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2020 (7) TMI 679 - AT - Insolvency and BankruptcyReconsideration of Resolution Plan - application of mind by Adjudicating Authority before approving or rejecting a Resolution Plan - irregularities committed by the Resolution Professional and the Committee of Creditors in applying the evaluation matrix under the guise of using the commercial wisdom to the Plan submitted by the Appellant and the successful Resolution Applicant - HELD THAT - The commercial wisdom of the CoC is paramount, and it has the absolute prerogative to decide the viability and feasibility of the Resolution Plans presented before them and the same is not to be interfered even by the Adjudicating Authority. In the present case, the CoC after evaluating both the Resolution Plan being that of STPL and IMR based on pre-disclosed evaluation criteria approved the Resolution Plan of STPL by a voting share of 95.15% and the same is duly reflected in e-voting result of 31st CoC meeting held on 11th and 12th November 2019 - in the present case, the Resolution Professional received only one Resolution Plan of STPL within the stipulated timeline which was duly recorded in the minutes of 29th CoC meeting held on 30.10.2019. After that, on 07.11.2019, unsuccessful Resolution Applicant IMR approached the R.P. expressing its interest to submit a Resolution Plan, though the period of submission was already expired on 30.10.2019. The Appellant cannot question the commercial wisdom of the CoC in rejecting the Resolution Plan, with the requisite majority and in approving the Resolution Plan of SPTL. No material irregularity in Corporate Insolvency Resolution Process before the R.P. has been demonstrated - the impugned order has been passed on proper Application of mind. The Impugned Order regarding approval of Resolution Plan need not be interfered - appeal dismissed.
Issues:
1. Challenge to the Impugned Judgment dated 30th January, 2020 passed by NCLT Cuttack Bench in CA (IB) No. 160/CTB/2019. 2. Failure of the Adjudicating Authority to exercise power under Section 31 of the Code. 3. Allegations of irregularities in the evaluation matrix by the Resolution Professional and Committee of Creditors. 4. Rejection of the Application by the Adjudicating Authority without providing reasons. 5. Dispute regarding the approval of the Resolution Plan of the Successful Resolution Applicant over the Appellant's Plan. 6. Non-requirement for the CoC to furnish reasons for selection or rejection of a Resolution Plan. Detailed Analysis: 1. The Appellant challenged the Impugned Judgment, alleging that the Adjudicating Authority failed to exercise its power under Section 31 of the Code. The Appellant contended that the Resolution Plan was rejected without proper consideration of irregularities in the evaluation matrix, giving undue advantage to the Successful Resolution Applicant. 2. The Appellant argued that the CoC did not accept their Resolution Plan and sought intervention for reconsideration. However, the Adjudicating Authority rejected the Application without providing reasons, leading to the Appeal. 3. The Respondent emphasized that the Resolution Applicant has no vested right for their Plan to be considered, citing legal precedents. The commercial wisdom of the CoC was highlighted as paramount, and the CoC's decision-making process was deemed non-justiciable. 4. The CoC's evaluation process, approval of the Successful Resolution Applicant's Plan, and the non-requirement for furnishing reasons for selection or rejection of a Plan were key points raised by the Respondent. 5. The Appellate Tribunal's previous judgments reinforced the limited scope of judicial review in matters of commercial wisdom of the CoC. The Tribunal reiterated that the Adjudicating Authority's powers under Section 31 are restricted to specific conditions under Section 30(2) of the Code. 6. Ultimately, the Appellate Tribunal upheld the Impugned Order, citing compliance with legal precedents and the law laid down by the Supreme Court. The Appeal was dismissed, emphasizing the non-justiciability of the CoC's commercial decisions and the absence of demonstrated irregularities in the Corporate Insolvency Resolution Process. This detailed analysis covers the issues raised in the legal judgment comprehensively, highlighting the arguments presented by both parties and the legal principles applied by the Appellate Tribunal in reaching its decision.
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