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TMI Blog2019 (4) TMI 1985X X X X Extracts X X X X X X X X Extracts X X X X ..... n and reconsider the already approved resolution plan is confined by the scheme of the I and B Code and the interpretation of the same in the judgment of the hon'ble Supreme Court in K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS [ 2019 (2) TMI 1043 - SUPREME COURT ] the role of the Adjudicating Authority in matters challenging the decision of CoC, accepting or rejecting the resolution plan is limited to the grounds mentioned in section 30(2) and the purely commercial decisions of CoC cannot be adjudicated by the Adjudicating Authority as they are non-justiciable. The successful resolution applicant shall obtain the required necessary approvals required under any law for the time being in force within a period of one year from the date of this order or within such period as provided for in such law, whichever is later - the resolution plan with modifications is approved - moratorium declared. - M. A. Nos. 1363 of 2018 and 602 of 2019 in C. P. No. 1095 /I&BP/NCLT/MAH/ 2017. - - - Dated:- 8-4-2019 - V. P. SINGH (Judicial Member) and RAVIKUMAR DURAISAMY (Technical Member) Dushyant Dave and Naina Agrawal for the resolution professional. Pankaj Vijay and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion plan if required. In the eighth CoC meeting held on October 24, 2018, the Dera Finvest P. Ltd., and Mr. Rajendra Jaiswal, resolution applicants revised their resolution plan to ₹ 23. 6. Mr. Hitesh Demble of Dera Finvest P. Ltd., clarified that he is not a related party of the corporate debtor as one share of corporate debtor was allotted to each of the unsecured creditors and by them also being unsecured creditors of the corporate debtor, they were also allotted one share of the corporate debtor. It is stated that the said share was transferred back to the promoters of the corporate debtor by financial year ended March 31, 2016. Further, it was stated that at no point of time, they had been mentioned as promoters of the corporate debtor and that it has provided an undertaking to the resolution professional that he is not disqualified under section 29A. 7. The ninth CoC meeting was held on October 26, 2018 wherein the plan submitted by Mr. Gopal Gupta was disqualified for non-representation and incomplete documentation. Therefore, resolution plans of only two resolution applicant were considered henceforth. In the tenth CoC meeting, the Dera Finvest P. Ltd., improve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% Total 124,11,68,169 23,51,81,849 *The resolution applicant has submitted that it shall augment/modify the payment being made to the certain class of operational creditors from 1 per cent. in the existing resolution plan to 20 per cent. Consequently, the amount that shall be payable to the said class of operational creditors would be ₹ 1,83,41,780 instead of ₹ 9,17,083 as has been proposed earlier. 11. The plan proposes the following mode of financing : (a) By way of equity and loans to be brought in by the resolution applicant, directors, their family members, associated and relative form their internal accruals and accumulated net worth without resorting to external borrowings. The amount to be brought in by the resolution appli cant shall be divided into equity and loans as under : A. Equity 3 crores B. Loans 20.51 crores Total 23.51 crores (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 22.78 crores and the fair market value of the corporate debtor is ₹ 32.48 crores. As compared to this, the amount offered in the resolution plan is ₹ 23.51 crores apportioned to all the stakeholder which is more than the average liquidation value. 16. About the eligibility under section 29A of the IBC, the resolution applicant has submitted an affidavit stating that it is not ineligible under section 29A of the I and B Code. 17. About section 30(2), the RP has submitted that the resolution plan complies with section 30(2) as follows : (a) The resolution plan provides for the payment of insolvency reso lution process costs in priority to the repayment of other debts of the cor porate debtor. Payment of debt of the operational creditor is more than the amount that would be payable to the operational creditor in the event of liquidation of the corporate debtor and provision is made to pay the oper ational creditors in priority over financial creditors in terms of section 30(2)(a) and (b) of the Code read with regulation 38(1). (b) Section 30(2)(b) provides for payments of debts of the operational creditor which shall not be less than the amount to be paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons) Regulations, 2016 certifying that : (a) The resolution plan complies with all the provisions of the I and B Code and applicable regulations thereunder and does not contravene any of the provisions of the law for the time being in force ; (b) The resolution applicant has submitted an affidavit under section 30(1) of the I and B Code confirming its eligibility under section 29A of the I and B Code to submit resolution plan. The contents of the said affidavit are in order ; (c) The said resolution plan has been approved by the CoC by the provisions of the I and B Code and the CIRP Regulations made thereunder. The resolution plan has been approved by 98.72 per cent. of the voting share of financial creditors after considering its feasibility and viability and other requirements specified by the CIRP Regulations ; (d) RP sought a vote of members of the CoC by an electronic voting system which was kept open at least for 24 hours as per regulation 26. 20. The resolution plan provides that the supervision of the resolution plan is to be done by the monitoring committee consisting of the present RP, as head of the monitoring committee, and one nominee from Punjab Nation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rkar Developers P. Ltd., has filed an affidavit dated January 30, 2019 as an application for intervention, stating that resolution applicant of the approved resolution plan consists of persons who are accused in a criminal case that is still ongoing and hence is incompetent to participate in the proceedings. The affidavit is stated to be filed for the filing of the order of the hon'ble District Judge-15 and Additional Sessions Judge ; Nagpur dated October 27, 2017 in Misc. Cri. Application No. 2750 of 2017 and order of the hon'ble District Judge-13 and Additional Sessions Judge ; Nagpur dated January 9, 2018 in Misc. Cri. Application No. 2750 of 2017 for the perusal of this Tribunal. Upon perusal of the order dated January 9, 2018 it is observed that prima facie it appears that there was no modus operandi seen on the part of the applicants that they deceived to the informant by selling the land which was reserved for development purpose and that it instead of a case of cheating, it is a civil dispute. Thus the present affidavit/application is not maintainable and the said documents are irrelevant for the present proceedings. 28. The erstwhile promotor and director of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired under regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 31. The objections regarding the promotor/director of the corporate debtor not being given the two rejected resolution plans are sans merit because that was not even put for voting of the CoC and hence not maintainable as this along with other remaining objections are directly challenging the commercial wisdom of the CoC in approving or rejecting the resolution plan which is prohibited by the judgment of the hon'ble Supreme Court in K. Sashidhar v. Indian Overseas Bank [2019] 213 Comp Cas 356 (SC), in Civil Appeal No. 10673 of 2018 order dated February 5, 2019. 32. There is yet another M. A. being No. 602 of 2019 filed by Chhattisgarh Distilleries Ltd., filed on February 13, 2019 under section 60(5) of the I and B Code seeking, among other things, directions to permit the applicant to submit its resolution plan for consideration of the resolution professional and CoC under section 30(3) of the I and B Code. It is submitted that section 7 petition against the corporate debtor was admitted by this Tribunal on February 14, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o counts firstly, the resolution applicant has come after the submission of the approved resolution plan to the Adjudicating Authority, and secondly, the CoC or RP has not sought any relief to recall the approved resolution plan and for allowing them to reconsider the approved resolution plan along with the new resolution plan offering better value. The power of this Bench to suo motu direct the CoC to consider the new resolution plan and reconsider the already approved resolution plan is confined by the scheme of the I and B Code and the interpretation of the same in the judgment of the hon'ble Supreme Court in K. Sashidhar v. Indian Overseas Bank [2019] 213 Comp Cas 356 (SC) in Civil Appeal No. 10673 of 2018 order dated February 5, 2019 the role of the Adjudicating Authority in matters challenging the decision of CoC, accepting or rejecting the resolution plan is limited to the grounds mentioned in section 30(2) and the purely commercial decisions of CoC cannot be adjudicated by the Adjudicating Authority as they are non-justiciable (page 396) : Whereas, the discretion of the Adjudicating Authority (National Company Law Tribunal) is circumscribed by section 31 limited to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no provision in the I and B Code which empowers the Adjudicating Authority (National Company Law Tribunal) to oversee the justness of the approach of the dissenting financial creditors in rejecting the proposed resolution plan or to engage in judicial review thereof. Con cededly, the inquiry by the resolution professional precedes the consideration of the resolution plan by the CoC. The resolution pro fessional is not required to express his opinion on matters within the domain of the financial creditor(s), to approve or reject the resolution plan, under section 30(4) of the I and B Code. At best, the Adjudi cating Authority (National Company Law Tribunal) may cause an enquiry into the 'approved' resolution plan on limited grounds referred to in section 30(2) read with section 31(1) of the I and B Code. It cannot make any other inquiry nor is competent to issue any direction in relation to the exercise of commercial wisdom of the financial creditors be it for approving, rejecting or abstaining, as the case may be. Even the inquiry before the Appellate Authority (NCLAT) is limited to the grounds under section 61(3) of the I and B Code. It does not postulate jurisdiction to u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan. (e) It is also worthwhile to mention that 270 days was over on November 12, 2018 and the new resolution applicant, namely, Chhattis garh Distilleries Ltd., filed MA on February 13, 2019 which was very much after the stipulated date of 270 days'. Preamble of the IBC is, inter alia, pro vides for insolvency resolution of corporate persons in a time bound man ner for maximisation of value of assets of such persons. (f) In the instant case though this new resolution applicant proposed for an amount of ₹ 52.50 crores but which is very much after the statutory period prescribed in the IBC. Therefore, we at this moment not inclined to consider the MA of Chhattisgarh Distilleries Ltd. It is akin to evincing interest to participate in a match after the match/tournament is over. (g) Further the contention of the new resolution applicant is that the time stops once the resolution plan is submitted to the Adjudicating Autho rity for approval is also without any merit, therefore, the same is rejected. 36. The successful resolution applicant shall obtain the required necessary approvals required under any law for the time being in force within a period of one year from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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