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2021 (5) TMI 404 - HC - Insolvency and BankruptcyValidity of unilateral changes made to the Resolution Plan - implementation of Resolution Plan - HELD THAT - The conclusions arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020, have not been taken to the logical end by the respondent Banks either in the form of an agreement/contract and it would mean that there is no contractual obligation between the petitioner and the respondents for enforcement of the conclusions arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020. If those conclusions are to be acted upon, more money has to be pumped in pursuant to the conclusions and this Court cannot give any mandamus to pump in money to revive the petitioner Company, more so when there is no agreement or contract entered in pursuance of the conclusions which were arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020. It is for the respondent Banks to take a decision as to whether the petitioner Company should be revived and whether additional money has to be pumped in by them, but this Court cannot give a direction to take forward the conclusions arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020, to the logical end. This Court is not inclined to interfere with the impugned letter and the writ petition is liable to be dismissed - Petition dismissed.
Issues Involved:
1. Validity of the letter dated 04.06.2020 imposing unilateral changes to the Resolution Plan. 2. Whether the respondent banks should be directed to implement the Resolution Plan agreed upon in the Joint Lenders Meetings (JLMs) held on 19th/27th March 2020 and 20.04.2020. 3. Maintainability of the writ petition in contractual matters. 4. Whether the decision taken by the respondent banks on 04.06.2020 was arbitrary and in violation of principles of natural justice. Issue-wise Detailed Analysis: 1. Validity of the letter dated 04.06.2020: The petitioner contended that the respondent banks took a U-turn from their earlier decision to revive the petitioner company, as concluded in the JLMs held on 19th and 27th March 2020, without consulting the petitioner. The petitioner argued that this action was arbitrary and violated the principles of natural justice. The court noted that the conclusions from the JLMs were not formalized into an agreement or contract, thus no binding obligation existed between the parties. Consequently, the court could not mandate the respondent banks to implement those conclusions. 2. Implementation of the Resolution Plan: The petitioner sought a directive for the respondent banks to implement the Resolution Plan agreed upon in the JLMs. The court observed that the conclusions of the JLMs were merely deliberations and had not been crystallized into a formal agreement or contract. Therefore, the court held that it could not issue a mandamus to enforce the conclusions of the JLMs, as it was within the banks' discretion to decide whether to proceed with the revival plan. 3. Maintainability of the writ petition: The petitioner argued that the writ petition was maintainable in cases of arbitrary actions by public authorities, citing precedents from the Supreme Court. The respondent banks contended that the matter was already pending before the National Company Law Tribunal (NCLT), which would examine the possibility of reviving the company. The court agreed with the respondents, noting that the NCLT was the appropriate forum to address the revival of the company and that the writ petition was not maintainable in this context. 4. Arbitrariness and violation of natural justice: The petitioner argued that the respondents' decision to take a U-turn from the earlier conclusions was arbitrary and did not consider the national interest. The court, however, found that the respondents' decision was a commercial one made in the interest of public money. Since no formal agreement or contract was entered into based on the JLMs' conclusions, the court held that the respondents' actions were not arbitrary. Conclusion: The court dismissed the writ petition, stating that there was no contractual obligation between the petitioner and the respondents to enforce the conclusions of the JLMs. The court emphasized that it could not direct the banks to revive the petitioner company based on the JLMs' conclusions, as no formal agreement or contract existed. The court also noted that the appropriate forum for addressing the revival of the company was the NCLT. Accordingly, the writ petition was dismissed with no order as to costs. Pending miscellaneous petitions, if any, were also closed.
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