2024 (3) TMI 863 - AT - Insolvency and Bankruptcy

Approval of Resolution Plan - Consideration of Resolution Plan from Non-Listed Applicants - Authority of CoC to Modify Invitation for Expression of Interest (EOI) - Interpretation of Regulations 39(1)(b) and 36A of the CIRP Regulations, 2016 - HELD THAT - The Regulation clearly provides that the committee shall not consider a resolution plan received from an application whose name does not appear in the list of PRAs. Admittedly, neither Patanjali nor other two applications have submitted any EOI nor their name was reflected in the List of PRAs - Regulation 36A which provide for Invitation for Expression of Interest also empowers the CoC to modify the invitation for Expression of Interest. It is always open for the CoC to take a decision to not proceed on the Applications, EOI received and take a decision for issuance of fresh Form G and permit other applicants to participate. When no fresh Form G has been issued, it is not open for any new applicant to submit application before the Adjudicating Authority for being permitted to participate in the CIRP and submit Resolution Plan. In any view of the matter, affidavit has been filed by the CoC where resolution has been brought on record that the CoC has now decided not to consider any additional new entrants and they will confine their consideration to Resolution Applicants whose names were reflected in the final list of Prospective Resolution Applicants dated 07.11.2023. The Committee of Creditors having taken resolution not to consider any additional new entrants, we are of the view that impugned order dated 12.02.2024 and 21.02.2024 cannot be sustained. Both the Appeals are allowed.

Summary

Issues Involved:
The judgment involves challenges to orders passed by the Adjudicating Authority in two separate Interlocutory Applications (I.A.) related to the consideration of Resolution Plans by the Committee of Creditors (CoC) in the context of insolvency proceedings.

Company Appeal (AT) (Ins.) No.459 of 2024:
The Adjudicating Authority directed the CoC to consider the Resolution Plan of the Applicant subject to allowing all Resolution Applicants to revise their bids. The Resolution Professional was directed to seek an extension of time. The Appellant contested this decision, arguing that certain applicants were not included in the list of Prospective Resolution Applicants (PRAs) and thus should not be considered.

Company Appeal (AT) (Ins.) No.464 of 2024:
The Adjudicating Authority directed the Resolution Professional to present the Resolution Plans of specific applicants to the CoC for consideration, with a deadline set for further submissions. The Appellant challenged this decision, asserting that applicants not listed as PRAs should not be considered under Regulation 39(1)(b) of the CIRP Regulations, 2016.

Judgment Details:
The Tribunal heard arguments from the parties and examined relevant regulations governing the consideration of Resolution Plans. Regulation 39(1)(b) prohibits the CoC from considering plans from applicants not listed as PRAs. The CoC, through a resolution, decided to only negotiate with existing Resolution Applicants listed as PRAs, disregarding new entrants. The Tribunal upheld the CoC's decision, concluding that the impugned orders directing consideration of additional Resolution Plans were unsustainable. Consequently, both Appeals were allowed, and the orders dated 12.02.2024 and 21.02.2024 were set aside.