2023 (2) TMI 1034 - AT - Insolvency and Bankruptcy

Seeking directions against the Resolution Professional and the CoC to consider the Resolution Plan - main case of the Appellant herein is that the Adjudicating Authority ought not to have dismissed IA446/2021 on the ground that the CIRP period of 330 days is over and ought to have exercised its discretion and extended the period giving time to the CoC to consider its revised Resolution Plan. HELD THAT - It is seen from the record that the CoC has discussed in detail the Plan of the Resolution Applicant in their various Meetings and suggested for modifications in the Resolution Plan. It is pertinent to mention that a total time of 281 days i.e., from 14.07.2020 to 20.04.2021 was given for submission of the revised Resolution Plan and a final call was given by the RP stating that if no signed Plan is received on or before on 20.04.2021, the CoC may consider the matter as if there is no Plan - The Adjudicating Authority in the Impugned Order dated 22.09.2021, before passing the Order for liquidation of the Corporate Debtor, observed that all possible steps as required under the Code were taken during the period of CIRP and the CoC did not receive any viable Plan/Proposals for revival of the Company. This Tribunal is of the considered view that the issue whether 330 days is to be extended or not has to be seen comprehensively with the decision of the CoC whether any further time is to be granted and if the proposal of the Resolution Applicant was actually under serious consideration. In the instant case, the documentary evidence establishes that the CoC had rejected the Plan submitted by the Appellant herein and the Appellant itself vide email dated 21.04.2021 refused to make the changes as required by the CoC. It is significant to mention that IA259/2021 filed by the RP seeking liquidation was taken up by the Adjudicating Authority on 11.08.2021 and the matter was reserved for Orders, and the Appellant herein submitted their revised Resolution Plan on 16.08.2021 subsequent to the filing of the IA259/2021 and sought that the Liquidation Orders may not be passed. The Counsel appearing for IDBI, a Secured Financial Creditor comprising 33% of Voting Shares submitted before this Bench that no more opportunities need to be given to the Appellant herein as the Committee of Creditors, had rejected the revised Resolution Plan, given by the Appellant herein. Finally, this Tribunal, addresses to the contention of the Learned Senior Counsel for the Appellant that without adhering to the five days time, which ended on 16.09.2021, based on the Reply filed by the Resolution Professional on 15.09.2021, the Adjudicating Authority, had passed the Orders. It is relevant to note that admittedly, several opportunities were given to the Appellant to make the necessary revised changes, the Appellant itself had refused to make the changes as evident from the email dated 21.04.2021, and ultimately five days time was given - this Tribunal, is quite alive and conscious of the fact that more than a year has lapsed and the I B Code, 2016, is a time bound process, and all the more, Speed, is the essence enjoined, under the Code. Appeal dismissed.

Summary

Issues Involved:
1. Whether the application IA446/2021 seeking directions to consider the revised Resolution Plan was maintainable after the completion of the CIRP period.
2. Whether the Adjudicating Authority correctly allowed the application for liquidation of the Corporate Debtor.

Analysis:

1. Maintainability of IA446/2021:
The appellant, a Resolution Applicant, challenged the dismissal of IA446/2021 by the Adjudicating Authority, which sought directions for the Committee of Creditors (CoC) to consider their revised Resolution Plan. The Adjudicating Authority dismissed the application on the grounds that the Corporate Insolvency Resolution Process (CIRP) period of 330 days had expired, making the application not maintainable. The appellant argued that the revised Resolution Plan, submitted on 19.05.2019 and further revised on 16.08.2021, was viable and feasible for maximizing the value of the Corporate Debtor's assets. Despite the CoC's opinion favoring the revised plan, the Adjudicating Authority dismissed the application due to the lapse of the CIRP period.

2. Liquidation of the Corporate Debtor:
The appellant also challenged the order dated 22.09.2021, where the Adjudicating Authority allowed the application filed by the Resolution Professional (RP) under Section 33 of the Insolvency and Bankruptcy Code (IBC), seeking liquidation of the Corporate Debtor. The appellant contended that the CoC should have considered their revised Resolution Plan and that the Adjudicating Authority should have extended the CIRP period, especially considering the pandemic-related delays. The appellant relied on the Supreme Court's judgment in the Essar Steel case, which allows for the extension of the CIRP period beyond 330 days in certain circumstances.

Assessment:
The CoC had rejected the appellant's Resolution Plan dated 19.04.2021 by a majority vote of 85.96%. Despite multiple revisions and extensions, the CoC did not receive a viable plan that met their requirements. The RP had filed for liquidation after the CoC decided not to extend the CIRP period further. The Adjudicating Authority observed that all possible steps were taken during the CIRP period and no viable plans were received for the revival of the Corporate Debtor.

The Tribunal noted that the CoC had given ample time (281 days) for the submission of a revised Resolution Plan and had made suggestions for modifications. The appellant refused to make the required changes, leading to the rejection of their plan. The Tribunal also highlighted that the IBC is a time-bound process, emphasizing the importance of speed and efficiency.

The Tribunal dismissed the appeals, stating that the Adjudicating Authority had correctly followed the provisions of the IBC and that the CoC's decision to liquidate the Corporate Debtor was justified given the circumstances.

Conclusion:
Both appeals were dismissed as devoid of merit. The Tribunal upheld the Adjudicating Authority's decision to dismiss IA446/2021 and to allow the liquidation of the Corporate Debtor, emphasizing the importance of adhering to the time-bound nature of the IBC process. The connected pending Interlocutory Applications, if any, were also closed.