2023 (3) TMI 1282 - AT - Insolvency and Bankruptcy

Approval of Resolution Plan - actions of the Resolution Professional and the CoC are consistent with the NCLAT order or not - HELD THAT - On looking into order dated 18.01.2023 passed by this Tribunal, it is clear that this Tribunal directed the Resolution Professional to initiate fresh voting process on the Resolution Plans received in the process which was to be completed within a month. The Adjudicating Authority has noticed that in pursuance of the order dated 18.01.2023, all the Resolution Plans were put before the CoC in its meeting dated 25.01.2023 and voting result was declared in its meeting dated 10.02.2023 where all plans were rejected by voting share of 89.10% and it was decided by the CoC to issue fresh RFRP. Consideration of all Resolution Plans and voting on the plans by the CoC as per direction of this Tribunal dated 18.01.2023 cannot be said to be non-compliance of order of this Tribunal. When none of the Resolution Plans was approved, the CoC under the CIRP Regulations was empowered to issue fresh RFRP. There are no error in the order of the Adjudicating Authority refusing the prayers of the Appellant to reissue RFRP and reinitiate the voting process. The present Appeal arise out of the order dated 20.02.2023 by which I.A. No. 602/2023 was rejected, by which Appellant was challenging the RFRP issued on 10.02.2023. Subsequent events which took place after 10.02.2023 are not subject matter of this Appeal and needs no consideration by this Tribunal. Learned counsel for the Appellant submitted that Resolution Professional has already filed an I.A. No. 791/2023 before the Adjudicating Authority for approval of a Resolution Plan. It is open for the Appellant to file an appropriate application/objection in I.A. No. 791/2023, the issues raised by the Appellant subsequent to 10.02.2023 need no consideration. Appeal dismissed.

Summary

Issues Involved:
The judgment involves the issues of compliance with directions of the National Company Law Appellate Tribunal (NCLAT) regarding voting on resolution plans, issuance of fresh Request for Resolution Plan (RFRP), and approval of resolution plans during the Corporate Insolvency Resolution Process (CIRP).

Issue 1: Compliance with NCLAT Directions on Voting Process:
The Appeal was filed against the order dismissing I.A No. 602 of 2023, challenging the RFRP issued by the Resolution Professional (RP) and the Committee of Creditors (CoC). The background facts include the initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor 'Mittal Corp. Ltd.' and the subsequent submission of Resolution Plans by the Appellant and 'Shyam Sel and Power Limited' ('SSPL'). The CoC decided to put all plans for voting, leading to the challenge process and subsequent rejection of all plans, followed by the issuance of fresh RFRP on 10.02.2023.

Issue 2: Approval of Resolution Plans and Denial of Participation:
The Appellant contended that the CoC hurriedly approved a resolution plan favoring a specific Resolution Applicant, denying the Appellant's right to participate in the process. The Appellant argued that the CoC should not have proceeded with plan approval while the challenge to the RFRP was pending. The Resolution Professional filed an application seeking approval of 'SSPL's plan, and the Appellant raised concerns about the assignment of debt by Financial Creditors during the process.

Issue 3: Adjudicating Authority's Decision and Compliance with NCLAT Order:
The Adjudicating Authority's order dated 20.02.2023 was challenged in the Appeal, alleging non-compliance with the NCLAT order directing fresh voting on resolution plans. The Adjudicating Authority found that the actions of the RP and CoC were consistent with the NCLAT order, allowing the CoC to issue fresh RFRP when none of the plans were approved. The Appellant's failure to submit a plan after the fresh RFRP was issued was noted, and subsequent events post-10.02.2023 were deemed outside the scope of the present Appeal.

Conclusion:
The Tribunal upheld the Adjudicating Authority's decision, stating that the CoC's consideration of all resolution plans and issuance of fresh RFRP were in compliance with the NCLAT order. The Appellant's lack of participation after the fresh RFRP issuance was highlighted, and it was clarified that subsequent events were not part of the Appeal. The Appellant was advised to address concerns in a separate application, and the Appeal was dismissed, leaving further actions to the Adjudicating Authority's discretion.