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2022 (1) TMI 670 - AT - Insolvency and BankruptcyValidity of resolution passed at the 12th COC Meeting - CoC had rejected the Applicant s request for extension of time to submit the Resolution Plan - HELD THAT - The Minutes of the 12th COC Meeting established that the CoC offered to the Appellant to continue to be a part of the ongoing process so that it may have an opportunity at any later stage. The Appellant had sought 15 minutes time for discussion and thereafter decided not to participate in the open bidding process and exited the Meeting. Thereafter the CoC went on to approve the Resolution Plan submitted by M/s. Om Logistics Ltd./R-8. We find force in the contention of the Learned Counsels for the Respondent that if one of the Directors of the Appellant Company Mr. Naresh Agarwal had tested Covid positive there are no substantial reasons given for any of the other five Directors not to have represented their matter. In a catena of Judgements the Hon ble Apex Court has laid down that the provisions investing jurisdiction and authority in the NCLT has not made the commercial decision exercised by the CoC of not approving the Resolution Plan or rejecting the same justiciable. So in the instant case if CoC has approved with 66% majority as provided under Section 12(2) of the Code and has decided not to extend the time to the Appellant herein on the ground that several extensions have already been given the RP cannot take any contrary decision. Therefore the contention of the Learned Counsel for the Appellant that the RP has not given sufficient advance time for the meeting and has acted contrary to provisions of IBC is untenable. Additionally the Appellant had not chosen to exercise their choice of participating in the open bidding process and chose to exit the Meeting and even accepted the refund of the EMD amount. Appeal dismissed.
Issues Involved:
1. Challenge to the dismissal of I.A. No. 1010/KB/2020 by the NCLT. 2. Request for extension of time to submit the Resolution Plan. 3. Alleged non-compliance with Section 19 of the Insolvency and Bankruptcy Code, 2016. 4. Implementation of the approved Resolution Plan. Issue-wise Detailed Analysis: 1. Challenge to the Dismissal of I.A. No. 1010/KB/2020: The Appellant challenged the Impugned Order dated 02.02.2021, passed by the NCLT Kolkata Bench, which dismissed I.A. No. 1010/KB/2020. The Appellant sought to set aside the resolution passed at the 12th CoC meeting held on 10.09.2020. The NCLT observed that the CIRP commenced on 21.11.2019, and the last date for submission of the resolution plan was extended multiple times. Despite several opportunities, the Appellant failed to submit a revised resolution plan. The NCLT found the CoC's decision not to grant further extension reasonable and not arbitrary. 2. Request for Extension of Time to Submit the Resolution Plan: The Appellant argued that during the CoC meeting on 03.09.2020, all resolution applicants agreed to adjourn to file revised plans. On 08.09.2020, the RP informed that the 10th CoC meeting would occur on 10.09.2020, giving only two days' notice. The Appellant requested an extension due to the COVID-19 pandemic and the illness of key personnel. However, the CoC refused the extension, and the Appellant chose not to participate in the open bidding process. 3. Alleged Non-Compliance with Section 19 of the Insolvency and Bankruptcy Code, 2016: The Appellant contended that the RP's email on 08.09.2020, giving only two days' notice for the meeting on 10.09.2020, was not in conformity with Section 19 of the Code. The NCLT noted that the CoC's refusal to extend the time was within the provisions of the Code, emphasizing the importance of adhering to timelines in the CIRP process. The Hon'ble Supreme Court in 'Ebix Singapore Private Limited' Vs. 'Committee of Creditors of Educomp Solutions Limited & Anr.' highlighted the significance of adhering to the CIRP timeline. 4. Implementation of the Approved Resolution Plan: The RP and CoC approved the resolution plan submitted by Om Logistics Ltd. (Respondent No. 8), which was implemented. The RP conveyed the first meeting of the Monitoring Committee, and new directors were appointed. Payments were made to secured financial creditors, and statutory dues were settled. The financial creditors issued NOCs and released their security interests. The NCLT emphasized that the commercial wisdom of the CoC could not be overturned, and the implementation of the resolution plan was completed. Assessment: The NCLT observed that the last date for submission of the resolution plan was extended five times. The Appellant's request for further extension was declined by the CoC, which was within its rights under the provisions of the Code. The Hon'ble Supreme Court has consistently held that the commercial decisions of the CoC are not justiciable. The Appellant's failure to participate in the open bidding process and acceptance of the EMD refund further weakened their case. Given the resolution plan's implementation and the changes in the company's directorship, the NCLT concluded that reversing the process would defeat the Code's objectives. Conclusion: The appeal was dismissed, and the NCLT's decision was upheld. The commercial wisdom of the CoC was respected, and no costs were awarded. The judgment was directed to be uploaded on the Tribunal's website and communicated to the NCLT Kolkata Bench.
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