2022 (4) TMI 412 - Tri - Companies Law

Eligibility of prospective Resolution Applicant - whether the final decision on the eligibility of the prospective Resolution Applicant U/s 29A lies with the RP or with the CoC? - HELD THAT - In terms of the judgment of Hon ble Supreme Court in Arcelormittal India Private Limited v/s Satish Kumar Gupta 2018 (10) TMI 312 - SUPREME COURT , Section 29A has been noticed along with Sections 30 25(2)(i) of the Code, it has been stated therein that the RP is not required to take any decision but merely to ensure that the Resolution Plans submitted are complete in all respects before they are placed before the CoC who may or may not approve it. The fact that the RP is required to confirm that the Resolution Plan is not contrary to any of the provisions of law (that includes Section 29A of the Code) only means that a prima facie opinion is to be given to the CoC that a law has or has not been contravened. Section 30(2)(e) does not empower the RP to decide whether the Resolution Plan does or does not contravene the provisions of law. The RP is a facilitator and not a gatekeeper. In these circumstances, the ends of justice would be met if the RP is directed to place all Resolution Plans along with his opinion on the contravention or otherwise of the various provisions of law before the CoC which should take a considered view in the matter, if not already done. Application disposed off.

Summary

Issues:
1. Whether the final decision on the eligibility of the prospective Resolution Applicant U/s 29A lies with the RP or with the CoC.

The judgment delivered by the National Company Law Tribunal Allahabad Bench involved the consideration of an Interlocutory Application (IA) filed by Ms. Upma Jaiswal. The IA sought a direction for the respondent no.1/ RP to present the Resolution Plan submitted by the applicant before the Committee of Creditors (CoC) for their evaluation and voting. The key question for consideration was whether the final decision on the eligibility of the prospective Resolution Applicant under Section 29A should be made by the Resolution Professional (RP) or by the CoC. The Tribunal referred to the judgment of the Hon'ble Supreme Court in Arcelormittal India Private Limited v/s Satish Kumar Gupta, emphasizing that the RP's role is to ensure the completeness of the Resolution Plans before they are placed before the CoC for approval. The RP's responsibility is to confirm whether the Resolution Plan complies with the provisions of the law, including Section 29A, providing a prima facie opinion to the CoC. The RP does not have the authority to determine if the plan contravenes legal provisions. The Tribunal highlighted that the RP acts as a facilitator, not a gatekeeper, and directed the RP to present all Resolution Plans to the CoC along with their opinion on legal compliance, allowing the CoC to make an informed decision.

In conclusion, the Tribunal disposed of IA No.59/2022 by providing directions that the RP should place all Resolution Plans before the CoC, including their opinion on legal compliance, in line with the RP's role as a facilitator and not a decision-maker regarding the eligibility of Resolution Applicants under Section 29A.