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2024 (9) TMI 1254 - AT - IBCApproval of Resolution Plan - HELD THAT - The jurisdiction of Adjudicating Authority and the Appellate Tribunal to interfere with the Resolution Plan approved by the CoC, in exercise of its commercial wisdom, are well settled. The limited jurisdiction as has been recognized by the precedents of the Hon ble Supreme Court is when the Resolution Plan is in not conformity with statutory requirements of Section 30, sub-section (2) of the IBC. Thus, the jurisdiction with NCLT and Appellate Tribunal is limited to examine as to whether the Resolution Plan is in compliance with Section 30, sub-section (2), sub-clause (e) of the IBC. The part of the Resolution Plan being not in accordance with law, which has been approved by the Adjudicating Authority, the course open for this Tribunal is to either set aside the Resolution Plan or to delete the clauses, which are not in accordance with law to make the Resolution Plan compliant. The second course need to be adopted, by deleting the clauses in the Resolution Plan, which are contrary to the law, as per Section 30, sub-section (2), sub-clause (e), so as not to interfere with the other part of the Resolution Plan, which have been approved. The resolution plan modified partially. Application disposed off.
Issues Involved:
1. Validity of the Resolution Plan approval post-CIRP period expiry. 2. Valuation discrepancies of Corporate Debtor's assets. 3. Inclusion of promoters' personal properties in the Resolution Plan. 4. Claims of Homebuyers and their rejection. 5. Rights of Operational Creditors and Employees in the Resolution Plan. 6. Inclusion of third-party assets in the CIRP of the Corporate Debtor. Detailed Analysis: 1. Validity of the Resolution Plan Approval Post-CIRP Period Expiry: The Appellant argued that the Resolution Plan was approved by the CoC after the expiry of the CIRP period, citing Form H and the lack of an extension order. However, the Respondents presented orders dated 11.01.2022 and 20.06.2022, which granted an exclusion of 60 days and an additional two days, respectively. These orders extended the CIRP period to cover the date of the CoC's approval of the Resolution Plan on 13.08.2021. Thus, the Tribunal found no violation of the CIRP timeline. 2. Valuation Discrepancies of Corporate Debtor's Assets: The Appellant challenged the valuation reports, citing discrepancies and undervaluation. The Tribunal noted that two registered valuers were appointed, and their reports were shared with the CoC, which raised no objections. The Tribunal emphasized that valuation is not an exact science and upheld the valuation process, citing precedents that valuation disputes should not be entertained post-CoC approval unless there is a clear non-compliance with statutory requirements. 3. Inclusion of Promoters' Personal Properties in the Resolution Plan: The Appellant contended that personal properties of promoters were improperly included in the Resolution Plan. The Tribunal found that the properties in question were part of an integrated township project approved for the Corporate Debtor and purchased using the Corporate Debtor's funds. Thus, the inclusion of these properties in the Resolution Plan was justified. 4. Claims of Homebuyers and Their Rejection: Several homebuyers' claims were rejected by the Resolution Professional on technical grounds, such as lack of proof of payment to the Corporate Debtor. The Tribunal found that the Corporate Debtor had acknowledged these payments in allotment letters, making the rejection of claims unjustified. The Tribunal directed that these homebuyers be treated the same as other homebuyers whose claims were accepted, ensuring they receive their allotted units under the Resolution Plan. 5. Rights of Operational Creditors and Employees in the Resolution Plan: Operational Creditors and Employees argued that the amounts proposed in the Resolution Plan were unfairly low. The Tribunal noted that the amounts proposed complied with Section 30(2)(b) of the IBC, which mandates that operational creditors receive at least the liquidation value. Since no violation of this provision was demonstrated, the Tribunal upheld the amounts proposed in the Resolution Plan. 6. Inclusion of Third-Party Assets in the CIRP of the Corporate Debtor: The Tribunal found that certain third-party assets, including those of subsidiaries and related entities, were improperly included in the Resolution Plan. Citing Section 18(1)(f) and (g) of the IBC, the Tribunal held that only the assets of the Corporate Debtor could be included. It directed the exclusion of these third-party assets from the Resolution Plan to ensure compliance with the IBC. Conclusion: The Tribunal upheld the Resolution Plan with modifications to exclude improperly included third-party assets and directed the inclusion of valid homebuyers' claims. The appeals challenging the Resolution Plan on valuation grounds and the rights of operational creditors and employees were dismissed, affirming the CoC's commercial wisdom and adherence to statutory requirements.
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