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TMI Blog2021 (8) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... sed and decisions taken by the Committee of Creditors by majority, the same are not open for deliberations specially in the context where the Appellant has voted in favour of the Resolution Plan in the group to which the Appellant belonged. It appears that the Company Appeal in MOONS TECHNOLOGIES LIMITED VERSUS THE ADMINISTRATOR DEWAN HOUSING FINANCE CORPORATION LTD. AND ORS. [ 2021 (7) TMI 435 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH] is heavily based on the observations in the matter of M/s. Venus Recruiters Pvt. Ltd. . At this preliminary stage, it will not appropriate for us to make detail observations as it may be treated as a finding in the Appeals The rival claims, which are more questions of law would require deliberation and decision at appropriate stage. If the averments made by Appellant are juxtaposed with averments made by Respondents, we do not find it a fit case to pass interim orders as sought. We do not think that any interim order as sought with regard to Resolution Plan approved needs to be passed. Application disposed off. - I.A. No. 1170 of 2021 IN Company Appeal (AT) (Insolvency) No. 454 of 2021 I.A No. 1173 of 2021 IN Company Appeal (AT) (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal (AT) (Insolvency) No. 455 of 2021 has been filed against impugned order passed in IA No. 449/MB/C-II/2021 in CP(IB) No. 4258/MB/C-II/2019 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court-II) vide which the Interlocutory Application of the Administrator under Section 30(6) and Section 31 of the IBC was approved and the Resolution Plan of Respondent No.2- Piramal Capital Housing Finance Limited was accepted by the Adjudicating Authority. 3. In these Appeals I.A Nos. 1170 and 1173 of 2021 respectively have been filed for stay of the respective impugned orders. 4. When these matters came up, we had requested Counsel for both sides that the Appeals are at the stage of admission and question to be dealt with at this stage is limited to the question whether the interim relief as sought in the Appeals should be granted. Counsel for both sides, however, have made various submissions which are more with regard to the merits of the Appeals themselves to be decided. We will make brief reference to the submissions. 5. The Learned Counsel for the Appellant referring to the impugned order in Company Appeal (AT) (Insolvency) No. 454 of 2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract and the considerations have to be lawful. The stipulation in the Resolution Plan approved will deprive the persons who were defrauded by fraudulent transactions for which the avoidance applications have been filed. If such benefit is not given to the persons defrauded, it would be against the public policy. It is argued that ascribing a value of ₹ 1 to the future recoveries (involving amounts in excess of ₹ 45,000 Crores) is not adequately factoring in the Resolution Plan amount. It is argued that ascribing of such value of ₹ 1 to the future recoveries has not take into consideration the aspect of value maximisation of the assets of DHFL. 8. Learned Senior Counsel for the Appellant vehemently submitted that the impugned order (in Company Appeal (AT) (Insolvency) No. 454 of 2021) is an unreasoned and non-speaking and thus deserves to be stayed. The Resolution Plan was in contravention of provisions of law and thus deserves to be stayed. The Adjudicating Authority, while deciding the Application, wrongly relied on the case of Interups Inc. vs. Kuldeep Kumar Bassi Ors. [Company Appeal (AT) (Insolvency) No. 1079 of 2020] of this Tribunal which was not cite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution Plan (RFRP), and the clause in question, was formulated with the consent of the Appellant which formed a part of the class of NCD holders which voted to amend the RFRP further to the 7th meeting of the Committee of Creditors. As per deliberations and decisions in the Committee of Creditors, the Resolution Plan ascribing a value of ₹ 1 to the recoveries was accepted. The Resolution Plan was in compliance of RFRP. The Committee of Creditors even had right to accept and approve a departure from the RFRP and that it would be a commercial decision. It is stated that the Appellant had not pointed out anything which is illegal and contrary to the Resolution Plan. It is submitted that the whole claim of the Appellant hinges on judgment in the matter of M/s. Venus Recruiters Pvt. Ltd. (Supra). The argument is that the decision in the matter of M/s. Venus Recruiters Pvt. Ltd. did not deal with the issue of entitlement to recoveries of avoidance applications, in the event the Resolution Plan provides for a mechanism to deal with the same. In the matter of M/s. Venus Recruiters Pvt. Ltd. neither the RFRP nor the Resolution Plan provided for treatment of proceeds arising fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lications under Sections 43-50 will be for the benefit of the Committee of Creditors. It is stated by the Learned Senior Counsel for the Respondent No.2 that the Adjudicating Authority, therefore, rightly refused to interfere with the commercial decision. It has been argued that it is not possible to ascribe value to the future contingent recoveries that may arise from avoidance applications under Section 66 given the uncertain nature of such proceedings and it s protracting nature and it may very well be possible that the recoveries against such applications may be zero. It is also argued that two independent valuers appointed by the Administrator in discharge if its duties under the I B Code ascribed NIL Value to avoidance applications. The ascribing of INR 1 to the avoidance transactions must be looked at with the other parts of the Resolution Plan in a holistic manner and the same cannot be looked at in isolation and dehors the consideration/ value that the Resolution Plan contemplates. Learned Senior Counsel submitted that the Resolution Plan contemplates a sum of INR 37,250 Crores comprising a combination of cash and non-cash considerations including an upfront cash payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same would go to the Resolution Applicant/ future Corporate Debtor. 3. COC is comprised of 77 Financial Creditors and deliberations they have protected their interest and ascribed the value based on their Commercial Wisdom and Adjudicating Authority has limited jurisdiction to interfere with the same as per various judgments quoted in the detailed order passed in IA 449/2021 (Approving the Resolution Plan). During the course of various hearings Learned Senior Counsels appearing for the Administrator, COC, Successful Resolution Applicant submitted that after hard bargain, various rounds of negotiations the plan amount was increased substantially by the Successful Resolution Applicant finally to ₹ 37,250 Crores. Respondents also submitted that 63 Moons Technologies Limited, the applicant also voted in favour of the Resolution Plan and it cannot agitate the same now when 94.5% of COC members approved the plan. The COC by exercising its Commercial Wisdom have accepted, approved the resolution plan including the monies to be recovered if any from the Fraudulent Transactions. Therefore, we as Adjudicating Authority reluctant to substitute our wisdom at this stage as against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he words used by the Adjudicating Authority wherein it was held that the judgment in the matter of M/s. Venus Recruiters Pvt. Ltd. is misplaced . 17. The Learned Counsel for the Appellant referred to various paragraphs in the matter of M/s. Venus Recruiters Pvt. Ltd. to emphasize on the submissions that the Hon ble High Court of Delhi has held that the benefits of the preferential transactions are for the creditors of the Corporate Debtor and not for the Resolution Applicant who steps into the shoes of the Corporate Debtor in its new Avatar. Para 70 of the Judgment reads as under:- 70. An avoidance application for any preferential transaction is meant to give some benefit to the creditors of the Corporate Debtor. The benefit is not meant for the Corporate Debtor in its new avatar, after the approval of the Resolution Plan. This is clear from a perusal of Section 44 of the IBC, which sets out the kind of orders which can be passed by the NCLT in case of preferential transactions. The benefit of these orders would be for the Corporate Debtor, prior to approval of the Resolution Plan. Any property transferred or sum acquired in an order passed in respect of a preferent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Former RP on 14th August, 2018. Notice was issued in the avoidance application to the non-applicants. The Petitioner was thereafter impleaded and notice was issued to it on 25th October, 2018, upon an application by the RP. The said order, impleading the Petitioner, is challenged before this Court, on the ground that the entire proceedings are without jurisdiction. 19. Thus what appears is that in matter of M/s. Venus Recruiters Pvt. Ltd. (Supra) Committee of Creditors had no occasion to deal with transaction which was later filed as Application under Sections 25(2) (j), 43 to 51 and 66 of the I B Code . It is in the above context that the Learned Counsel for the Respondents are submitting that the context in which judgment of M/s. Venus Recruiters Pvt. Ltd. was passed was different and in that matter Committee of Creditors had not dealt with question as to how the benefits from the avoidance applications are to be treated. Per contra, in the present matter, the learned Counsel for the Respondents are submitting that here there were detailed deliberations on how to deal with the avoidance application under Section 66 of the I B Code and once it has been thoroughly disc ..... 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