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TMI Blog2020 (10) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... om the stage of consideration of the Resolution Plans. The Resolution Professional shall place the Resolution Plans of H1 and H2 besides revised Resolution Plan of Appellants before the Committee of Creditors for consideration. The Committee of Creditors would take a call in according consideration to such Resolution Plans keeping in view the extended timelines. The period of judicial intervention shall stand excluded while computing the extended timelines of 270 days. - Company Appeal (AT) (Insolvency) No. 515 of 2020 Company Appeal (AT) (Insolvency) No. 516 of 2020 - - - Dated:- 19-10-2020 - [Justice Bansi Lal Bhat] Acting Chairperson , [Justice Jarat Kumar Jain] Member (Judicial) And [Shreesha Merla] Member (Technical) For the Appellant : Mr. Abhijeet Sinha, Mr. Soumya Dutta, Mr. Aditya Shukla, Advocates For the Respondent : Mr. Rajesh Gautam, Mr. Yashanand, Mr. Sushil Mehtani and Ms. Ridhima Sethi, Advocates JUDGMENT BANSI LAL BHAT, J. Company Appeal (AT) (Insolvency) No.515 of 2020 arises out of order dated 18th March, 2020 passed by the Adjudicating Authority (National Company Law Tribunal), Guwahati Bench, Guwahati in IA No.27 of 2020 in CP(IB) No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it had submitted two Plans during the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. While the first Plan was placed before Committee of Creditors and considered on 11th February, 2020, Appellants were provided opportunity to place a revised Plan before the Committee of Creditors on 12th February, 2020. The Appellants requested for 1-2 extra days to submit a revised Resolution Plan but the request was declined and the Appellants were excluded from CIRP during the Committee of Creditors meeting on 12th February, 2020 on the sole ground of paucity of time. It is further submitted that the Appellants submitted a 2nd Plan (revised Plan) on 14th February, 2020, which was unilaterally rejected by the Resolution Professional and never placed before the Committee of Creditors though it was submitted only two days after the submission of revised Plan of Successful Resolution Applicant and that too well within the 180 day CIRP period. It is submitted that the Resolution Professional acted in violation of the provisions of the I B Code embodied in Sections 25(2)(i) and 30(3) by not placing the Appellants revised Resolution Plan before the Committee of Creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. It is submitted that on 12th February, 2020 when Committee of Creditors met, it was informed that in their email Appellants had admitted anomalies in their Resolution Plan and were seeking two more days for further negotiation. It is submitted that the there was no representative of Appellants in meeting of Committee of Creditors held on 12th February, 2020 and as the timeline was due to expire on 24th February, 2020, Committee of Creditors decided to exclude the Appellants. Such decision was taken with 100% consent of Committee of Creditors members. It is further submitted that only two Prospective Resolution Applicants were left in the fray out of Four and Mr. Ngaitlang Dhar emerged as H1 with offer of ₹ 64.30 Crores plus CIRP Cost upfront. It is only after approval of Resolution Plan of Respondent No.4 on 12th February, 2020 that a revised offer was received from Appellants via email on 14th February, 2020 increasing the plan size to 65.65 Crores. It is submitted that the approval of Resolution Plan of Respondent No.4 which has received the approval of Adjudicating Authority does not suffer from any illegality or material irregularity, as alleged by the Appellants, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his context, is not without substance though it cannot be said that the same was done in an arbitrary fashion at the back of Appellants who had no knowledge about the Committee of Creditors meeting held on 11th February, 2020 being adjourned to 12th February, 2020 for consideration of the Prospective Resolution Plan when their representative was in attendance in the meeting held on 11th February, 2020. The Appellants, instead of participating in the meeting, probably on account of not revising their bid offer as suggested by the Committee of Creditors, chose to stay away but submitted a second plan/ revised plan on 14th February, 2020 which was never placed before the Committee of Creditors. Admittedly, the CIRP period had not expired as on 14th February, 2020. It is disputed by the Appellants that the Resolution Plan of Respondent No.4 had been approved by the Committee of Creditors on 12th February, 2020. Relying upon para 1 of the impugned order (at page 50 of the appeal paper book- Company Appeal (AT) (Insolvency) No. 516 of 2020) and para 6 of the impugned order (at page 53 of the appeal paper book- Company Appeal (AT) (Insolvency) No. 516 of 2020), it is emphasized on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As per the material placed before this Tribunal, the resolution plan submitted by the highest bidder has already been approved by the COC on 12.02.2020 with 100% voting and also submitted to this Tribunal for its approval. It also transpires from the written Minutes of Meeting dated 11.02.2020 of the 5th COC meeting that the petitioner insisted the COC to provide the individual score and the bid amount of all the RPAs before its presentation of plan and confronted with the COC in not providing that information which is highly uncalled for. It also transpires from record that the petitioner abstained from attending the meeting on 12.02.2020 and despite their absence, the COC applied its mind on the earlier plan submitted by the petitioner and taken conscious call. 3. Since the resolution plan of the highest bidder has already been approved with 100% voting, the above application is not only infructuous but also liable to be rejected on account of latches and lack of bona-fides on the part of the petitioners. 4. Accordingly, the above IA 27 of 2020 is rejected and the same stands disposed of as such. 9. A conjoint reading of the impugned orders passed in these two ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 read with Regulation 40 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016 praying for extension of period of Corporate Insolvency Resolution Process by another 90 days beyond 180 days which would expire on 25th February, 2020 for the reasons of non-approval of the resolution plan. 2. It is the submission of the RP that the COC in its 5th meeting held on 11.02.2020 concluded on 12.02.2020 declared one Mr. N. Dhar as highest bidder and the said decision of the COC is under consideration for approval with the higher authority of the COC and, therefore, prayed for further extension of CIRP period to 90 days with effect from 25.02.2020. 3. It is also submitted by the learned RP that the COC in its 5th meeting held on 11.02.2020 and 12.02.2020 has unanimously with 100% voting authorized him to apply for extension of CIRP process for a further period of 90 days. 4. Upon hearing the submission and perusing the record, this Tribunal feels that this is a fit case for grant of extension of time for a period of 90 days as sought by the RP. Accordingly, the above IA is allowed and the time for completion of CIRP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of 2020 purely of academic interest. However, taking note of the fact that the Appellants informed the Committee of Creditors through Resolution Professional about its intention to file a revised Resolution Plan/ second Resolution Plan which actually came to be filed on 14th February, 2020, we deem it appropriate to dwell on the issue whether in exceptional circumstances the timelines prescribed under I B Code can be relaxed to allow a prospective Resolution Applicant to submit a second/ revised Resolution Plan, more so when it merely involves a small period like one or two days as in the instant case. 12. Merely because the Appellants were excluded from consideration primarily on the ground of impending expiry of 180 days of CIRP, after seeking extension of 90 days in CIRP by the Resolution Professional from Adjudicating Authority such exclusion of Appellants is unwarranted and the Appellants could not be excluded from consideration of their revised Resolution Plan on the strength of earlier exclusion which had nothing to do with disqualification/ ineligibility. Admittedly, the Resolution Professional did not place the revised Resolution Plan of Appellants before the Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto-may well be an excessive interference with a litigant's fundamental right to non-arbitrary treatment Under Article 14 and an excessive, arbitrary and therefore unreasonable restriction on a litigant's fundamental right to carry on business Under Article 19(1)(g) of the Constitution of India. This being the case, we would ordinarily have struck down the provision in its entirety. However, that would then throw the baby out with the bath water, inasmuch as the time taken in legal proceedings is certainly an important factor which causes delay, and which has made previous statutory experiments fail as we have seen from Madras Petrochem (supra). Thus, while leaving the provision otherwise intact, we strike down the word mandatorily as being manifestly arbitrary Under Article 14 of the Constitution of India and as being an excessive and unreasonable restriction on the litigant's right to carry on business Under Article 19(1)(g) of the Constitution. The effect of this declaration is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commenceme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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