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TMI Blog2020 (10) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... member of the suspended Board of Directors of M/s SRS Meditech Limited and Ors. (for short the 'Corporate Debtor') assailing approval of the Resolution Plan of Vaibhav Build Tech Private Limited (Respondent No.3/ Successful Resolution Applicant) the Adjudicating Authority, National Company Law Tribunal, Chandigarh Bench, Chandigarh (for short 'Adjudicating Authority') primarily on the ground that the networth criteria, which was crucial, was overlooked and certificate produced by the Respondent No.3 in regard to its networth was fraudulent and sham which vitiated the whole exercise and approval of said Resolution Plan. 2. Before dwelling upon the grounds on which the approval of Resolution Plan has been assailed, it would be appropriate to briefly advert to the factual matrix of the case. The Adjudicating Authority admitted Application under Section 9 of Insolvency and Bankruptcy Code, 2016 (for short 'IBC') filed by an Operational Creditor viz Durga Enterprises. It happened on 2nd November, 2018. Subsequently Interim Resolution Professional (for short 'IRP') came to be appointed on 15th November, 2018. Corporate Insolvency Resolution Process was set in motion with public announc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the certificate had clubbed the networth of Respondent No.3 with another company viz JSV Motors & Construction Pvt. Ltd. though JSV Motors and Constructions Pvt. Ltd. was not a Resolution Applicant either singly or jointly with Respondent No.3. It is further submitted that the networth certificate is not in accordance with the provisions of the Companies Act, 2013. It is further pointed out that the networth of Respondent No.3 as on 31st March, 2018 and 2019 was only 24.65 lakhs and 2.93 crores respectively, which was much less than the eligibility criteria of Rs. 5 crores. The learned Counsel for the Appellant also submitted that Regulation 35 of the (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 has been violated as the valuers only asked to calculate liquidation value of plant and machinery and not entire assets of Corporate Debtor. It is submitted that Respondent No.2 failed to get the valuation of fixed assets properly and the current assets including receivables were not included in valuation. It is further submitted that the Resolution Professional as also the Committee of Creditors failed to ensure maximization of value of the assets of the Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on financial terms of the Resolution Plan were conducted. It is further submitted that CoC approved the Resolution Plan submitted by Respondent No.3 with about 93% of the voting shares. The approved Resolution Plan is in the process of implementation and out of total value of Rs. 22.10 crores Respondent No.3 has already deposited an amount of Rs. 30 lakhs being 5% of the cash contribution of the Resolution Plan and has already made an upfront payment of Rs. 3 crores out of total contribution of Rs. 6.10 crores besides making investment of Rs. 4.55 crores on building infrastructure. It is submitted that the Appellant has no locus standi with respect to valuation of the assets of the Corporate Debtor and commercial wisdom of CoC and the decision of the Adjudicating Authority cannot be assailed by the Appellant on this aspect. 6. Heard learned Counsel for the parties and waded through the record. It is not in dispute that as per eligibility criteria laid down by the CoC the Resolution Applicant was required to have a networth of Rs. 5 crores. Appellant is aggrieved of acceptance of bid of Respondent No.3 on the score that the Respondent No.3 did not comply with the networth eligibi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to the eligibility of Respondent No.3 as regards networth criteria. It is too late in the day to accept the argument emanating from the Appellant that the networth of the Resolution Applicant calculated on the basis of market value of fixed assets minus secured loans is not in accordance with the definition of networth under Section 2 (57) of the Companies Act, 2013. No objection to calculation having been raised at the relevant time and the criteria adopted for arriving at the conclusion in regard to networth not being shown to be fundamentally flawed and perverse, argument raised on this score is repelled. No objection on this score can be permitted to be raised by the Appellant after the Resolution Plan has been approved by the Committee of Creditors with huge majority of voting share. 7. Objection in regard to valuation conducted by the Resolution Professional and approved by the Committee of Creditors is equally without substance. It is not disputed that two registered Valuers were appointed to determine fair value and liquidation value of the Corporate Debtor. Such valuation reports were placed before Committee of Creditors which in its 6th meeting held on 18th July, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted in (2019) SccOnline SC 257" is loud and clear. The commercial wisdom of CoC has been given paramount status without any judicial intervention for ensuring completion of the resolution process within the timelines prescribed by IBC. Judicial review of a Resolution Plan approved by the CoC is limited as laid down in "Committee of Creditors of Educomp Solutions Ltd. vs. Ebix Singapore Pte. Ltd. & Anr." 9. Implementation of the approved Resolution Plan is underway. Respondent No.3 is stated to have already deposited an amount of Rs. 30 lakhs being 5% of cash contribution of the Resolution Plan having total value of Rs. 22.10 crores. An upfront payment of Rs. 3 crores besides investment of Rs. 4.5 crores on building infrastructure for setting up plant and machinery for the Corporate Debtor is said to have been made by Respondent No.3. It has been brought to our notice that the plant and machinery of the Corporate Debtor had been set ablaze and a criminal case stands registered against the Appellant and is pending judicial determination before learned Sessions Judge, Gautam Buddh Nagar, Uttar Pradesh. Admittedly, the Appellant is an Ex-Director of the Corporate Debtor and the law ..... 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