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TMI Blog2021 (3) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... uation report filed by Mr.R.K. Patel and to appoint another valuer convening another CoC? HELD THAT:- This Tribunal finds that the Resolution Professional had complied with the provisions of Regulation 27 and 35 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, before arriving at a decision to place the Resolution Plan before the CoC. The CoC approved the Resolution Plan with 100% voting right for approval by the Adjudicating Authority. Under Section 31(1) of the Code, for final approval of a Resolution Plan, the adjudicating authority has to be satisfied that the requirement of Sub Section (2) of Section 30 of the code has been complied with. On a verification of the Resolution Plan submitted by M/s Lissie Medical Institutions it is seen that requirement of Sub- Section (2) of Section 30 has been followed before submitting the Resolution Plan for the approval of the Adjudicating Authority. Section 31(1) of the Code lays down in clear terms that for final approval of a Resolution Plan, the Adjudicating Authority has to be satisfied that the requirement of Sub-Section (2) of Section 30 of the Code has been complied with. It is worthwhile to not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short) against M/s PVS Memorial Hospital Private Limited. The Committee of Creditors (Hereinafter referred to as CoC) in their 27th Meeting held on 26th December, 2020 had approved the Resolution Plan of the Resolution Applicant M/s Lissie Medical Institution (Herein after referred as RA). 3. It is stated in the I.A that even though the Corporate Debtor (CD for short) was not functioning for more than two years, as per the orders of Government of Kerala under the Disaster Management Act, 2005, the hospital was used as Covid Care Centre for which the State Government made it operational spending a huge amount. As per the CoC Approved Plan, the employees of CD would get 99.29% of their admitted claim, whereas, the other operational creditors other than employees and workmen would get only 2.34% of the admitted claim. This category of creditors include 44 creditors having admitted claims to the tune of ₹ 13,01,55,.997/- (Rupees Thirteen Crores, one lakh fifty five thousand nine hundred and ninety seven only) who have rendered healthcare services to the patients visiting the CD on the basis of a consultancy basis. The nature of services rendered by applicant herein is similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the RA on 1.10.2020, while the Government of Kerala spent huge amount to put the hospital back in action. Therefore, if a fresh valuation is taken on the current circumstances, the entire valuation would prove to be totally different. 6. It is further stated that while the average Fair value of the Land and Building is ₹ 161.95 Crores and the average Liquidation Value of Land and Building is ₹ 121.32 Crores, the value as per Resolution Plan is only ₹ 126 crores, which is just above the Liquidation Value. This is clearly kept with the ulterior motive to show namesake compliance , whereas in reality the real value of the asset with Government's infusion of funds is even far more than the average fair value viz., ₹ 161.95 crores. The Resolution Plan submitted based on the above Valuation Report will only be beneficial to the RA instead of all the stakeholders. This recommended Resolution Plan fails the test of resolving the insolvency, instead it takes the character of distress selling of the assets to meet the ends only three stakeholders viz., a section of Financial Creditors, Employees and workmen and the Resolution Applicant. Since the CIRP was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIVIL) NO. 99 OF 2018 in the matter of Swiss Ribbons Private Limited had held that classification between various class of creditors is neither discriminatory, nor arbitrary, nor violative of Article 14 of the Constitution of India. 12. The Applicant is a not a full time employee of the CD and his name is not entered in the muster rolls of the corporate debtor as Employee . The applicant was acting as consultant of the Corporate Debtor and the Corporate Debtor done the Tax Deduction at Source while paying the wages. There is no employment contract between the Applicant and the Corporate Debtor. Hence there is a clear demarcation between the Doctors who were the employees and doctors who were the consultants. There is no discrimination or arbitrariness among the claimants and the claims are admitted based on the claim forms submitted by the Applicant. The Respondent had not classified the Applicant doctors as Operational Creditors . Respondent had arrived at the classification of the Creditors based on the nature and type of claim forms submitted by the Claimants. The Applicant has submitted his claim in Form B specified under the CIRP Regulations. The Form B filed by the Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Persons) Regulations, 2016. This point has been dealt with in the case of Essar Steel (supra). We have quoted above the relevant passages from this judgment. 27. It appears to us that the object behind prescribing such valuation process is to assist the CoC to take decision on a resolution plan properly. Once, a resolution plan is approved by the CoC, the statutory mandate on the Adjudicating Authority under Section 31(1) of the Code is to ascertain that a resolution plan meets the requirement of sub-sections (2) and (4) of Section 30 thereof. We, per se, do not find any breach of the said provisions in the order of the Adjudicating Authority in approving the resolution plan. Respondent received the valuation reports from the Registered Valuers during May, 2020. The value arrived at by the Registered Valuers are mere guiding light to the CoC to take a commercial decision and the said estimated values are not binding on the CoC. The 15.92% variance in the value of the land in two reports is not a significant variation as-the Fair Value and Liquidation Value has been arrived at based on many other factors. The Applicant made a bald allegation of namesake compliance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the applicant and the Resolution Professional who appeared in person, through video conferencing. 18. The only question to be decided is as to whether the applicant is eligible to get the reliefs to reject the Resolution Plan submitted by the Resolution Applicant M/s Lissie Medical Institutions and also to reject the valuation report filed by Mr.R.K. Patel and to appoint another valuer convening another CoC.? 19. The bare reading of the history of the case mentioned above makes it crystal clear that the Resolution Professional took all steps as per the provisions of IBBI Regulations, before submitting the Resolution Plan to the CoC for its approval. Thereafter, only after the approval of CoC, the Resolution Professional filed the Resolution Plan for approval of this Adjudicating Authority. It is seen that wide publicity has been made inviting Expression of Interest for getting a prospective Resolution Applicant, so that the maximum value be received for the Corporate Debtor s properties. If the contention of the applicant is accepted, a question arises here why any other interested persons, who can offer a more valued Resolution Plan than the present one has not come f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied. In the case of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta, decided on 15th November, 2019 in Civil Appeal Nos. 8766-8767 of 2019 (2019 SCC Online SC 1478).) it was held that the scope of interference by the Adjudicating Authority is limited judicial review. The relevant portion of para 46 of the said judgment is quoted below: 46 .This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its assets; and that the interests of all stakeholders including operational creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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