Rejection of Resolution Plan Submitted After The Time Fixed For Its Submission

[Mr. M. GOVINDARAJAN]

In the Corporate Insolvency Resolution Process, the Resolution Professional (‘RP’ for short) is to invite applications from the eligible resolution applicants in Form G stipulating the last date and time by which the applications are to be submitted.  Section 30(1) of the Insolvency and Bankruptcy Code, 2016 provides that a resolution applicant may submit a resolution plan along with an affidavit stating that he is eligible under section 29A to the resolution professional prepared on the basis of the information memorandum.  If the resolution plan is not received by the RP in time the same may be rejected by him without putting the same before the Committee of Creditors for its consideration.

In MR. SANDEEP GUPTA VERSUS RAJIV BAJAJ FOR THE APPELLANT: MR. KARAN GANDHI, MS. - 2024 (10) TMI 828 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI-LB, the Corporate Insolvency Resolution Process was initiated against the Corporate Debtor Diamond IT Infracon Private Limited and the same was admitted by the Adjudicating Authority on 03.01.2023.  Form G was published on 06.03.2023 by the RP.  Five expression of interests, including from the appellant, were received by the RP.  The eligible Resolution applicants were requested to furnish the resolution plan.  The time for submission of resolution plan was to be filed before 17.00 hours on 27.05.2023.  The RP sent the information memorandum and request for resolution plan to the appellant on 26.04.2023.  The last date was further extended by the decision of the Committee of Creditors to 03.06.2023 before 17.00 hours.  The time extension was communicated to all Prospective Resolution Applicants by Resolution Professional on 26.05.2024 that the CoC in its meeting dated 26.05.2023 has extended the time from 27.05.2023 till 03.06.2023. 

On 03.06.2023 the RP left his office at 05.00 pm.  The appellant could not able to file the resolution plan within the time limit.  The employee of the appellant reached the office of the RP at 06.00 pm.  Since the RP was not there the employee sent a WhatsApp messages to the RP at 06.00 pm informing the RP that he has reached the office of RP to submit the resolution plan of the appellant.  The RP informed the employee that he has left the office at 05.00 pm.  The appellant submitted the resolution plan to RP through email on 03.06.2023 after 05.00. In the said mail the appellant informed the RP that the hard copy of the resolution plan and demand draft of Rs.50 lakhs has already been submitted in his office.   The RP replied the appellant on 04.06.2023 to his email stating that the employee of the appellant reached his office at 06.00 pm that ie beyond the time prescribed for submission of the resolution plan and therefore he could not accept the same.   The appellant sent the hard copy of the resolution plan through courier on 04.06.2023.  The same has not been considered.

The appellant filed a petition in IA before the Adjudicating Authority with the prayer seeking for the admission of the resolution plan submitted by him and which was rejected by the RP.  The said petition was rejected by the Adjudicating Authority vide their order dated 17.07.2023.

Being aggrieved against the order of the Adjudicating Authority the appellant filed the present appeal before the National Company Law Appellate Tribunal.  The appellant contended that there was no time prescribed for submission and Resolution Professional could have submitted before 12:00 PM.  The Committee of creditors is willing to consider the Resolution Plan of the Appellant.

The RP submitted the following before the Adjudicating Authority-

• The Committee of Creditors considered the Resolution Plan of SVIP Reality Private Limited but in the 8^th Committee of Creditors meeting held on 04.09.2023 plan has been rejected.
• The Committee of Creditors approved the liquidation of the Corporate Debtor.
• The RP filed the IA No. 5123/2023 under Section 33(2) of Insolvency and Bankruptcy Code, 2016 seeking liquidation of the Corporate Debtor.

The National Company Law Appellate Tribunal considered the submissions of both the parties and also the relevant records before it.  The National Company Law Appellate Tribunal saw no reason for consideration of Resolution Plan at this stage. Resolution Plan having not been submitted by the Appellant within time prescribed and the Committee of creditors having considered the Resolution Plan which was received in time and has decided to reject the plan and given approval for liquidation. No relief can be granted to the Appellant as prayed in the appeal. The National Company Law Appellate Tribunal found no merit in the appeal and therefore dismissed the appeal.