9911796707
TMI Blog2020 (6) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... ider the relief of setting aside the impugned order of NCLT, Hyderabad Bench - the order of NCLT Hyderabad Bench upheld. - CO. APPEAL (AT) (INS) NOS. 918-919 OF 2019 - - - Dated:- 29-5-2020 - Jarat Kumar Jain, Judicial Member Balvinder Singh And Dr. Ashok Kumar Mishra, Technical Member S.C. Das, Adv. for the Appellant. E. Sudhir Reddy, Jaideep Singh, Kartik Dabas, Nirav Shah, Shashank Agarwal, Satendra K. Rai, S. Sinha, Rajiv Kapur and Akshit Kapur, Advs. for the Respondent. JUDGMENT Dr. Ashok Kumar Mishra, 1. The Appellant has filed the Appeal against the Arbitrary rejection of the Resolution Plan submitted by the Appellant company along with others which has arisen out of impugned order passed by NCLT Hyderabad Bench vide its order dated 26th July, 2019 and order of corrigendum dated 31.07.2019. Apparently, the reason for the dismissal of the Resolution Plan by the Committee of creditors were on account of Expression of Interest (EOI) deviation, and non-fulfillment of other eligibility criteria. 2. This is case of an application filed by State Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor- I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as ( Phoenix ). 5. It is stated by the Appellant that subsequently the Resolution Professional issued a Bid Process Memorandum and Evaluation Matrix to submit the Resolution Plan for the Corporate Debtor on September 4th 2018 ( Process Memorandum ) inviting the Resolution Plan from the person who submitted Expression of Interest in response to the EOI. It is further stated by the Appellant that the Original Consortium submitted a Resolution Plan on October 4th, 2018 and First Global submitted its updated Resolution Plan on November 5th, 2018 along with Phoenix ARC as financial sponsor for the said Resolution Plan. Thereafter, the CoC was informed that Phoenix did not want to be categorized as a Resolution Applicant along with Global. In order to include a fresh Resolution Applicant or make any deviations in the EOI, the CoC was required to approve the deviation in the EOI and restart the EOI process. 6. It is further submitted by the Appellant in the 14th CoC meeting held on 12th November 2018, the CoC had rejected the deviations of certain terms and condition of the EOI and the Process Memorandum in relation to the Resolution Plan received from First Global. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted by the Appellant that pursuant to the submission of the First Resolution Plan and the Second Resolution Plan, by the Resolution Applicant, vide email dated 30.10.2018, it was submitted by the Resolution Applicant on behalf of the consortium that: - (a) As per the last audited financial statements duly certified by the Chartered Accountant, the turnover for the consortium was ₹ 2081.63 Crores. Thus, the Business Capacity Eligibility Criteria was also duly fulfilled. (b) As certified by the Charted Accountant, the net worth of the Consortium was ₹ 463.83 Crores and the total Assets Under Management (AUM ) was ₹ 6788.00 Cores. Thus, the net worth Eligibility Criteria was also duly fulfilled. (c) Resolution Applicant further stated in the e-mail. that the Consortium has already submitted the details pertaining to compliance with section 29 A of the Code. 12. The Applicant again put forth the suggestion to consider the Applicant along with its holding Company, First Global Stock broking Pvt. Ltd., and Mr. Shanker Sharma and Ms. Devina Mehra as the consortium members. 13. It is further stated that as an alternative and seeing that the CoC was unre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Plan should also be submitted by 05.11.2018. Complying with the directions of the CoC, the Applicant thus deposited the balance EMD of ₹ 3 Crores in the designated account on 05.11.2018. After the compliance with the direction of the CoC had been made into, no discussions whatsoever took place between the Applicant and the Resolution Professional/CoC between 05.11.2018 and 20.11.2018. The Applicant was thus appalled to discover that in the email dated 21.11.2018 sent by the Resolution Professional to the Applicant, one of the grounds that had been cited by the Resolution Professional for rejection of the resolution plan was that EMD had not been deposited. 15. It is further stated that on 01.11.2019, the Resolution Professional also sent an email to the Applicant stating that the CoC on 31.10.2018 in its meeting inter alia permitted the Applicant to deposit the balance EMD of ₹ 3 crores by 05.11.2018. That before the submission of the 3rd Resolution Plan, the payment of the balance EMD (₹ 3 crores) was also duly made by the Applicant. It is further stated that, the Email dated 01.11.2018 by the Resolution Professional for extension of the timelines for submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d July 31st 2019. The adjudicating Authority had further directed the Respondent to conduct the liquidation as a going concern. 18. It is also submitted by the Respondent that the present Application has been filed with mala fide intent. The Appellant has failed to provide any documents in support of its Application. Respondent further submits that the present Application has been filed merely on the basis of conjectures and surmises and the contents of the same are bald and unsubstantiated. 19. Further it submitted by the Respondent that it is imperative to refer to the Judgement of the Hon'ble Supreme Court in the matter of Swiss Ribbon Pvt. Ltd. v. Union of India ors being Writ Petition (Civil) No. 99 of 2019 wherein the Hon'ble Supreme Court has clearly held that the primary focus of the legislation is to ensure revival and continuation of the Corporate Debtor by protecting the corporate debtor from its own management and from a corporate death by Respondent. 20. The said observation of the Hon'ble Supreme Court has further been relied on by this Appellate Tribunal in the judgement of Jindal Steel and Power Limited v. Arun kumar jagatramka being Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Creditors of Essar Steel India Limited v. Satish Kumar Gupta Ors. Civil Appeal No.8766-67/2019, to support the commercial wisdom of CoC. Finally, he has also submitted that the present appeal is misconceived in law and facts and the Application needs to be dismissed. 24. We have gone through the submission of the Appellant, SBI and Respondent it is observed that the Appellant has strictly not complied with the terms and conditions of Expression of Interest (EOI) dated 14.08.2018 and non-submission of EMD along with submission of Resolution plan dated 4.10.2018 as required by the Bid Process Memorandum. They have also deviated on other parameters. And hence CoC after deliberation has rejected the plan and accordingly the Resolution Professional has communicated to the Resolution Applicant. Since, liquidation proceedings as a going concern is already on from July 2019 and there is always scope for Resolution Applicants to opt for Arrangements under Section 230-232 of the Companies Act, 2013, if they are eligible in accordance with provisions of Insolvency and Bankruptcy Code, 2016 along with relevant Rules. Hence there is no merit in the case to consider the relief of setti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
