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2022 (12) TMI 616 - AT - Insolvency and BankruptcyInitiation of CIRP - Period of limitation - approval of Resolution Plan - distribution of the amount to the Financial Creditors - HELD THAT - When the challenge to the Section 7 application filed by the Appellant on all grounds has been rejected by the Hon ble Supreme Court, the Appellant cannot be permitted to challenge initiation of CIRP on the ground of limitation in this Appeal. The Appellant cannot be heard to say that initiation of CIRP itself was bad. What is challenged in this Appeal is approval of Resolution Plan by order dated 14.02.2020 and subsequent order passed on the I.A. of the Resolution Professional. Distribution of the amount to the Financial Creditors as per the decision of the CoC cannot be permitted to be challenged. - Judgment of Hon ble Supreme Court in India Resurgence ARC Pvt. Ltd. vs. Amit Metaliks Ltd. Anr. 2021 (6) TMI 684 - SUPREME COURT followed. Appeal dimissed.
Issues:
Challenge to order approving Resolution Plan Application for releasing original title deeds Analysis: 1. Challenge to Order Approving Resolution Plan: The Appellant, a Financial Creditor, challenged the approval of the Resolution Plan by the Adjudicating Authority. The Appellant contended that the application filed by Andhra Bank was time-barred, citing the limitation period of three years for filing a Section 7 application. The Appellant argued that as a Secured Creditor, it was entitled to the liquidation value of its secured assets, which was not considered in the Resolution Plan. However, the Resolution Professional and Andhra Bank supported the Resolution Plan, emphasizing that the objections raised by the Appellant had been previously rejected and the Resolution Plan had been approved by the Committee of Creditors (CoC) in accordance with the law. 2. Application for Releasing Original Title Deeds: The second issue pertained to an application filed by the Resolution Professional seeking directions for the release of original title deeds of the property mortgaged by the Corporate Debtor. The Resolution Professional requested compliance verification of the approved Resolution Plan and issuance of directions to the Appellant for releasing the title deeds. The Appellant argued that the Resolution Plan was not in compliance with the law and that its objections had not been adequately considered. However, the Adjudicating Authority found that the Resolution Plan was in line with the provisions of the Insolvency and Bankruptcy Code, promoting resolution over liquidation. 3. Judicial Analysis: The Adjudicating Authority dismissed the Appellant's objections to the Resolution Plan, noting that the objections had been previously addressed and rejected. The Authority highlighted that the Resolution Plan provided for the takeover of the Corporate Debtor as a going concern, aligning with the objectives of the Insolvency and Bankruptcy Code. The Authority also referenced a Supreme Court judgment emphasizing that the commercial wisdom of the CoC in distributing amounts to creditors should not be challenged by dissenting creditors. 4. Decision: The Appellate Tribunal upheld the orders of the Adjudicating Authority, dismissing both Appeals. The Tribunal found no grounds to interfere with the approval of the Resolution Plan or the subsequent order for releasing the original title deeds. The Tribunal emphasized that the Resolution Plan was compliant with the law and the objections raised by the Appellant had been duly considered and rejected previously.
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