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TMI Blog2019 (1) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that though the resolution applicant has no voting right in the CoC; and it is the CoC to approve or reject the resolution plan, an opportunity ought to have been provided to the resolution applicant to attend the meeting of the CoC in which the Resolution Plan is to be considered, to make his representation and to express his view point on the Resolution Plan submitted to the CoC. The application of the Resolution Applicant is allowed - the CoC is directed to consider the plan afresh submitted by the Applicant by providing it reasonable opportunity of being heard within two weeks from the date of passing this order and RP is directed to file status report within two working days thereafter. - MA/523/2018 In CP 689/IB/CB/2017 - - - Dated:- 13-12-2018 - CH. MOHD. SHARIEF TARIQ, MEMBER (JUDICIAL) For The Applicant : Ms. Ami Jain, Counsel For The Respondent : T. Ravichandaran, For The CoC : Ms. Vidyalakshmi, Vipin Warrior and Ms. Anitha ORDER Per : CH. MOHD SHARIEF TARIQ, MEMBER (J) 1. Under consideration is MA/523/IB/2018 filed in CP/689/IB/2017 by one of the Resolution Applicant against the Resolution Professional viz. Mr. Ravin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the Resolution Professional has mentioned that if the applicant has any difficulty in attending the meeting, he shall keep the applicant informed about the outcome of the CoC meeting by evening of that day. This may suggest that Resolution Professional had pre determined his mind that (i) applicant's request for adjournment should not be considered and (ii) applicant should not attend the CoC meeting. The Resolution Applicant has submitted that it is evident from the minutes of the meeting held on 12.09.2018 that the said request of applicant was not placed before CoC for consideration and the Resolution Professional was keen to proceed in the absence of the applicant for obvious reasons. 5. The Applicant sought copies of all minutes of CoC meetings vide its E-mail dated 12.09.2018 to seek legal remedy at the appropriate forum. The RP responded to the said E-mail on 14.09.2018 expressing his inability to share information/documents. 6. The Applicant has contended that the Resolution Professional/CoC did not grant the opportunity of being heard to the applicant and thus the conduct was not only in violation of the principle of natural justice but also against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfil even revised criteria of 16000 lakh. Despite non-eligibility on the ground of requisite turnover by Acme Chem Ltd, the Resolution Professional placed its Resolution Plan for consideration approval by the CoC. This is glaring example of favours to Acme Chem Limited. 8. The Resolution Applicant has submitted that full disclosure in regard to the offer made by the applicant was not made available to the CoC, especially in regard to the additional offer of the applicant to pass on to the financial creditors the following:- i. Recovery of insurance premium of ₹ 198 lakhs; ii. Excess increase in RP cost of ₹ 108 lakhs; iii. Recovery from promoters on account of reduction in unsecured loans ₹ 569.04 lakhs; iv. Current assets valuing ₹ 1476.61 lakhs. The RP mentioned in addendum 4 that wages to workers etc., to be considered at ₹ 559.17 lakhs in the resolution plan as against admitted claim of ₹ 1319.53 lakhs against amount of ₹ 3413.99 lakhs. Applicant accordingly provided the same but Acme Chem Ltd. was allowed to reduce the said figure drastically which had the effect of financial creditors getting higher amount in its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld on 12.09.2018. 13. It is submitted that the CoC did not record its satisfaction with respect to the viability and feasibility of the resolution plan of Acme Chemical Ltd that was approved by it at the meeting held on 12.09.2018. The provisions of Section 30(4) of the Code make it the bound en duty of the CoC to approve a resolution plan after considering its feasibility and viability and such other requirements as may be specified by the Board. The applicant submits that such lack of reasoning on the viability and feasibility of a resolution plan approved by the CoC is itself unacceptable and the CoC's decision is liable to be declared as null and void by the Adjudicating Authority. It was totally silent that resolution plan submitted by Acme Chem limited may attract considerably Minimum Alternate Tax (MAT) liability under Section 115JB of the Income-tax Act 1961 and Self Assessment tax liability under Section 140A of the Income-tax Act, 1961. 14. It is submitted that in terms of provisions of Section 31(1) of IBC, 2016, the Adjudicating Authority can accord its approval to the resolution plan approved by CoC u/s. 30(4) of the Code only if Adjudicating Authority is sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixing a turnover of ₹ 200 crores could only help in NOCIL Limited or Lanxcess India Private Limited acquiring Merchem Ltd., (corporate debtor) resulting in getting a dominant position in the rubber chemical industry. The authorised officers of the Respondents 3, 4 and 5 who constituted more than 90% of the voting share confirmed their acceptance to reduce the turnover by 20% to ₹ 160 crores and ultimately the Resolution Professional revised the eligibility criteria reducing the average turnover to ₹ 160 crores only on receipt of confirmations from the members of CoC. 18. The Resolution Professional has submitted that the request made by the Applicant was forwarded to all the members of the CoC. As far as the postponement or continuation of the meeting is concerned, it is the responsibility of the RP, given the timeline mandated under the Code read with Regulations needs to complete the Corporate Insolvency Resolution Process in time. 19. The Resolution Professional has submitted that the applicant herein is not a party to the minutes of the meeting held on 12.09.2018 and he has not even attended the meeting. The RP has filed the application seeking approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble tribunal under Section 60(5) is designated for different purpose to ensure that the NCLT alone has jurisdiction when it comes to application and proceedings by or against the corporate debtor covered by the code making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings. 23. The Resolution Professional has submitted that the Applicant is attempting to mislead this Hon'ble Tribunal by stating that the average annual turnover for the past 3 years is ₹ 159.55 crores. In this connection, the Applicant is taking into account only the average net turnover and has not considered the turnover for 2017-18. The Average turnover of the successful Resolution Applicant for the past 3 years is ₹ 175 crores. 24. The Resolution Professional has submitted that the resolution plan of the Applicant with all the disclosures were forwarded to the members of CoC and with regard to the Current assets valuing ₹ 1476.61 lakhs, there was a discussion which is evident in the 6th meeting of the CoC. As far as the insurance premium of Rs, 198 lakhs is concerned, the Applicant has misdirected himself and is attempting to misle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted lower amount in the case of Acme Chem. There is no basis for the Applicant to contend that the consideration of payment to secured creditors by the Applicant would be ₹ 137.65 crores as against the payment of Acme Chem limited amounting to ₹ 109.80 cores which is 16.23% higher. 29. The RP has submitted that the Applicant herein has no vested interest to question the approval of the resolution plan. Resolution Professional has examined and prime facie come to the conclusion that it satisfies the requirement of the Code as well as the regulations and filed application before this authority seeking approval of the resolution plan. It is always open to this Hon'ble Tribunal to accept or reject the same. It has further been submitted that the application under Section 60(5) is not maintainable and if at all the Applicant is aggrieved the approval of the resolution plan he is always at liberty to approach NCLAT under Section 60(1) of the Code. Even Supreme Court has set out the circumstances under which Section 60 (5) can be applied. 30. Counsel for the CoC has submitted in his counter that Committee of Creditors has approved the plan of Acme Chem Limited by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 36. From the facts and circumstances of the present case, it is worth to be noted that the Resolution Applicant had expressed his inability to attend the CoC's meeting scheduled on 12.09.2018 due to religious constrains and requested the RP to fix any other date after 14.09.2018 for meeting of the CoC. However, the Resolution Professional refused to re-schedule the meeting. Therefore, a reasonable opportunity of being heard is not given to the applicant and the same is in violation of the principle of natural justice. As per Section 30 (5) of the I B Code, 2016, the resolution applicant is entitled to attend the meeting of the CoC in which the resolution plan of the applicant is to be considered. In this regard reliance is placed on the Judgment passed by the Hon'ble NCLAT in ANG Industries Ltd. v. Shah Brothers Ispat Pvt, Ltd in Company Appeal (AT) (Insolvency) No. 109 of 2018,, wherein the Hon'ble Appellate Tribunal while deciding the matter, relied upon the findings of Joint Parliamentary Committee and its earlier ruling in the matter of 'Rajputana Properties (P.) Ltd. (supra) and observed as under: .......... the Committee of Creditors while approvi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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