2020 (8) TMI 348 - AT - Insolvency and Bankruptcy

Resolution of Corporate Insolvency approved by the Committee of Creditors - Claim of Customs Duty and other dues after de-bonding / de-notification of SEZ unit - It is contended that the amount to be paid at the time of de-bonding/ exit from SEZ is subject to the assessment to be made by the Development Commissioner under Rule 74 of the SEZ Rules, 2016 - time limitation - HELD THAT - Section 61 of the I B Code provides for appeal against an order passed by the Adjudicating Authority under Part-II of the I B Code covering Sections 4 to 77 of the I B Code . An aggrieved person may prefer an appeal to NCLAT within 30 days. This Appellate Tribunal has been vested with powers to allow an appeal to be filed after the expiry of 30 days if it is satisfied that there was sufficient cause for not filing the appeal within the prescribed time. However, such period shall not exceed 15 days - It is by now well settled that the provisions of the Limitation Act, 1963 cannot be invoked for regulating the period of limitation governing appeals preferred under Section 61 of the I B Code which ordinarily provides a period of 30 days for preferring of an appeal by an aggrieved person qua an order passed under Part-II of the I B Code which is extendable by 15 days at the discretion of this Appellate Tribunal on sufficient cause being assigned for non-filing of appeal within the statutory period of 30 days. It is also manifestly clear that the outer limit of 45 days cannot be transgressed to enable an Appellant to maintain an appeal under this provision. If the appeal has been preferred beyond statutory period of 30 days and extended period of 15 days i.e. total 45 days, this Appellate Tribunal will have no jurisdiction to entertain such appeal. From which date the period of limitation is to be reckoned? - HELD THAT - The appeal has been preferred even 30 days beyond the extended timelines of 45 days envisaged under Section 61(2) proviso of the I B Code . It is, therefore, irrelevant as to whether the cause assigned for non-filing of the appeal within statutory period of 30 days from the date of knowledge was sufficient to warrant condonation of delay/ extension for 15 days contemplated under law as the maximum outer limit. The appeal being hopelessly time barred deserves to be dismissed on the count of limitation alone. Whether the Appellant has been able to carve out a case on merit for judicial intervention qua the impugned order? - HELD THAT - It is abundantly clear that the SEZ Act, 2005 has overriding effect and wherever the extant laws dealing with the matters dealt with under the Act are inconsistent with the provisions of the Act, the provision of the Act will prevail. In the instant case, there is no controversy on the vital aspect of the exact amount chargeable for de-notification of the unit of Corporate Debtor being determined by the Development Commissioner at the time of exit in terms of Rule 74. This is in fact admitted position and the Appellant also has admitted that the amount of ₹ 45 Crores set apart in the approved Resolution Plan for de-notification of the Corporate Debtor from SEZ is not a crystallised debt but an amount to be assessed by the Development Commissioner in exercise of its jurisdiction. Thus, it is abundantly clear that the estimated amount of ₹ 45 Crores has been set apart in the approved Resolution Plan to take care of the duties chargeable and penalties imposable by the Development Commissioner while according approval to opting out of Corporate Debtor from SEZ. Admittedly, the Resolution Applicant has applied for the de-notification of the unit of the Corporate Debtor before the Development Commissioner. Claim of Appellant amounting to ₹ 36,21,42,252/- having been rejected during the Resolution Process and the same not having been assailed by the Appellant before the Adjudicating Authority, the Appellant is not entitled to raise issue in this regard for the first time in appeal before this Appellate Tribunal. Argument advanced on this aspect is accordingly repelled - the Appellant has failed to carve out a case for judicial intervention in appeal on merits too - Appeal is barred by limitation and is dismissed.

Summary

Issues Involved:
1. Approval of the Resolution Plan.
2. Conflict with Special Economic Zone Act, 2005 and SEZ Rules, 2006.
3. Limitation period for filing the appeal.
4. Amount to be paid at the time of de-bonding/exit from SEZ.
5. Jurisdiction of the Committee of Creditors.
6. Commercial wisdom of the Committee of Creditors.
7. Rejection of Appellant’s claim during the Resolution Process.

Detailed Analysis:

1. Approval of the Resolution Plan:
A Resolution Plan submitted by the Consortium of Sri City Private Limited and KCR Enterprise LLP for resolving the Corporate Insolvency of M/s. Sai Wardha Power Generation Limited was approved by the Committee of Creditors with 75.91% voting shares. The plan involved an infusion of ?495 Crores, including ?325 Crores as working capital, to meet the immediate requirements of the Corporate Debtor’s operations. The plan provided for upfront payments to secured and unsecured Financial Creditors, Operational and other creditors, and servicing of residual surviving debt, contingent claims, and resolution costs.

2. Conflict with Special Economic Zone Act, 2005 and SEZ Rules, 2006:
The Appellant challenged the Resolution Plan on the grounds that the exemption/concession granted by the Adjudicating Authority conflicted with the SEZ Act, 2005 and SEZ Rules, 2006. Specifically, the Appellant argued that the amount to be paid at the time of de-bonding/exit from SEZ is subject to assessment by the Development Commissioner under Rule 74 of the SEZ Rules, 2016, and cannot be classified as a crystallized debt.

3. Limitation Period for Filing the Appeal:
The appeal was filed beyond the statutory period of 30 days and the extended period of 15 days, totaling 45 days, as stipulated under Section 61 of the I&B Code. The Appellant claimed to have gained knowledge of the impugned order on 23rd December 2019, but the Respondent provided evidence that the Appellant had knowledge of the order on 2nd December 2019. Therefore, the appeal was filed after 75 days, making it time-barred.

4. Amount to be Paid at the Time of De-bonding/Exit from SEZ:
The Resolution Plan allocated ?45 Crores for de-notification of the SEZ unit, which was an estimated amount subject to assessment by the Development Commissioner at the time of exit. The Appellant admitted that this amount was not a crystallized debt but an estimate to be determined upon assessment.

5. Jurisdiction of the Committee of Creditors:
The Appellant questioned the powers of the Committee of Creditors, but the Respondent argued that the Committee of Creditors' commercial wisdom reigns supreme in the resolution of distressed assets under the I&B Code, as established in the case of "Committee of Creditors of Essar Steel India Limited Through Authorised Signatory v. Satish Kumar Gupta & Ors."

6. Commercial Wisdom of the Committee of Creditors:
The Tribunal reaffirmed that the commercial wisdom of the Committee of Creditors in evaluating a Resolution Plan should prevail unless the plan conflicts with any provision of law. The approved plan, which set apart ?45 Crores as an estimated amount for de-notification, was found to be within legal parameters and did not contravene any law.

7. Rejection of Appellant’s Claim During the Resolution Process:
The Appellant’s claim amounting to ?36,21,42,252/- was rejected during the Resolution Process and was not contested before the Adjudicating Authority. Therefore, the Appellant could not raise this issue for the first time in the appeal before the Appellate Tribunal.

Conclusion:
The appeal was dismissed on the grounds of being time-barred and lacking merit. The Tribunal found no legal infirmity in the impugned order, and the amount set apart for de-notification was deemed an estimate subject to assessment by the Development Commissioner. The commercial wisdom of the Committee of Creditors in approving the Resolution Plan was upheld, and the Appellant’s challenge was rejected.