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2021 (7) TMI 416 - AT - Insolvency and BankruptcySeeking rejection of sanctioned Resolution Plan - Delaying Tactics - rejection of Valuation Report - appointment of another valuer convening another CoC - inequitable provisions which discriminate the employee Doctors and Consultant Doctors - inconsistent with Article 14 of the Constitution of India - non-compliance with Section 30(2)(e) of I B Code - discrepancies/anomalies observed in the Valuation Report - concept of equality - HELD THAT - As per Section 31 of the Code, if an Adjudicating Authority is satisfied with the Resolution Plan is approved by the Committee of Creditors under Section 30(4) of the Code that it meets the requirements as contemplated in Section 30(2) of the Code, it shall by an order approve the Resolution Plan which shall be binding on the Corporate Debtor Employees and Members Creditors and other Stakeholders involved in the Resolution Plan - It is well settled that it is not open to reopen the reasons for rejection of Resolution Plan passed with 100% voting share s for adjudication. No wonder, approval for Resolution Plan is to be judged with diligence and satisfaction in regard to the Approval of plan in writing with reasons to be recorded, of course, with due application of mind. Rejection of Valuation Report made by the Valuer Mr.R.K.Patel - HELD THAT - Not resting with that, the Resolution Professional had resorted to the agreed International Valuation Standards and carried out the physical verification of the Corporate Debtor s fixed assets. Therefore, the question of appointing a third Valuer on the purported ground of difference of 15.92% in the Fair Value does not arise, in the considered opinion of this Tribunal . Equality Concept - HELD THAT - One cannot ignore a vital fact that Guarantee of Equality before law is a positive concept. The principle of equal pay for equal work has to be granted only if there is total and complete identity between two employees. It is to be remembered that the burden of proving the right and parity in an employment is only on the individual claiming such right. Moreover, it cannot be lost sight of that in respect of the concerned employees functions may be same but skills and responsibilities may be really and substantially different. Viewed in that perspective, in the instant case on hand, there is a clear difference and defined arena between the Employee Doctors and the Consultant Doctors of the Corporate Debtor . As such the contra plea taken on behalf of the Appellant(s) is not worthy of acceptance by this Tribunal . This Tribunal taking note of the divergent contentions advanced on either side and also bearing in mind the facts and circumstances of the present case, in a conspectus comes to a resultant conclusion that the Adjudicating Authority (National Company Law Tribunal, Cochin Bench) had in application had come to a correct conclusion on 22.02.2021 that the Appellant / Applicants claim for rejection of Resolution Plan could not be entertained at the stage when Resolution Professional had filed the Resolution Plan before it, and also when the Plan was to be approved. Appeal dismissed.
Issues Involved:
1. Eligibility to reject the Resolution Plan and valuation report. 2. Compliance with IBBI Regulations and Insolvency and Bankruptcy Code. 3. Discrimination between employee doctors and consultant doctors. 4. Appointment of a third valuer due to discrepancies in valuation reports. 5. Judicial review of the Committee of Creditors' (CoC) commercial decisions. Issue-wise Detailed Analysis: 1. Eligibility to Reject the Resolution Plan and Valuation Report: The primary issue was whether the applicant could get relief to reject the Resolution Plan submitted by the Resolution Applicant and the valuation report filed by Mr. R.K. Patel, and to appoint another valuer convening another CoC. The Tribunal found that the Resolution Professional had complied with the provisions of IBBI Regulations before submitting the Resolution Plan to the CoC for its approval. The CoC approved the Resolution Plan with 100% voting right, and the Tribunal noted that there was no statutory mandate under the Code that the bid of the Resolution Applicant should match the liquidation value. 2. Compliance with IBBI Regulations and Insolvency and Bankruptcy Code: The Tribunal observed that the Resolution Professional had complied with Regulation 27 and 35 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The CoC approved the Resolution Plan, and the Tribunal was satisfied that the requirements of Sub-Section (2) of Section 30 of the Code were met. The Tribunal referred to the decision in Maharashtra Seamless Limited vs. Padmanabhan Venkatesh & Ors., emphasizing that the valuation process is to assist the CoC in decision-making and not a statutory mandate to match the liquidation value. 3. Discrimination between Employee Doctors and Consultant Doctors: The appellant contended that the Adjudicating Authority failed to consider the interests of consultant doctors, who were treated differently from employee doctors. The Tribunal noted that consultant doctors were not engaged on a monthly salary and were not entitled to regular employee benefits. They were allowed to practice independently, unlike employee doctors who were on the payroll of the Corporate Debtor. The Tribunal found no discrimination or arbitrariness in the classification of creditors based on the nature of their claims. 4. Appointment of a Third Valuer Due to Discrepancies in Valuation Reports: The appellant argued that the valuation reports had discrepancies and a third valuer should have been appointed. The Tribunal noted that the difference of 15.62% in the valuation reports was minimal and did not warrant the appointment of a third valuer. The valuation reports were estimates to aid the CoC in its commercial decision-making and were not binding. 5. Judicial Review of the Committee of Creditors' (CoC) Commercial Decisions: The Tribunal emphasized the limited scope of judicial review in the approval of Resolution Plans. It referred to the Hon’ble Supreme Court’s decision in Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta, which stated that the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the CoC. The Tribunal found that the CoC had taken into account the necessary parameters and the interests of all stakeholders, including operational creditors. Conclusion: The Tribunal dismissed the appeal, finding no legal errors in the Adjudicating Authority's decision to approve the Resolution Plan. The appeal was found to lack merit, and the stay application was closed.
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