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2024 (1) TMI 1164 - AT - Insolvency and BankruptcyCIRP - Rejection of Application seeking intervention - Locus to file application - infringement of rights - Approval of resolution plan (offer) of another party - HELD THAT - The impugned order of the Adjudicating Authority clearly indicates that Adjudicating Authority proceeded to consider the objections raised by the Appellant to the process under which RP and CoC has approved the offer submitted by Respondent No.2. The Adjudicating Authority proceeded to examine the said contention on merits and has rejected the same by the impugned order. The fact that Adjudicating Authority proceeded to examine the contentions raised by the Appellant on merits itself indicate that objections raised by the Appellant required consideration. The Adjudicating Authority proceeding to examine the objections on merits and thereafter saying that Appellant has no locus is a contradiction in itself. On looking into the facts and sequence of events, the Appellant has submitted offer after receipt of EOI and RFRP for Resolution Plan. The Appellant also revised its offer and had negotiation with CoC and RP, which is a fact established from the record. The RP and CoC interacted with the Appellant in respect of its offer and it appears that on the basis of the offer submitted by the Appellant Right of First Refusal was exercised by Respondent No.2 and consequently offer was received Company Appeal (AT) (Insolvency) No.1650 of 2023 10 from Respondent No.2, which find favour by the CoC. The Appellant, who participated in the process cannot be said to be a person having no locus to object the Application filed by the RP for approval of offer submitted by Respondent No.2. Appeal disposed off.
Issues Involved:
1. Locus Standi of the Appellant 2. Intervention in the Corporate Insolvency Resolution Process (CIRP) 3. Approval of Offer by Respondent No.2 Summary: 1. Locus Standi of the Appellant: The primary issue was whether the Appellant had the locus standi to file the Intervention Application (IA No.3363 of 2023) in IA No.2787 of 2023. The Adjudicating Authority initially held that the Appellant had no locus in the matter and that none of its rights were infringed. However, the Appellate Tribunal found this contradictory as the Adjudicating Authority had examined the objections raised by the Appellant on merits. The Tribunal concluded that the Appellant, having participated in the process and having submitted multiple offers, indeed had the locus to object to the Application filed by the Resolution Professional (RP) for approval of the offer submitted by Respondent No.2. 2. Intervention in the Corporate Insolvency Resolution Process (CIRP): The Appellant sought to intervene in the CIRP of the Corporate Debtor, arguing that it had submitted three offers in response to the Expression of Interest (EOI) and had engaged in negotiations with the RP and the Committee of Creditors (CoC). The Appellant contended that the process adopted by the RP and CoC in approving the offer of Respondent No.2 was contrary to the Insolvency and Bankruptcy Code (IBC) and Regulations. The Tribunal found that the Appellant had sufficient interest in the proceedings and should have been permitted to intervene and file objections/affidavits. 3. Approval of Offer by Respondent No.2: The RP had filed an Application for the approval of the offer submitted by Respondent No.2, which was allegedly not included in the list of prospective Resolution Applicants. The Appellant argued that this was contrary to the process under IBC and Regulations. The Tribunal noted that the Appellant's offer was contingent on the Right of First Refusal (ROFR) by Respondent No.2, and thus, the Appellant had every right to object to the proceedings. The Tribunal directed that the Appellant be given an opportunity to file objections and that the Adjudicating Authority should consider and decide the issues afresh after hearing both parties. Conclusion: The Appeal was disposed of with directions to the Adjudicating Authority to allow the Appellant to file objections/affidavits and to decide the Application (IA No.2787 of 2023) afresh, considering the submissions of all concerned parties. The Tribunal made it clear that the observations made in the impugned order on merits should not be treated as final expressions of opinion.
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