordance with the law. Issue 3: Compliance with Legal Requirements The Resolution Applicant's plan was found to be compliant with the technical and commercial requirements of the Request for Resolution Plans (RFRP) and the I&B Code. The plan had the necessary approvals from CoC members, with 67.9% voting in favor of the plan on 27.11.2019. The Resolution Applicant followed the legal procedures and submitted a compliance certificate as per the law. Issue 4: Judicial Interference The Tribunal emphasized minimal judicial interference in the commercial wisdom of the CoC, citing previous Supreme Court judgments. The recent judgment highlighted the need to avoid judicial intervention in the framework of the Insolvency and Bankruptcy Code (IBC). The Tribunal concluded that the Appeals lacked merit and upheld the Adjudicating Authority's approval of the Resolution Plan, dismissing the Appeals and closing the associated applications. In conclusion, the Tribunal upheld the approval of the Resolution Plan, emphasizing the commercial wisdom of the CoC and minimal judicial interference in insolvency proceedings under the I&B Code. The Appeals were dismissed, and the parties were directed to bear their own costs.
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