2024 (8) TMI 212 - AT - Insolvency and Bankruptcy

Admissibility of Section 95 application - it is submitted that earlier the Adjudicating Authority has rejected the application by order dated 01.02.2024 which order was subsequently recalled by order dated 16.02.2024 and thereafter matter was heard again and impugned order was passed - entitlement to challenge the order dated 16.02.2024 in the appeal. Entitlement to challenge the order dated 16.02.2024 by which earlier order was recalled - HELD THAT - It was open for the Appellant to challenge the order dated 16.02.2024. The Appellant did not challenge the order of recall and participated in the hearing of the application again, in consequence of which hearing order has been delivered. The provision for filing an appeal against order of Adjudicating Autohrity is provided under Section 61 of the IBC and under Section 61(2) limitation for filing appeal is only 30 days. When appellant has not filed appeal against order dated 16.02.2024, the submission of the Appellant that he can be allowed to challenge order dated 16.02.2024 in the present appeal which is filed against order dated 14.03.2024 cannot be accepted - both the orders are separate orders and both orders need to be challenged separately in the scheme of IBC as provision under Section 61 and the submission which has been made by the Appellant cannot be accepted. Appellant s proposal for OTS has not been accepted - HELD THAT - Admittedly, in the CIRP of the Principal Borrower, the Resolution Plan has been approved, which is pending consideration before the Adjudicating Authority as communicated by letter dated 22.02.2024 - at the time of finalization of Resolution Plan of the Personal Guarantor, the Adjudicating Authority shall consider all aspects of the matter. There are no error in the order of the Adjudicating Authority admitting Section 95 application warranting any interference in exercise of appellate jurisdiction. Appeal disposed off.

Summary

Issues:
Challenge to order recalling a previous decision, Entitlement to challenge multiple orders separately, Rejection of OTS offer and Resolution Plan approval in CIRP.

Challenge to order recalling a previous decision:
The Appellant challenged the order recalling a previous decision, arguing entitlement to challenge it in the present appeal. The Tribunal noted that the Appellant did not file an appeal against the order of recall within the 30-day limitation period under Section 61 of the IBC. The Tribunal held that the Appellant cannot challenge the order recalling the previous decision in the current appeal against a subsequent order.

Entitlement to challenge multiple orders separately:
The Appellant contended that the order recalling the previous decision had merged with the subsequent order being challenged. The Tribunal clarified that both orders were separate and needed to be challenged individually under the IBC provisions. It was emphasized that the Appellant's argument of challenging both orders in a single appeal was not acceptable under Section 61 of the IBC.

Rejection of OTS offer and Resolution Plan approval in CIRP:
The Appellant's proposal for a One Time Settlement (OTS) offer was not accepted, as confirmed in a letter from the Bank. The Tribunal acknowledged the approval of the Resolution Plan in the Corporate Insolvency Resolution Process (CIRP) of the Principal Borrower. The Tribunal highlighted the need for the Adjudicating Authority to consider all aspects, including any amount received in the CIRP of the Principal Borrower, while finalizing the Resolution Plan of the Personal Guarantor. The Tribunal found no error in the Adjudicating Authority's decision to admit the Section 95 application and disposed of the appeal, subject to the observations made.

This comprehensive analysis of the judgment addresses the issues raised by the Appellant regarding the challenge to previous orders, entitlement to challenge separate orders, and the rejection of the OTS offer in light of the Resolution Plan approval in the CIRP.