2021 (7) TMI 938 - Tri - Insolvency and Bankruptcy

Seeking to consider the resolution plan - seeking to set aside the impugned Form-G dated 21.02.2021 and for issuance of a fresh Form-G again - HELD THAT - It is not in dispute that the object of the Code is maximization of the value of the assets of the corporate debtor. Hence, no prospective resolution applicant can object if the COC in its commercial wisdom rejects a particular resolution plan and in deciding to issue a fresh Form-G. The applicant though got an opportunity to submit a fresh resolution plan, and has chosen not to submit the same but on the other hand, filed the instant application. It is to be seen that the resolution of the respondent-corporate debtor has already been delayed for substantial period due to various reasons including different long spells of lockdowns due to Pandemic Covid-19. It is not in the interest of the corporate debtor and any of its stakeholders to further delay the resolution process. The applicant having given consent to participate in the process in pursuance of the impugned Form-G dated 21.02.2021 cannot challenge the same - a short time is given to all the prospective resolution applicants including to the applicant to submit their resolution plans or revised resolution plans as the case may be within a specified time. Application is disposed of by permitting the applicant and all other prospective resolution applicants to participate in the resolution process of the corporate debtor and to submit their fresh resolution plans/revised resolution plans within 10 days from today.

Issues:
1. Challenge to fresh Form G and consideration of resolution plan.
2. Compliance with CIRP Regulations regarding timelines for Form G.
3. Allegations of fraud and collusion in the resolution process.
4. Applicant's failure to submit a resolution plan.
5. Justification for issuing a fresh Form G with reduced timelines.
6. Maximization of value of assets and resolution process efficiency.

Analysis:

Issue 1: Challenge to fresh Form G and consideration of resolution plan
The IA challenged the fresh Form G dated 21.02.2021, seeking to set it aside and have the resolution plan considered in accordance with the law. The applicant contended that the COC rejected all resolution plans, including theirs, leading to the issuance of a fresh Form G with shortened timelines. The respondent-RP defended the decision, emphasizing the maximization of the corporate debtor's assets as the primary goal. The Tribunal noted the importance of maximizing asset value and allowed all prospective resolution applicants, including the applicant, to submit fresh or revised plans within a specified time frame for COC consideration.

Issue 2: Compliance with CIRP Regulations regarding timelines for Form G
The applicant argued that the timelines in the fresh Form G were not in line with Regulation 36A(1) of the CIRP Regulations, rendering it violative. The respondent-RP justified the shortened timelines due to the impending expiry of the CIRP period. The Tribunal acknowledged the importance of adhering to regulations but balanced it with the need to expedite the resolution process, granting a short extension for submission of fresh or revised plans.

Issue 3: Allegations of fraud and collusion in the resolution process
The applicant alleged fraud and collusion, claiming that a competitor obtained confidential bid information and submitted a higher bid. However, the Tribunal found no substantial evidence to support these allegations and focused on the efficiency and fairness of the resolution process.

Issue 4: Applicant's failure to submit a resolution plan
Despite participating in the resolution process under the fresh Form G, the applicant failed to submit a resolution plan, leading to the dismissal of the IA. The Tribunal emphasized the importance of active participation and submission of plans by prospective resolution applicants to ensure a robust resolution process.

Issue 5: Justification for issuing a fresh Form G with reduced timelines
The decision to issue a fresh Form G with shortened timelines was justified by the urgency to conclude the resolution process within the extended CIRP period. The Tribunal balanced the need for expediency with procedural compliance, allowing all prospective applicants a brief extension to submit their plans.

Issue 6: Maximization of value of assets and resolution process efficiency
The Tribunal reiterated the objective of maximizing asset value in the resolution process and highlighted the adverse impact of delays on stakeholders. By permitting all prospective resolution applicants to submit fresh or revised plans promptly, the Tribunal aimed to expedite the resolution process while ensuring fair consideration of all proposals.

In conclusion, the Tribunal disposed of the IA by extending the submission deadline for resolution plans and emphasizing active participation to facilitate an efficient and value-maximizing resolution process.

← Previous Next →