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2024 (11) TMI 62 - AT - IBCJurisdiction of Adjudicating Authority in cancelling a General Power of Attorney (PoA), a registered instrument - scope of residuary jurisdiction - approval of Resolution plan - HELD THAT - On noticing the relevant clauses of the Development Agreement and the Power of Attorney executed in favour of the Appellant, it is amply clear that the Appellant in the PoA was nothing but nominee of the corporate debtor and Appellant being suspended director of the corporate debtor was treated as nominee of the corporate debtor for the purpose of facilitating the developers. The developers being corporate debtor, PoA was not executed in an individual capacity of the appellant nor gave any right to the subject land. When the Resolution Plan submitted by the SRA is approved and the corporate debtor is being taken over by the SRA, the development of property and all other steps as per the Resolution Plan has to be taken by the SRA - Appellant who was contemplated to extend its co-operation as nominee of the corporate debtor in developing the property is now taken a stand to create obstacles in revival of the corporate debtor to carry out function by the SRA who now takes over the corporate debtor after approval of the Resolution Plan. Hon ble Supreme Court in GUJARAT URJA VIKAS NIGAM LIMITED VERSUS MR. AMIT GUPTA AND ORS. 2021 (3) TMI 340 - SUPREME COURT has held that the residuary jurisdiction conferred by statute may extend to matters which are not specifically enumerated under a legislation. When PoA which was given for a particular purpose to the Appellant as nominee of the corporate debtor and Resolution Plan is approved by the CoC of the corporate debtor, the approval of the Resolution Plan is in commercial wisdom of the CoC and in event, the Resolution Plan declare the PoA which was given in favour of the Appellant as nominee of the corporate debtor as cancelled, the said clause of the Resolution Plan cannot be allowed to be challenged by the Appellant nor Appellant was given any rights in the subject property so as to assert any right. The endeavour of the Appellant is nothing but creating obstacles in revival of the corporate debtor in which he was suspended director - the imposition of cost of Rs.1 lakh that application was filed by the Appellant is nothing but a vexatious and dishonest attempt. Approval of Resolution Plan - Appellant referring to Clause 8.4 of the Resolution Plan sought to contend that the Resolution Plan was conditional and contingent which could not have been approved - HELD THAT - The law is well settled that the Resolution Plan which is approved by the CoC cannot be allowed to be withdrawn and any clause which contemplate withdrawal of the plan is unenforceable. Law in this case is settled by the Hon ble Supreme Court in EBIX SINGAPORE PRIVATE LIMITED VERSUS COMMITTEE OF CREDITORS OF EDUCOMP SOLUTIONS LIMITED ANR., KUNDAN CARE PRODUCTS LIMITED VERSUS MR AMIT GUPTA AND ORS. AND SEROCO LIGHTING INDUSTRIES PRIVATE LIMITED VERSUS RAVI KAPOOR RP FOR ARYA FILAMENTS PRIVATE LIMTIED ORS. 2021 (9) TMI 672 - SUPREME COURT . In view of the clarification issued by the Hon ble Supreme Court, the submission advanced on the basis of clause 8.4 by the Appellant terming the Resolution Plan as un-implementable and conditional cannot be accepted. Present is not a case where any violation of Section 30(2) has been even alleged by the Appellant. The Hon ble Supreme Court has laid down time and again that the jurisdiction of the NCLT and NCLAT is limited jurisdiction to see as to whether the Resolution Plan is in compliance of Section 30(2). Judgment of the Hon ble Supreme Court in K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS 2019 (2) TMI 1043 - SUPREME COURT is referred. Appellant has not been able to point out any other ground on the basis of which approval of the Resolution Plan can be faulted. There are no ground to interfere with the order dated 09.08.2024 passed by the Adjudicating Authority approving the Resolution Plan submitted by the Respondent No.2 - there are no merit in the appeals. Appeal dismissed.
Issues Involved:
1. Jurisdiction of Adjudicating Authority in cancelling a General Power of Attorney (PoA). 2. Validity of the Resolution Plan and its conditional nature. 3. Rights and obligations under the Development Agreement and PoA. Issue-wise Detailed Analysis: 1. Jurisdiction of Adjudicating Authority in cancelling a General Power of Attorney (PoA): The primary contention raised by the Appellant was that the Adjudicating Authority lacked jurisdiction to cancel the General Power of Attorney executed in favor of Mr. Dharmesh Jain and Mrs. Anju Jain. The Appellant argued that the cancellation of a registered instrument was beyond the competence of the Adjudicating Authority and could only be done by a Civil Court. The Adjudicating Authority, however, held that the PoA was executed to facilitate the corporate debtor in development activities and was not meant to confer any rights to the Appellant in the subject land. It was concluded that the PoA had served its purpose and could be deemed ineffective in the context of the approved Resolution Plan. The Tribunal also emphasized that the PoA was executed in the capacity of a nominee of the corporate debtor and not in the Appellant's individual capacity. The Tribunal's jurisdiction to approve the Resolution Plan, which included the cancellation of the PoA, was upheld, citing the overarching powers under the Insolvency and Bankruptcy Code (IBC) to ensure effective implementation of the Resolution Plan. 2. Validity of the Resolution Plan and its conditional nature: The Appellant challenged the Resolution Plan, arguing that it was conditional and contingent upon approvals from third parties, particularly concerning the eco-sensitive zone status of the land. The Tribunal, however, noted that the condition regarding the eco-sensitive zone had been addressed and satisfied, as clarified by the Hon'ble Supreme Court. The Tribunal further referenced the Supreme Court's judgment in "Ebix Singapore Pvt. Ltd. vs. Committee of Creditors of Educomp Solutions Limited," which established that a Resolution Plan, once approved, cannot be withdrawn and any clause permitting such withdrawal is unenforceable. The Tribunal found no merit in the Appellant's claim that the Resolution Plan was conditional, as the necessary clarifications had been obtained, rendering the plan implementable. 3. Rights and obligations under the Development Agreement and PoA: The Development Agreement between Ralliwolf and the Corporate Debtor granted the latter development rights over the property. The PoA was executed to enable the developers to carry out development activities and was not intended to transfer any property rights to the Appellant. The Tribunal noted that the Appellant, as a nominee of the corporate debtor, was not entitled to any rights in the subject land. The Tribunal emphasized that the PoA was a facilitative instrument for development purposes and did not confer any enduring rights to the Appellant. The Tribunal also highlighted that the Appellant had not demonstrated any actions taken under the PoA to substantiate any claims of rights or interests. The Tribunal concluded that the PoA was a "dead document" and its cancellation was a necessary step for the effective implementation of the Resolution Plan. Conclusion: The Tribunal dismissed both appeals, affirming the Adjudicating Authority's orders. It held that the Appellant's challenges were unfounded and primarily aimed at obstructing the revival of the corporate debtor. The Tribunal imposed costs on the Appellant for filing a vexatious and dishonest application, reinforcing the principle that the IBC process is aimed at ensuring the revival of viable companies and should not be hindered by baseless claims.
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