2022 (9) TMI 276 - AT - Insolvency and Bankruptcy

Approved Resolution Plan - Rectification of mistake - error apparent on the face of record or not - Whether the Appellant is entitled to claim relief under Section 60(5) when the Resolution Plan was approved and attained finality? - HELD THAT - Once the Resolution Plan was approved by CoC and thereafter by Adjudicating Authority, the same cannot be withdrawn or modified by inventing devise under Section 60(5) of IBC as held by Hon ble Apex Court in Committee Of Creditors Of Essar Steel India Limited vs Satish Kumar Gupta 2019 (11) TMI 731 - SUPREME COURT since the proceedings under IBC are time bound. Admittedly, the Resolution Plan was approved by the CoC with a majority of 81.39 %, voting which is in compliance of Section 30(2) of IBC and later, the Resolution Plan was approved by the Adjudicating Authority, and attained finality, since, it was not challenged by the Appellant herein. Though the Appellant gave dissent during 20th Meeting of CoC and addressed letter dated 06.12.2018 and 12.12.2018, i.e., subsequent to approval of Resolution Plan by CoC, those letters are of no help to the Appellant. Those letters cannot be taken into consideration when the plan was approved by CoC and Adjudicating Authority. In case, any error or illegality is found, it is the duty of the Adjudicating Authority to send back Resolution Plan for reconsideration by CoC. But no illegality or contravention of provisions of IBC was found by Adjudicating Authority and as such approved the Resolution Plan. When the Resolution Plan is approved and attained finality, the same cannot be altered or modified or withdrawn - the Appellant is not entitled to claim any relief in the present Appeal as the Resolution Plan was already approved and attained finality. On this ground alone, the Appeal is liable to be dismissed. Whether the Appellant being dissenting secured Creditor is competent to challenge approval of Resolution Plan by filing the instant Appeal? - HELD THAT - When the Appellant is dissenting Creditor, Appellant is not competent to challenge the approved Resolution Plan and file an Appeal under Section 61 of IBC before this Tribunal. Applying the principle laid down in the above judgments, it is held that the Appellant being a dissenting secured Financial Creditor is not entitled to challenge Resolution Plan on the ground of discrimination by filing separate Interlocutory Application without challenging the approved Resolution Plan. Accordingly, the point is held against the Appellant and in favour of the Respondent. Whether the alleged discrimination overrides the commercial wisdom of the CoC, if so, the order passed by the Adjudicating Authority is liable to be set aside? - HELD THAT - This Tribunal does not have power of judicial review, when the decision taken by CoC in compliance of Section 30(2) and Regulations 37 38 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016. Even this Tribunal is also not entitled to interfere with such decision, except where the approved Resolution Plan is contrary to the provision of IBC or any other law which would fall within Section 61(3) of IBC - there are no merit in the contentions of learned Senior Counsel for the Appellant and the appeal is devoid of merits. Consequently, the Appeal is liable to be dismissed. Appeal dismissed.

Summary

Issues Involved:
1. Entitlement of the Appellant to claim relief under Section 60(5) of the Insolvency and Bankruptcy Code (IBC).
2. Competence of the Appellant, as a dissenting secured creditor, to challenge the approved Resolution Plan.
3. Impact of alleged discrimination on the commercial wisdom of the Committee of Creditors (CoC).

Detailed Analysis:

Issue 1: Entitlement to Claim Relief under Section 60(5) of IBC
The Appellant, a secured financial creditor, contended that the Resolution Plan approved by the CoC and Adjudicating Authority was discriminatory and did not comply with the provisions of IBC. The Appellant argued that the plan did not prioritize their higher value security interest. However, it was noted that the Appellant did not challenge the approved Resolution Plan before the Appellate Authority under Section 61 of IBC. Instead, the Appellant filed an application under Section 60(5) to challenge the plan, which was seen as circumventing the law. The Tribunal emphasized that once a Resolution Plan is approved by the CoC and Adjudicating Authority, it cannot be modified or withdrawn, as established in the "Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited and Anr." case. Therefore, the appeal was dismissed on this ground.

Issue 2: Competence to Challenge as a Dissenting Secured Creditor
The Appellant, being a dissenting creditor, raised objections during the CoC meetings and through letters, arguing that the Resolution Plan was discriminatory. However, the Tribunal referred to the Supreme Court's rulings in "Indian Resurgence ARC Private Limited v. M/s Amit Metaliks Limited & Anr." and "Jaypee Kensington Boulevard Apartments Welfare Association and Others v. NBCC (India) Limited and others," which clarified that dissenting secured creditors cannot challenge an approved Resolution Plan based on their dissatisfaction with the security interest. The Tribunal held that the Appellant, as a dissenting secured creditor, was not competent to challenge the approved Resolution Plan, and the appeal was dismissed on this ground as well.

Issue 3: Impact of Alleged Discrimination on Commercial Wisdom of CoC
The Appellant argued that the Resolution Plan did not give priority to their higher value security interest and was discriminatory. However, the Tribunal noted that the Resolution Professional had examined the plan in compliance with Section 30(2) of IBC and placed it before the CoC, which approved it with a majority of 81.39%. The Tribunal emphasized that the commercial wisdom of the CoC is supreme and not subject to judicial review, as established in "Committee Of Creditors Of Essar Steel India Limited vs Satish Kumar Gupta" and other cases. The Tribunal concluded that the approved Resolution Plan, which was not under challenge, complied with legal requirements and could not be interfered with. Therefore, the appeal was dismissed on this ground as well.

Conclusion:
The Tribunal dismissed the appeal, confirming the order passed by the Adjudicating Authority. The Tribunal held that the Appellant was not entitled to claim relief under Section 60(5) of IBC, was not competent to challenge the approved Resolution Plan as a dissenting secured creditor, and that the alleged discrimination did not override the commercial wisdom of the CoC.