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2022 (10) TMI 324 - AT - Insolvency and BankruptcySeeking a direction for admitting the Appellant s Claim in the Resolution Plan - seeking to declare that the Applicant is an Operational Creditor of the Petitioner to the extent of Rs.25,52,08,897/- as set out in Form B dated June 11, 2018 filed by the Applicant before the Resolution Professional - HELD THAT - It is evident that the Commercial Wisdom of the CoC is non-justiciable except when there is any material irregularity or error apparent on the face of record, which in the instant case is absent. We do not find any material irregularity to warrant our interference or exercise our powers under Section 30(2) of the Code. in the decision of the Adjudicating Authority in dismissing the Applications preferred by the Appellant herein based on the findings of the A M Report. It is significant to mention that the Resolution Plan was approved by the Adjudicating Authority on 28.11.2019 and has since been implemented. The contention of the Learned Sr. Counsel appearing for the Appellant that the addendum is unfair and discriminatory and hence ought to be set aside - the submissions of the Learned Sr. Counsel for the Appellant that there are no reasons for the specific addendum to have been added in the Resolution Plan, the reason being the final Report of A M and the categorical findings of the Adjudicating Authority cannot be agreed upon. Appeal dismissed.
Issues Involved:
1. Non-admission of the Appellant's Claim by the Resolution Professional. 2. Approval of the Resolution Plan by the Adjudicating Authority. 3. Allegation of extortionate and fraudulent transactions. 4. Commercial Wisdom of the Committee of Creditors (CoC). 5. Implementation of the Resolution Plan and the addendum. Detailed Analysis: 1. Non-admission of the Appellant's Claim by the Resolution Professional: The Appellant, 'Connect Residuary' Private Limited, filed MA 01/2019 seeking to set aside the Resolution Professional's (RP) action of not admitting their claim of Rs. 25,52,08,897/- as an Operational Creditor. The RP rejected the claim on the grounds of insufficient documentation, overpayment by 'Ricoh India', and untraceable equipment. The RP's decision was based on the findings of Alvarez & Marshal India Private Limited (A&M), which indicated that the transactions were extortionate and fraudulent. 2. Approval of the Resolution Plan by the Adjudicating Authority: The Adjudicating Authority approved the Resolution Plan on 28.11.2019, which included an addendum stating that even if the Appellant's claim was later admitted, the payment would be NIL. The Appellant contested this, arguing that the addendum was unfair and discriminatory. However, the Supreme Court upheld the approval of the Resolution Plan, emphasizing the importance of the CoC's commercial wisdom. 3. Allegation of Extortionate and Fraudulent Transactions: The RP and A&M's investigation concluded that the transactions between 'Connect Residuary' and 'Ricoh India' were extortionate. The Adjudicating Authority dismissed the Appellant's application, agreeing with the RP's findings that the transactions were extortionate, preferential, and fraudulent. The Supreme Court supported this conclusion, noting that the RP had dutifully identified the avoidance transactions as required under Section 25(2)(j) of the Code. 4. Commercial Wisdom of the Committee of Creditors (CoC): The CoC approved the Resolution Plan with a majority of 84.36%, exercising their commercial wisdom. The Supreme Court reiterated that the CoC's decisions are non-justiciable except in cases of material irregularity or error apparent on the face of the record. The Court found no such irregularity in this case, thereby upholding the CoC's decision. 5. Implementation of the Resolution Plan and the Addendum: The Resolution Plan, including the addendum, was implemented, and the Board of 'Ricoh India' was reconstituted. The Supreme Court confirmed the validity of the addendum, which provided NIL payment to the Appellant even if their claim was later admitted. The Court emphasized that the Appellant was never included in the Creditors List, and thus, there was no discrimination. Conclusion: The Appeals were dismissed, and the Adjudicating Authority's decision, supported by the Supreme Court, was upheld. The Resolution Plan, including the addendum, was confirmed, and the Appellant's claim was not admitted due to the extortionate nature of the transactions. The CoC's commercial wisdom was respected, and the implementation of the Resolution Plan was deemed final and binding.
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