2023 (12) TMI 1148 - AT - Insolvency and Bankruptcy

Challenge to direction to Resolution Professional and CoC to move an application before the Hon ble Supreme Court for seeking clarification in context of the order dated 21.11.2013 passed by Hon ble Supreme Court - HELD THAT - There is no dispute that resolution plan has been approved with 100% CoC and the same has also received approval by the Adjudicating Authority by the impugned order. On looking into the order dated 21.11.2013 a direction was to Sahara Group of Companies not to part with any movable and immovable properties until further orders. Direction to Sahara group of companies not to part with movable and immovable properties can have no bearing with resolution plan submitted by Successful Resolution Applicant for consideration by the Adjudicating Authority. The order dated 21.11.2013 cannot be read as any kind of restraint order in the CIRP process of the Corporate Debtor Baghauli Sugar Distillery Ltd. Anr. which is also a Sahara group of company. The clarification which was given by the Hon ble Supreme Court by the aforesaid order clearly indicate that Hon ble Supreme Court was of the view that on the strength of the order dated 21.11.2013 no proceedings before National Consumer Dispute Resolution Commission can be stopped. Hon ble Supreme Court categorically made it clear that order dated 21.11.2013 shall not prevent the National Consumer Dispute Redressal Commission from proceeding and passing order in accordance with law. The aforesaid clarification is also relevant with regard to CIRP Process of the Corporate Debtor and the intent and purpose of the order dated 21.11.2013 is very clear as clarified in order dated 27.04.2016. The order dated 21.11.2013 passed by the Hon ble Supreme Court has no fetter in the CIRP process of the Corporate Debtor nor it can fetter the approval of the resolution plan by the Adjudicating Authority which has been approved by 100% CoC - Adjudicating Authority committed error in putting a condition in the order approving the resolution plan that Resolution Professional and CoC to obtain a clarification from the Hon ble Supreme Court with regard to order dated 21.11.2013. Appeal allowed.

Summary

Issues Involved:
1. Approval of the Resolution Plan.
2. Direction to seek clarification from the Supreme Court regarding an order dated 21.11.2013.

Summary:

Approval of the Resolution Plan:
The appeals challenged the order dated 24.11.2023 by the Adjudicating Authority (NCLT, Allahabad Bench) in I.A. No. 243 of 2023 for the approval of the Resolution Plan and I.A. No. 434 of 2023 filed by the Suspended Director of the Corporate Debtor seeking dismissal of I.A. No. 243 of 2023. The Resolution Plan was approved by 100% vote share in the 33rd CoC meeting held on 21.04.2023. The Adjudicating Authority approved the resolution plan submitted by Dalmia Bharat Sugar and Industries Limited but directed the Resolution Professional (RP) and the Committee of Creditors (CoC) to seek clarification from the Supreme Court regarding the order dated 21.11.2013 before implementing the plan.

Direction to Seek Clarification from the Supreme Court:
The main contention was whether the Adjudicating Authority was correct in directing the RP and CoC to obtain clarification from the Supreme Court regarding the order dated 21.11.2013. The Supreme Court's order restrained the Sahara group of companies from parting with any movable and immovable properties. The appellants argued that this order did not impact the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor, as it was intended to protect the assets of the Sahara group of companies and not to obstruct the CIRP. The Adjudicating Authority had previously given the Suspended Management the liberty to seek clarification from the Supreme Court, which they did not pursue.

Judgment:
The National Company Law Appellate Tribunal (NCLAT) concluded that the Supreme Court's order dated 21.11.2013 did not fetter the CIRP process or the approval of the resolution plan. The direction to seek clarification from the Supreme Court was deemed unnecessary. Consequently, the appeals were allowed, and the order dated 24.11.2023 was modified to delete the direction for seeking clarification from the Supreme Court. The rest of the Adjudicating Authority's order was affirmed. The parties were directed to bear their own costs.