2021 (3) TMI 629 - AT - Insolvency and Bankruptcy

Seeking approval of Resolution Plan - non-compliant as regard the mandate of Section 30(2) of the Code, 2016 - HELD THAT - Section 61(1) authorizes any person aggrieved by the order of Adjudicating Authority under this part can prefer an appeal before the Appellate Tribunal - The part here refers to Part -II of the Code which comprises CIRP and Liquidation Process. Here what we observed that any person aggrieved comprises of stakeholders in the process of CIRP and Liquidation Process. The Appellant is stranger to the CIRP till 11th June, 2020. On 12.06.2020 the Appellant for the first time expressed its interest to submit a Resolution Plan for the Asian Colours Coated Ispat Ltd, this email was marked to all CoC members. No financial proposal was provided in the said letter. RP issued Form G initially on 01.10.2018, revised on 14th December 2018. EoI was received from 12 Resolution Applicants, out of which 11 were found eligible. Last date for receipt of Resolution plan was 08th March 2019. Only one resolution plan was received from successful Resolution Applicant, whereas Appellant has asked for EOI on 12th June 2020 when application seeking approval of Resolution Plan was already filed by RP on 10th July, 2019 under section 31 of Code after Committee of Creditors (CoC) Approval on 28th June 2019 with 79.3% voting share. All this reflect that Appellant wanted to enter fray nearly one year after CoC approval of Resolution Plan; it neither qualifies as Resolution Applicant nor as prospective Resolution Applicant or successful or unsuccessful Resolution Applicant and hence cannot be termed as aggrieved party. Appellant may be termed as an outsider standing on the sidelines. Corporate Insolvency Resolution Process is time bound, value maximization has also to be in time-bound manner. Thus, Appellant is neither an aggrieved party in the process of CIRP nor he has a locus standi to file the appeal. Appeal is held to be not maintainable and Appellant has no locus to maintain it - appeal dismissed.

Issues Involved:
1. Non-consideration of Appellant's Expression of Interest (EOI) by the Resolution Professional.
2. Alleged non-compliance of the Successful Resolution Plan with Section 30(2) of the Insolvency and Bankruptcy Code, 2016.
3. Appellant's locus standi and maintainability of the appeal.
4. Implementation and finality of the approved Resolution Plan by the Successful Resolution Applicant.

Detailed Analysis:

1. Non-consideration of Appellant's Expression of Interest (EOI) by the Resolution Professional:
The Appellant submitted its EOI on 12.06.2020, offering ?2000 Crore for the full and final settlement of the Corporate Debtor's outstanding debt and readiness to deposit ?1000 Crore in an Escrow account. However, the Resolution Professional did not place this proposal before the Committee of Creditors (CoC) for consideration. The invitation for EOI was initially issued on 01.10.2018, and the last date for receipt of the Resolution Plan was 08.03.2019. The Appellant's EOI was submitted almost a year after the CoC's approval of the Resolution Plan, which was filed by the Resolution Professional under Section 31 of the Code on 10.07.2019.

2. Alleged non-compliance of the Successful Resolution Plan with Section 30(2) of the Insolvency and Bankruptcy Code, 2016:
The Appellant contended that the Successful Resolution Plan did not comply with Section 30(2) of the Code. The Appellant cited the judgment of the Hon'ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors., asserting that the Adjudicating Authority should either reject the Resolution Plan or send it back to the CoC for reconsideration if it is non-compliant. The Appellant argued that the Adjudicating Authority's modification of the Resolution Plan exceeded its jurisdiction and that the Resolution Professional failed to place the Appellant's request before the CoC, contravening the Supreme Court's judgment.

3. Appellant's locus standi and maintainability of the appeal:
The Appellant claimed that any person could prefer an appeal before the Appellate Tribunal under Section 61(3) of the Code. However, the Respondents argued that the Appellant, not being a stakeholder or a prospective Resolution Applicant, lacked the locus standi to challenge the Resolution Plan. The Respondent No.1 (Erstwhile Resolution Professional) informed that the Resolution Plan had been successfully implemented, and the Successful Resolution Applicant was now in control of the Corporate Debtor. The Respondents emphasized that the Appellant's appeal was frivolous and aimed at derailing the concluded Corporate Insolvency Resolution Process (CIRP). The Appellate Tribunal agreed, noting that the Appellant was a "rank outsider" who sought to intervene at a belated stage, and thus, the appeal was not maintainable.

4. Implementation and finality of the approved Resolution Plan by the Successful Resolution Applicant:
The Respondent No.3 (Successful Resolution Applicant) submitted that the Resolution Plan had already been implemented, with ?1,550 Crore paid, existing shares of the Corporate Debtor canceled, new shares issued to the Successful Resolution Applicant, and a new board of directors appointed. The Respondents argued that entertaining the Appellant's EOI at this stage would undermine the statutory procedure and the time-bound resolution process enshrined in the Code. The Appellate Tribunal concurred, stating that the Appellant's intervention could jeopardize the entire CIRP and that the commercial wisdom of the CoC was non-justiciable.

Conclusion:
The Appellate Tribunal dismissed the appeal, holding that the Appellant lacked locus standi and the appeal was not maintainable. The Tribunal emphasized the importance of adhering to the time-bound resolution process and the limited jurisdiction of the Adjudicating Authority in approving or rejecting Resolution Plans. Pending applications were disposed of, and no order as to costs was made.

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