2024 (9) TMI 1422 - AT - IBC

Approval of the Resolution Plan - rejection of the application to allow submission of a revised Resolution Plan - violation of the Principle of Natural Justice - HELD THAT - From the Minutes of the 9th CoC Meeting held on 15.12.2023, as quoted above, it is clear that CoC on 15.12.2023, considered both the Resolution Plan i.e., Resolution Plans submitted by M/s. Saverni Neutech Pvt. Ltd. as well as the SRA M/s. Trinity India Forgetech Pvt. Limited. Resolution Plan of M/s. Trinity India Forgetech Pvt. Ltd. was approved with 92.87% vote shares and Resolution Plan of M/s. Saverni Neutech Pvt. Ltd. was disapproved by 92.87%, vote shares and the Plan which was earlier submitted by M/s. Saverni Neutech Pvt. Ltd. has considered and rejected. There is no occasion for M/s. Saverni Neutech Pvt. Ltd. to pray for further revised Resolution Plan when it failed to file Resolution Plan, according to its own case within the time allowed as it reflected from the email dated 18.12.2023 sent by the Appellant themselves. Adjudicating Authority did not commit any error in rejecting the Application I.A. No.124/2024 filed by Sandeep Jayantilal Vadodria. Insofar as the Appeal filed by the Prem Trading Company, one of the contentions raised is that Prem Trading Company who was Financial Creditor having 2.48%, vote shares was not permitted to vote. Suffice it to say that Authorised Representative of the Appellant Prem Trading Company, Rakesh Patel was present in the CoC Meeting, which is recorded in the Minutes - It has been noted that Rakesh Patel has voted only on the agenda 1, 6, 7 8, and thereafter he exited, he having participated in the EOI process as co- Resolution Applicant in M/s. Saverni Neutech Pvt. Ltd. and Rakesh Patel who was Authorised Representative of Financial Creditor was participating in EOI. He was rightly not permitted to vote. He rightly exited from the voting which was held on Item No. 2. In any view of the matter, vote share of the Prem Trading Company is only 2.48% and vote share for Prem Trading Company was not considered in favour of the approval of the Plan and the Plan was approved by 92.87% vote shares of HDFC Bank Ltd. the largest Financial Creditor. There are no merit in the Appeal filed by Prem Trading Company. In the CoC Meeting held on 15.12.2023, Prem Trading Company was represented by its Authorised Representative and the grounds which are sought to be raised in the Appeal are without any substance. Appeal dismissed.

Summary

Issues Involved:

1. Approval of the Resolution Plan by the Resolution Professional (RP)
2. Rejection of the application to allow submission of a revised Resolution Plan
3. Voting rights of a Financial Creditor

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan by the Resolution Professional (RP):

The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Adico Forge Pvt. Ltd., commenced on 23.06.2023. Two Resolution Plans were received: one from M/s. Saverni Neutech Pvt. Ltd. and another from M/s. Trinity India Forgetech Pvt. Ltd. The Committee of Creditors (CoC) held multiple meetings to discuss and extend deadlines for the submission of revised plans. By 15.12.2023, M/s. Saverni Neutech Pvt. Ltd. did not submit a revised plan. The CoC considered both plans and concluded that the plan from M/s. Saverni Neutech Pvt. Ltd. was not feasible and viable, disapproving it with 92.87% vote shares, while approving the plan from M/s. Trinity India Forgetech Pvt. Ltd. with the same percentage of votes. The RP subsequently filed an application for the approval of the Resolution Plan of M/s. Trinity India Forgetech Pvt. Ltd., which was allowed by the Adjudicating Authority.

2. Rejection of the application to allow submission of a revised Resolution Plan:

M/s. Saverni Neutech Pvt. Ltd. requested a refund of the Earnest Money Deposit (EMD) on 18.12.2023, acknowledging their failure to submit the revised plan on time. Subsequently, they filed an application (I.A. No. 124/2024) on 30.12.2023, seeking permission to submit a revised Resolution Plan. The Adjudicating Authority, on 01.01.2024, directed the RP to consider the plan, leading to a CoC meeting scheduled for 05.01.2024. However, on 05.01.2024, the Adjudicating Authority ordered the RP not to conduct the CoC meeting for considering any fresh Resolution Plan, noting confusion during the 01.01.2024 hearing. This order superseded any oral directions given earlier. The Adjudicating Authority ultimately rejected I.A. No. 124/2024, emphasizing that the CoC had already approved the plan from M/s. Trinity India Forgetech Pvt. Ltd. on 15.12.2023, and M/s. Saverni Neutech Pvt. Ltd. had no locus to file a new application after the plan's approval.

3. Voting rights of a Financial Creditor:

The appellant, Prem Trading Company, a Financial Creditor with a 2.48% vote share, claimed they were not permitted to vote in the meeting held on 15.12.2023. The representative, Rakesh Patel, was not allowed to vote due to a conflict of interest, as he was a co-Resolution Applicant. The Adjudicating Authority noted that Rakesh Patel participated in the meeting and voted on specific agenda items but exited before voting on the Resolution Plans. The CoC, led by HDFC Bank Ltd. with 92.87% vote shares, approved the plan from M/s. Trinity India Forgetech Pvt. Ltd. The Adjudicating Authority found no merit in the appeal filed by Prem Trading Company, affirming that the representative was rightly excluded from voting due to the conflict of interest.

Conclusion:

The Appellate Tribunal upheld the Adjudicating Authority's decision to approve the Resolution Plan of M/s. Trinity India Forgetech Pvt. Ltd. and reject the application to allow M/s. Saverni Neutech Pvt. Ltd. to submit a revised plan. The Tribunal also dismissed the appeal regarding the voting rights of Prem Trading Company, affirming that the exclusion was justified due to the conflict of interest. Both appeals were dismissed, and the Tribunal found no error in the orders passed by the Adjudicating Authority.