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2021 (1) TMI 977 - Tri - Insolvency and BankruptcySeeking stay on the process of finalization of the Approval of the Resolution Plan - seeking direction to Mr. B.C. Ganesh (RIO), who is common witness in all agreements should submit all Bank Statements and Income Tax Returns for last five Financial Years and disclose true identity - HELD THAT - Since the Applicant has not brought on record any fact or evidence to show that the successful Resolution Applicant falls within any of the categories of the ineligibile persons under Section 29A of the Code, the prayer made for declaring the successful Resolution Applicant as ineligible cannot be acceded to and is therefore negated.The Applicant's prayer for passing an order to consider its Resolution Plan with the consideration for ₹ 27.00 Crores when it was the H1, is against the one of the prembled objectives of the IBC 2016, namely maximisation of value of stressed assets for resolving insolvency. In fact, the Applicant itself has been submitting revised Resolution Plans for ₹ 30.20 Cr. on 15.06.2019 and for ₹ 37.21 Cr. on 25.06.2019 respectively. Further, the Applicant also participated in inter se bidding with the successful Resolution Applicant wherein the Applicant itself made a bid for ₹ 42.71 Cr. It withdrew only after the successful Resolution Applicant made a bid for ₹ 42.96Cr. Therefore, seeking a direction to consider it's Resolution Plan for ₹ 27 Cr. at this stage is both unreasonable and against the tenets of IBC 2016. Therefore, this prayer is also negated. Seeking stay on process of finalization of the approval of the Resolution Plan submitted by the R 7 till the disposal of this IA - HELD THAT - According to the provisions of IBC, 2016 once a CIRP application is admitted, it is the duty of RP to constitute CoC and thereafter publish Eol, Information Memorandum and evaluation matrix on the basis of decisions taken in CoC meetings. Thereafter, upon receipt of Eol by potential Resolution Applicants, various Resolution plans are examined by the RP and the same are put up before the CoC for deliberations about each of those plans for considering their feasibility and reliability. In this regard, it is pertinent to note here that under the provisions of the Code, the commercial wisdom of the CoC has been given paramount status without any judicial intervention. In the instant matter, the CoC have approved the Resolution Plan submitted by the successful Resolution Applicant as per their commercial wisdom in terms of Section 30(4) and the same is pending before this Adjudicating Authority for determination under Section 31 of the Code - the Applicant's prayer for staying the process of approval/determination of the CoC approved Resolution Plan by this Adjudicating Authority cannot be acceded to. Application dismissed as not maintainable.
Issues Involved:
1. Allegations of bias and favoritism against CoC Members and RP. 2. Eligibility of the successful Resolution Applicant. 3. Consideration of the Applicant's Resolution Plan. 4. Stay on the finalization process of the Resolution Plan. Detailed Analysis: 1. Allegations of Bias and Favoritism: The Applicant alleged bias and favoritism by the CoC Members and the RP, particularly against R1, R7, R8, R9, and R10. The allegations were based on supposed connections between R1 and R7, with R10 acting as a common witness in various agreements. The Tribunal noted that R10 was not an employee of R7 during the relevant period and cited the Supreme Court's decision in Smt. Chandrakantaben Etc vs. Vadilal Bapalal Modi & Others, which states that an attesting witness is not presumed to be aware of the document's contents. Thus, the allegations of bias and favoritism were not substantiated. 2. Eligibility of the Successful Resolution Applicant: The Applicant sought to declare R7 as ineligible based on alleged connections with R1. However, the Tribunal found no evidence that R7 fell under any of the disqualifications listed in Section 29A of the IBC. The Tribunal emphasized that any person, either singly or jointly, may submit a resolution plan unless specifically excluded under Section 29A. Since no such evidence was provided, the prayer to declare R7 ineligible was rejected. 3. Consideration of the Applicant's Resolution Plan: The Applicant requested that its Resolution Plan for ?27 Crores be considered, arguing that it was the H1 bidder at one point. The Tribunal highlighted that the objective of IBC 2016 is the maximization of value. The Applicant itself had submitted revised plans for higher amounts and participated in inter-se bidding, eventually withdrawing when R7 bid ?42.96 Crores. The Tribunal found the request to consider the ?27 Crores plan unreasonable and contrary to the IBC's objectives, thus rejecting this prayer. 4. Stay on the Finalization Process: The Applicant sought a stay on the finalization of the approval of R7's Resolution Plan. The Tribunal noted that once a CIRP application is admitted, the RP and CoC follow a structured process involving the publication of EoI, evaluation of plans, and voting by the CoC. The Tribunal cited the Supreme Court's ruling in K. Sashidhar vs. Indian Overseas Bank & Ors., which underscores the paramount status of the CoC's commercial wisdom without judicial intervention. The Tribunal also referenced the Arcelor Mittal India Pvt Ltd vs. Satish Kumar Gupta case, which states that a resolution applicant has no vested right for their plan to be considered and that challenges can only be made post-approval by the Adjudicating Authority. Consequently, the prayer for a stay was denied. Conclusion: The Tribunal dismissed the Application as not maintainable, emphasizing that the commercial wisdom of the CoC is paramount and not subject to judicial intervention at this stage. The Applicant's allegations were not substantiated, and their prayers for declaring R7 ineligible, considering their ?27 Crores plan, and staying the finalization process were all rejected. No order as to costs was made.
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