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2023 (12) TMI 185 - AT - Insolvency and BankruptcyApproval of Resolution Plan - failure to submit the Bank Guarantee as per RFRP - whether condition for requiring to submit Rs. 50 Lakhs Bank Guarantee was contrary to Regulation 36B (4) and (4A)? - HELD THAT - Regulation 36-B (4) only provides for request of resolution plan shall not require any non-refundable deposit. In RFRP there is no such clause which requires that Resolution Applicant has to submit any non-refundable deposit. With regard to Regulation 36B (4A), RFRP itself contains a condition as extracted above. Therefore, the RFRP was fully in compliance with Regulation 36B (4A). Learned Counsel for the Resolution Professional has rightly submitted that requirement of Bank Guarantee was only for the purpose to consider seriousness of the Resolution Applicants who are able to submit the Bank Guarantee of Rs. 50 Lakhs. Appellant has never complied the said and has not challenged the RFRP at any stage, cannot be allowed to contend that the said condition is not correct. It is further noticed in 09th COC Meeting that Appellant has made a request to CoC to waive the requirement of Bank Guarantee which was not accepted by the CoC and Appellant having not complied with the terms of the RFRP in submitting the plan, there are no illegality in the decision of the CoC in not considering the Resolution Plan of the Appellant. There are no reason to entertain this Appeal, the Appeal is dismissed.
Issues involved:
The appeal against the order approving a resolution plan due to failure to submit a bank guarantee of Rs. 50 lakhs as required by the Request for Resolution Plan (RFRP). Resolution of the issues: The appeal was filed by the Appellant after their resolution plan was not considered for approval as they failed to submit the required bank guarantee of Rs. 50 lakhs as per the RFRP. The Appellant argued that the bank guarantee requirement was contrary to the CIRP Regulations and should not have been a deciding factor. However, the Respondents contended that the RFRP clearly stated the condition for the bank guarantee submission, which was not challenged by the Appellant. The Resolution Professional highlighted that the Appellant had even written to the bank regarding the guarantee but failed to comply with the RFRP terms. The CoC meeting minutes confirmed the Appellant's non-compliance with the bank guarantee requirement, leading to the rejection of their resolution plan. The Appellant's main argument was that the bank guarantee condition was against Regulation 36B (4) and (4A) of the CIRP Regulations. However, it was observed that the RFRP itself included the requirement for the bank guarantee, thus complying with Regulation 36B (4A). The purpose of the bank guarantee was to assess the seriousness of the resolution applicants, and since the Appellant did not fulfill this requirement and did not challenge the RFRP, they could not dispute the validity of the condition. The CoC's decision to reject the Appellant's plan for non-compliance with the RFRP terms was found to be legal. In conclusion, the Appellate Tribunal dismissed the appeal as the resolution plan had already been approved, implemented, and the distribution completed, rendering the appeal moot.
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