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TMI Blog2020 (7) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the Appellant and Respondent, No 1 was the joint Resolution Applicant. Therefore, any application for rectification of the Resolution Plan could have been moved by both the Resolution Applicants. Thus the Adjudicating Authority had no jurisdiction to allow amendment in the Resolution Plan, submitted by the appellant and the Respondent No.1 as co-applicants in the Resolution Process, without there being any consent on the part of the Appellant. Appeal allowed. - Company Appeal (AT) (Insolvency) No. 1351 of 2019 - - - Dated:- 28-1-2020 - Justice Venugopal M. Member (Judicial), Kanthi Narahari Member (Technical) And V. P. Singh Member (Technical) For the Appellants : Shri Abhijeet Sinha, Shri Aditya Shukla and Shri Nitin Kumar Chahar, Advocates For the Respondents : Shri Piyush Singh, Advocate JUDGMENT [PER; V. P. SINGH, MEMBER (T)] This appeal emanates from the Order dated 20th November 2019 passed by the Hon ble Adjudicating Authority, National Company Law Tribunal, Kolkata Bench, Kolkata in C.A. (IB) No. 1131 of 2019, C.P (IB) No.596 of 2017 by which the Adjudicating Authority has allowed the Application for rectification of the Resolution Plan a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout there being any consent on the part of the Appellant. The Respondent No.1, after having agreed to 34,00,000 shares allotted to the Appellant, and after such shares were issued, cannot now turn around and contend otherwise. The respondent No.1 is estopped from contending that the Appellant and its nominees do not have 34,00,000 shares. The following issue arises for our consideration: (i) Whether the Hon ble Adjudicating Authority had jurisdiction to entertain an application for rectification of Resolution Plan and making substantial changes in the Plan, after a lapse of 13 months of the completion of CIRP, even after the approval and implementation of the Resolution Plan? (ii) Whether the Hon ble Adjudicating Authority had the jurisdiction to alter a Resolution Plan submitted by the appellant and the Respondent No.1 as co-applicants in the Resolution Process, without there being any consent on the part of the Appellant? (iii) Whether substantial rectification of the Resolution Plan resulting in a change in shareholding of the shareholders could be brought under the purview of the typographical/arithmetic/clerical error? We have heard the arguments of the Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,650.00 (135.00) 3,515.00 100% Stock Options will be issued and subscribed @ ₹ 0.50 per Share within four years of NCLT Approval of this Resolution Plan. Note:- Regulation 37(1)(i) of the CIRP Regulations 2016 provides for inclusion in any Resolution Plan as follows Issuance of Securities of the Corporate Debtor, for cash, Property, Securities or in exchange of Claims interest. The combined shareholding of the Resolution applicants as per the approved Resolution Plan was 85%, for which consideration has been paid by both the Resolution applicants accordingly. M/s United Tradeco FZC has paid ₹ 3160 lacs, whereas QVC Exports Private Limited has paid 340 lacs. The Adjudicating Authority has mentioned in the order that the percentage of holding of both parties stands at 75% and 10% which is not at all disputed . Thus, the number of shares according to these percentage ,which needs to be issued and allotted to M/s United Tradeco FZC and QVC Exports Private Limited respectively. The Adjudicating Authority had further stated that: 4. Considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares. The portion of equity allotted to Employees of the Cosmic Ferro Alloys Limited remains the same. The Adjudicating Authority has observed that joint shareholding of both the Resolution Plan, was 85% for which the consideration has been paid for by both the parties accordingly. Respondent No 1, M/s United Tradeco FZC has paid ₹ 3,160 lacs, and the appellant, QVC Exports Private Limited has paid ₹ 340 lacs. Considering the investment of the Resolution Plan, the Adjudicating Authority has stated in the order that mistake occurred in the resolution plan which was approved by this adjudicating authority vide order Dt 11.10.2018. The resolution plan stands corrected. Accordingly, the equity shares which needs to be issued and allotted to the Respondent No 1, M/s United Tradeco FZC and appellant, QVC Exports Private Limited, respectively work out to 75,00,000 and 10,00,000. The above presumption is without any basis, as the Adjudicating Authority was having no role in interfering in terms of the approved Resolution Plan, which was executed 13 months back. The Adjudicating Authority has failed to consider that Resolution Plan was submitted jointly by Applicant and R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oys for ₹ 6.5 crores plus one crore subject to the valuation. It is also on record that on 31st July 2019 Share Transfer Agreement was executed, but the same was never given effect to, as there were a few preconditions. After the execution of the Share Transfer Agreement, the Respondent No.1 changed the course of action and filed company application for rectification of the resolution plan before the Adjudicating Authority. The implication of the order of the Adjudicating Authority has caused a substantial reduction of the shareholding of the Appellant from 34% to 10% in the company Cosmic Ferro Alloys. It is important to mention that Hon ble Supreme Court has not permitted the change in resolution plan after attaining the finality. In case of Rahul Jain v. Rave Scans (P) Ltd., (2019) 10 SCC 548: 2019 SCC OnLine SC 1447 at page 553 Hon ble Supreme Court held that: 16. In the present case, it is noticeable that no doubt, Hero was provided with 32.34% of its admitted claim as it has dissented with the plan. On the other hand, Tata Capital Financial Services Ltd. was provided with 75.63% of its admitted claim; other financial creditors (Indian Overseas Bank, Bank of Baroda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be exercised for doing that which is specifically prohibited by the Code (Sankatha Singh v. State of U.P. [AIR 1962 SC 1208: 1962 Supp 2 SCR 817: (1962) 2 Cri LJ 288]). It is true that the prohibition in Section 362 against the court altering or reviewing its judgment is subject to what is otherwise provided by this Court or by any other law for the time being in force . Those words, however, refer to those provisions only where the court has been expressly authorised by the Code or other law to alter or review its judgment. The inherent power of the court is not contemplated by the saving provision contained in Section 362 and, therefore, the attempt to invoke that power can be of no avail. Given the law laid down by Hon ble Supreme Court it is clear that under inherent powers of the Court can act the Adjudicating Authority could only interfere in the field here I B Code 2016has authorized to do so. After approval of the Resolution Plan by the Adjudicating Authority can exercise his powers U/S 60 of the I B Code 2016 Code provides that: 60. Adjudicating Authority for Corporate persons. - (1) The Adjudicating Authority, in relation to insolvency resolution and liquida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code, therefore it is not Code, therefore it is not permitted to modify the Resolution Plan under the guise of inherent powers of the Tribunal. Hon ble Supreme Court in Bijay Kumar Saraogi v. State of Jharkhand, (2005) 7 SCC 748 at page 748 has held that: 3. We find no reason to interfere with the order of the High Court because a mere perusal of Section 152 makes it clear that Section 152 CPC can be invoked for the limited purpose of correcting clerical errors or arithmetical mistakes in the judgment. The section cannot be invoked for claiming a substantive relief which was not granted under the decree, or as a pretext to get the order which has attained finality reviewed. If any authority is required for this proposition, one may refer to the decision of this Court in State of Punjab v. Darshan Singh [(2004) 1 SCC 328] . Thus it is clear that the order which has attained finality cannot be reviewed under the inherent powers of the Court. This power can only be exercised to correct clerical errors ..... X X X X Extracts X X X X X X X X Extracts X X X X
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