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TMI Blog2019 (4) TMI 1937X X X X Extracts X X X X X X X X Extracts X X X X ..... The total debt outstanding as adzmitted by the resolution professional on 5th September, 2018 was ₹ 1356.89 Crores and the requirement of the expression of interest is ₹ 100 Crores , which is less than the outstanding dues. It is true that the clause relating to forfeiture of ₹ 100 Crores was arbitrary but persons having not challenged the expression of interest published on 14th May, 2018, till the resolution plan was approved by the Committee of Creditors , we are of the view that after approval of resolution plan , it was not open to any person to challenge the same - The shareholders and promoters being ineligible to file the resolution plan under Section 29A, they have no right to raise their grievance with regard to the expression of interest published on 14th May, 2018 fixing earnest money deposit of ₹ 100 Crores - In this background, it was not open for the Adjudicating Authority to entertain Interlocutory Application Nos. 409/2018 and Interlocutory Application Nos. 450/2018, which were filed by the shareholders and promoters , who were ineligible to submit the resolution plan and that too after approval of the resolution pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the promoter and another by the resolution applicant and instead of approving the resolution plan already approved by the Committee of Creditors and instead of passing order under Section 31 of the Insolvency and Bankruptcy Code, 2016 (for short the I B Code ) have remitted the matter with direction which amounts to initiation of resolution process de novo from the stage of calling of Expression of Interest . 2. For proper appreciation, it is desirable to note the relevant dates as stated below: The application for initiation of corporate insolvency resolution process against Sevenhills Healthcare Private Limited (Corporate Debtor) was admitted on 13th March, 2018 and Interim Resolution Professional was appointed. The Resolution Professional invited Expression of Interest on 14th May, 2018 and pursuant to which received Expression of Interest from 18 Resolution Applicants . As per the decision of the Committee of Creditors an Earnest Money Deposit ( EMD ) of ₹ 100 Crores was required to be deposited by the Resolution Applicants as in many cases it was seen that after approval of the resolution plan , the resolution applicants do not turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discouraging to the potential resolution applicants and it is in stark contrast to the other corporate insolvency resolution process which was initiated against M/s. Viceroy Hotels Limited; M/s. Electrosteels Limited and M/s. Essar Steel India Limited. 7. Another Interlocutory Application 410/2018 was filed by M/s. Well-Do Holdings and Exports Private Limited , one of the member of the Consortium and resolution applicant , who initially expressed its interest for the Resolution Plan . 8. It was alleged by the said resolution applicant that the expression of interest was issued on 14th May, 2018 and prescribing net worth of at least ₹ 200 Crores at the group level for application in the immediate preceding for the financial year for a body corporate or a member of consortium. According to M/s. Well-Do Holding and Exports Private Limited the net worth of the said applicant was around ₹ 2900/- Crores as on 31st March, 2017. The plea taken by the said applicant was that on 1st June, 2018, Resolution Professional confirmed the eligibility of the applicant and invited it for submission of a resolution plan and the request for proposal was made availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be any non-refundable or forfeiture component thereof. 11. Learned counsel appearing on behalf of the appellants submitted that the Adjudicating Authority had no jurisdiction to entertain the Interlocutory Applications at the final stage as the resolution plan had already been approved by the Committee of Creditors or was pending for consideration under Section 31 of the I B Code. 12. It was further submitted that all the Interlocutory Applications were afterthought and were not filed when the expression of interest were called for and no challenge was made at the appropriate stage. Further according to the appellants, the Adjudicating Authority cannot sit in appeal over the financial decision of the Committee of Creditors which was entitled to fix quantum of the earnest money deposit at ₹ 100 Crores, has been held to be arbitrary or excessive. 13. According to the appellants, the finding of the Adjudicating Authority that the earnest money deposit is unreasonable and is not based on any financial matrix and if the total amount is taken into consideration, it will be evident that ₹ 100 Crores earnest money deposit is not excessive. 14. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation Nos. 410/2018 filed by M/s. Well-Do Holdings and Exports Private Limited , one of the part of consortium is an afterthought. The Resolution Professional has intimated the said applicant on 1st June, 2018 that its eligibility is confirmed and invited the applicant to submit the resolution plan within the period. The request for proposal was made available to the said applicant on 28th June, 2018 and the addendum to the request for proposal was made available on 19th July, 2018. Clause 4.9 relating to the earnest money deposit was there but it was not challenged by the said applicant till August, 2018. The last date for submitting the resolution plan was 9th August, 2018 but the aforesaid resolution applicant had not filed the plan nor deposited the earnest money . In this background, it was not open to the Adjudicating Authority to entertain the I.A. No. 410/2018 filed by M/s. Well-Do Holdings Exports Pvt. Ltd. , after approval of the resolution plan of M/s. BRS Ventures Investment Limited (BRSVIL). 23. In Arcelor Mittal vs. Satish Kumar Gupta reported in (2019) 2 SCC 1, the Hon ble Supreme Court noticed a similar situation where resolution plan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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