9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 1251 - AT - Insolvency and BankruptcySeeking to restrain the Respondents from proceeding with the Challenge Process - modification in the Resolution Plan more than once either by way of revision or by way of challenge mechanism - seeking direction to accept the Resolution Plan of the Appellant as submitted on 28/10/2022 - seeking restrain on 1st Respondent from considering any of the Resolution Plans submitted after 20/10/2022. HELD THAT - The insertion of Regulation 39(1A) was especially that a objection to maximise the value of the assets and to reduce any delay in timelines by several resubmissions or addendums which the Resolution Applicants seek to submit - The NCLAT, Principal Bench, New Delhi, in VISTRA ITCL (INDIA) LTD. VERSUS TORRENT INVESTMENTS PVT. LTD. ORS. AND INDUSIND INTERNATIONAL HOLDINGS LTD. VERSUS TORRENT INVESTMENTS PVT. LTD. ORS. 2023 (3) TMI 176 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI addressed to the question whether Regulation 39(1A) contains an implied prohibition on the jurisdiction of the CoC to enter into any further negotiation with the Resolution Applicant or to further ask the Resolution Applicant to increase its Resolution plan value, where it was held that The Adjudicating Authority further fell into error in coming to a conclusion that there is no power with the CoC to enter into negotiations with the Resolution Applicant, after the Challenge Mechanism and the exercise of the commercial wisdom is circumscribed by the framework for value maximization provided under the Code read with the Regulations. In the instant Case, keeping in view the facts of the matter that the decision to conduct the Swiss challenge was approved by the CoC by majority of 99.18% during the 43rd Meeting held on 29/12/2022 that the decision of CoC to conduct the Challenge Process is supported by Causes 1.17, 1.18 and 7.2 of the RFRP that the voting window commenced on 06/01/2023 vest the Challenge Process conducted on 04/01/2023 and such voting window remained open upto 16/01/2023 and only after closing the voting lines, the CoC has approved the Resolution Plan of Respondent No. 3 by majority of 94.96%, does not find any violation of Regulation 39 (1A) of the CIRP Regulations or any other provisions of the Code. There are no substantial reasons to interfere in the well considered Order of the Adjudicating Authority - appeal dismissed.
Issues Involved:
1. Legality of the Challenge Process and acceptance of the Resolution Plan. 2. Interpretation of Regulation 39(1A) of the CIRP Regulations. 3. Commercial wisdom of the Committee of Creditors (CoC). Summary: 1. Legality of the Challenge Process and Acceptance of the Resolution Plan: The Appellant challenged the Impugned Order dated 23/01/2023, which dismissed their application to restrain the Respondents from proceeding with the Challenge Process and to accept the Appellant's Resolution Plan submitted on 28/10/2022. The Appellant argued that the Resolution Professional (RP) and CoC extended timelines and accepted revised plans contrary to the stipulated deadlines, leading to procedural inconsistencies and delays. 2. Interpretation of Regulation 39(1A) of the CIRP Regulations: The Appellant contended that Regulation 39(1A) is mandatory and allows only one modification of the Resolution Plan or a Challenge Mechanism, not both. They argued that the RP and CoC violated this regulation by permitting multiple revisions and employing a Challenge Mechanism, which contradicts the regulation's intent to prevent delays and ensure procedural sanctity. The Appellant relied on the Supreme Court's judgment in 'Guru Nanak Dev University Vs. Sanjay Kumar Katwal' to support their interpretation that 'or' should not be read as 'and'. 3. Commercial Wisdom of the Committee of Creditors (CoC): The Respondents argued that the CoC, in its commercial wisdom, decided to run the Challenge Process to maximize the value of the Corporate Debtor. The CoC's decision was supported by clauses in the Request for Resolution Plan (RFRP) that allowed for negotiations and modifications to achieve value maximization. The CoC approved the revised plans after the Challenge Process, resulting in significantly higher bids from the Resolution Applicants, thus enhancing the value of the Corporate Debtor. Appraisal: The Tribunal noted that Regulation 39(1A) aims to maximize asset value and reduce delays. It referred to the NCLAT Principal Bench's judgment in 'Vistra ITCL (India) Ltd. Vs. Torrent Private Ltd. and Ors.' which upheld the CoC's right to negotiate and modify Resolution Plans even after the Challenge Mechanism. The Tribunal found that the CoC's decision to conduct the Challenge Process was within its commercial wisdom and supported by the RFRP clauses. The CoC's actions led to a significant increase in the bids, demonstrating value maximization. Conclusion: The Tribunal concluded that there was no violation of Regulation 39(1A) or any other provisions of the Code. The CoC's decision to run the Challenge Process and approve the revised Resolution Plan was upheld. The appeal was dismissed, and the Impugned Order was affirmed.
|
