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2024 (11) TMI 1010 - AT - Companies LawLiquidation of Corporate Debtor - seeking for issue of an appropriate direction to the liquidator to put on hold the auction of the immovable asset of the Corporate Debtor, to consider his proposal to sell the Corporate Debtor as a going concern - It is the contention of the Appellant that his Resolution Plan was rejected without due diligence - principles of res-judicata - HELD THAT - This Application came up for consideration before the Learned Adjudicating Authority and the Learned Adjudicating Authority after considering the text of the relief sought in IA No.140/2022, had dismissed by observing that it was on the same grounds / prayers the Appellant had already approached before the NCLAT by filing IA No.436/2021 in CA (AT) (CH) (Ins) No.314/2020 which has been rejected, that the relief as sought for in IA No.140/2022 has already been denied by the NCLAT while deciding IA No.436/2021, that, the Appellant has suppressed the material fact regarding the orders passed on IA No.436/2021 in CA (AT) (CH) (Ins) No.314/2020, and therefore, the relief as it was sought for in IA No.140/2022 would not be tenable owing to the bar created by the decision taken on IA No.436/2021 preferred in CA (AT) (CH) (Ins) No.314/2020. Apart from the aforesaid reason, the Learned Adjudicating Authority has concluded that the relief sought for by the applicant by invoking the provisions contained under section 60(5) of the Insolvency and Bankruptcy Code, 2016 to be read with Rule 11 of the NCLT Rules cannot be granted to the Appellant for the following reasons. (1) The Resolution Plan which was submitted by the Appellant was already rejected. (2) The Application filed for modification of the Resolution Plan also stood rejected vide Order dated 30.12.2019. (3) More importantly, the two orders affirming the rejection of the Resolution Plan was not challenged by the Appellant by invoking the provisions contained under Section 61 of the Insolvency and Bankruptcy Code, 2016 and the same would attain finality, against the Appellant. (4) Once the rejection of the Resolution Plan submitted by the Appellant had attained finality no cause of action would survive qua the Appellant for filing this instant Appeal as against the order passed in IA No.140/2022. Besides this, the relief itself as prayed for would be barred by the principle of Res judicata because the same already stood denied by the NCLAT vide its order dated 20.09.2021 passed in IA No.436/2021. In view of the above and primarily on the ground that in the absence of the challenge given to the order of rejection of the Resolution Plan submitted by him, the Appellant relinquishes his right to put a question to an order of appointment of liquidator, as well as, to seek for the relief he has sought in IA No.140/2022, which is the subject matter of Comp App (AT) (CH) (Ins) No.329/2022. For the aforesaid reasons, this Appeal too would stand dismissed.
Issues Involved:
1. Challenge to the liquidation order of the Corporate Debtor. 2. Rejection of the Appellant's Resolution Plan. 3. Consideration of the Appellant's proposal to sell the Corporate Debtor as a going concern. 4. Application of principles of Res Judicata and finality of orders. Issue-wise Detailed Analysis: 1. Challenge to the Liquidation Order: The Appellant challenged the order dated 30.12.2019 passed by the National Company Law Tribunal (NCLT), Bengaluru Bench, which directed the liquidation of the Corporate Debtor. The Appellant argued that the liquidation was ordered without due diligence and without considering the Appellant's efforts to submit a viable Resolution Plan. The Tribunal noted that the liquidation order was passed after the Committee of Creditors (CoC) recommended liquidation due to the rejection of the Appellant's Resolution Plan. The Tribunal further observed that the liquidation process had progressed, with assets already auctioned and proceeds settled with claimants, rendering the appeal moot. 2. Rejection of the Appellant's Resolution Plan: The Appellant's Resolution Plan was rejected by the CoC due to several deficiencies and failure to comply with the requirements, including furnishing a Performance Bank Guarantee and offering sufficient upfront payment. The Appellant contended that the objections raised were hyper-technical and that the revised plan met the requirements of the Insolvency and Bankruptcy Code, 2016. However, the CoC, after several rounds of communication, found the plan untenable and recommended liquidation. The Tribunal upheld the CoC's decision, noting that the Appellant did not challenge the orders rejecting the revised Resolution Plan, thus allowing them to attain finality. 3. Consideration of the Appellant's Proposal to Sell as a Going Concern: In a separate appeal, the Appellant sought to stay the auction of the Corporate Debtor's immovable assets and requested consideration of his proposal to sell the Corporate Debtor as a going concern. The Tribunal dismissed this appeal, noting that the relief sought had already been denied in a previous application (IA No.436/2021) and that the Appellant failed to challenge the rejection of the Resolution Plan, which had attained finality. The Tribunal emphasized that without challenging the earlier orders, no cause of action survived for the Appellant. 4. Application of Principles of Res Judicata and Finality of Orders: The Tribunal applied the principle of Res Judicata, highlighting that the relief sought by the Appellant had already been adjudicated and denied in earlier proceedings. The Tribunal stressed that the Appellant's failure to challenge the orders rejecting the Resolution Plan and subsequent applications led to their finality, barring any further claims. The Tribunal concluded that without a challenge to these orders, the Appellant had no standing to contest the liquidation process or seek alternative reliefs. In conclusion, both appeals were dismissed due to the finality of previous orders, the progression of the liquidation process, and the application of Res Judicata. The Tribunal found no merit in the Appellant's claims, emphasizing the importance of timely challenges to adverse decisions in insolvency proceedings.
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