9911796707
TMI Blog2021 (9) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... ne in mind that the Resolution Applicant had acknowledged the decision of the CoC in regard to the rejection of the Resolution Plan through an email dated 19.11.2019 and claimed the refund of the Earnest Money Deposit . Further, it cannot be lost sight of that the Resolution Applicant had not furnished the revised Resolution Plan including the suggested changes and instead proposed, more modifications to the commercials and term of the Resolution Plan and later withdrew its interest in any Resolution Plan. Suffice it for this Tribunal to point out that on 19.3.2020 the Resolution Applicant withdrew its interest for pursuing the Resolution Plan, perceiving that the Committee of Creditors had not approved the Resolution Plan till date of withdrawal - In the present case, indisputably, the CIRP period came to an end on 15.11.2019 and because of the direction dated 30.10.2019 issued by the Adjudicating Authority the Resolution Professional had no option but to file an IA. No. 412/2020 praying for a Liquidation Order be passed as per Section 33(1)(a) of the Code. Moreover, liberty was prayed for to withdraw an application seeking extension of CIRP period as grounds were claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case ..the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was admitted on 02.02.2018 and the present application is filed by the Resolution Professional on 25.08.2020. The period of 180 days would be completed on 30.10.2018. The period of 180 days would be completed on 30.10.2018. As per order dated 31.10.2019, RP has been directed to place the revised resolution plan before CoC and further directed to complete the process within 90 days. RP has also filed an application seeking additional time for concluding the CIRP process. However, during the pendency, the Resolution Applicant has withdrawn the resolution plan and the application for extension has been frustrated. Hence, no resolution has been passed by CoC and the present application has been filed under Section 13(1)(a) on 21.08.2020 and the essential ingredients of the same stand satisfied. 11. Appointment of Liquidator Section 34(1) of the Code provides that where the Adjudicating Authority passes an order for liquidation of the corporate debtor under Section 33, the resolution professional appointed for the corporate insolvency resolution process shall, subject to submission of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 33(1)(A) of the Code, the corporate debtor Best Foods Limited is directed to be liquidated in the manner as laid down in Chapter III of the Code. Some of the directions are noted as under:- (i) That as per Section 33(5) of the Code and subject to Section 52 of the Code, no suit or other legal proceedings shall be instituted against the corporate debtor. Provided that a suit or other legal proceedings may be instituted by the liquidator on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority. (ii) That the provisions of sub-section (5) of Section 33 of the Code shall not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator; and (iii) That this order of liquidation under Section 33 of the Code shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor, except when the business of the Corporate Debtor is continued during the liquidation process by the liquidator, and (iv) That all the powers of the Board of Directors, key managerial prescribed and the partners o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution Professional of the Corporate Debtor had constituted the Committee of Creditors (CoC) of the Corporate Debtor after collating and verifying all claims received from the creditors of the Corporate Debtor . Later, an Application was filed by the Committee of Creditors of the Corporate Debtor (under Section 22 of the I B Code). The Interim Resolution Professional was replaced by Mr. Vikram Bajaj, the Respondent as Resolution Professional for the Corporate Debtor as per order dated 17.04.2018 passed by the Adjudicating Authority . 6. The Resolution Professional / Respondent published Form G and invited Expression of Interest (EOI) from the prospective Resolution Applicants by advertising the same in the Newspapers (vide publication dated 05.05.2018). On 01.08.2018, this Tribunal passed an order of extending the CIRP period by another 90 days. Later, the Respondent/ Resolution Professional of the Corporate Debtor issued a fresh invitation calling for Expression of Interest in respect of the Corporate Debtor on 07.08.2019. The Resolution Professional received the Expression of Interest from a prospective Resolution Applicant - Maritime Trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Applicant / MTC, for which, the Resolution Applicant was agreeable . 10. Through email dated 29.10.2018, the Resolution Professional / Respondent had informed the Resolution Applicant / MTC that the Committee of Creditors of the Corporate Debtor was not inclined to consider the Revised Resolution Plan of Maritime Trade Corporation , since the same was not found feasible and further the time period for Corporate Insolvency Resolution Process of the Corporate Debtor was almost over, there was no time left in the Resolution Process of the Corporate Debtor to entertain any further repetition of a process . 11. The stand of the Appellant is that the Resolution Plan of the Resolution Applicant - Maritime Trade Corporation was not put before the Committee of Creditors of the Corporate Debtor although inconsistencies in the Resolution in regard to the non-compliance of the provisions of the Code were also removed and that the Revised Resolution Plan dated 28.10.2018 was found to be in agreement with particular rule(s) by the Resolution Professional / Respondent, as stated by him in the email dated 29.10.2018 to the Committee of Creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal / Respondent preferred an Application in CA No.1077 of 2019 before the Adjudicating Authority praying for an additional time of 75 days for completion of the Corporate Insolvency Resolution Process of the Corporate Debtor and to permit the Committee of Creditors of the Corporate Debtor to abstain from voting viz the State Bank of India to submit their vote on approval of the Resolution Plan on liquidation of the Corporate Debtor as the case may be. 16. The State Bank of India (one of the Financial Creditors of the Corporate Debtor ) with a voting share of 53.87% through email dated 07.02.2020 had informed the Resolution Professional / Respondent that the proposal for approval of the Resolution Plan was approved by the State Bank of India. In this connection it is pertinently pointed out that on 13.02.2020, during the hearing of CA 1077 of 2020 in CP (IB) No.117/Chd/CHD/2017 the Resolution Professional / Respondent while informing the Adjudicating Authority about the approval of the State Bank of India to the Resolution Plan of the Resolution Applicant/ Maritime Trade Corporation prayed for issuance of a direction from the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating Authority had committed an error in directing the Liquidator to take steps as per Regulation 32(A) of the Liquidation Resolutions without directing the Liquidator to take appropriate steps as per Regulation 2B and the judgment of this Tribunal in Y. Sivaram Prasad vs. S. Dhanapal Ors. Vide Co. Appl (AT) (Ins) No.224 of 2018 in which the Liquidator is directed to first call for schemes of compromise and arrangement under Section 230 of the Companies Act, 2013 at the stage of liquidation proceedings of the Corporate Debtor before the sale of Assets of the Corporate Debtor collectively or on a standalone basis in order to keep the Corporate Debtor as a going concern even during the period when the Corporate Debtor is undergoing liquidation proceedings. Appellant s Submissions 22. The Learned Counsel for the Appellant submits that the impugned order dated 01.03.2020 passed by the Adjudicating Authority in I.A No.412 of 2020 in CP (IB) No.117/Chd/CHD/2017 is in negation of the principles of natural justice and the same is legally untenable. 23. The Learned Counsel for the Appellant contends that the Adjudicating Authority had failed to observe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plan . 27. The Learned Counsel for the Appellant projects an argument that the Adjudicating Authority while passing the impugned order in disregard to the facts and circumstances of the instant case had encroached upon the majority decision of the Committee of Creditors , which it does not have the power to, except for the grounds mentioned as per sub-section (a) to (e) of Section 32 of the Code. 28. The Learned Counsel for the Appellant submits that the Adjudicating Authority had failed to observe in the impugned order that the Resolution Professional / Respondent had filed the application for liquidation of the Corporate Debtor without securing the vote and resolution of the Committee of Creditors neither on the revised Plan nor on the Liquidation of the Corporate Debtor , which is in breach of the necessary ingredients of the I B Code and the directions issued by the Adjudicating Authority as per order dated 31.10.2019 in CA No.603/2018. 29. The Learned Counsel for the Appellant brings it to the notice of this Tribunal that the Adjudicating Authority had committed an error in not observing that the action of the Resolution Professional / Respondent perm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Appellant s Citations 32. The Learned Counsel for the Appellant seeks in aid of the judgment of this Tribunal dated 19.03.2019 (1) Mr. Sharad Sanghi vs. Vandana Garg and others (Com. App (AT) (Ins.) 461 of 2018); (2) Ashutosh Koul and Others vs. DBS Bank Limited and others (Com. App (AT) 464 of 2018); and (3) Appollo Jyoti LLC and others vs. Jyoti Structures Ltd. Through its Resolution Professional, M/s Vandana Garg and Others (Com. App. (AT) (Ins) No.548 of 2018) reported in 2019 SCC OnLine NCLAT page 148 (at special page 7 and 8), wherein at paragraph 14 to 19, 23 to 26, it is observed as under: 14. Whether a member who has already opined, after final decision, can change its opinion or not? It is the matter which can be decided by the Committee of Creditors , which may extend the period and allow to have fresh voting. Regulation 26(2) being directory cannot override the power of the Committee of Creditors , which is the final decision making authority in accepting or rejecting a Resolution Plan . The Insolvency and Bankruptcy Board of India also noticed that Regulation 26(2) is not workable and will amount to interference with the power of the Committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the period. Xxx xxx xxx 23. However, the aforesaid submissions cannot be accepted as at the Resolution Process , Financial Creditor claims are decided as per provision of the I B Code . All the Financial Creditors are treated to be similar, if similarly situated. 24. We have noticed that the Adjudicating Authority has made certain observations with regard to the timeline given by the Resolution Applicant . Learned counsel appearing on behalf of the Resolution Applicant submits that the total period of 15 years will be reduced to 12 years. 25. In view of the aforesaid findings and as we have already held that the Resolution Process took place within 270 days and the Committee of Creditors had the jurisdiction to change its opinion in favour of the Resolution Plan to make it a success and Regulation 26(2) being directory which also stands deleted, we set aside the impugned order and hold that the Resolution Plan being in conformity with Section 30(2) warranted approval by the Adjudicating Authority. 26. However, we make it clear that to make the Resolution Process successful, though it is open to the Committee of Creditors to change its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the commercial decision taken by CoC by a thumping majority of 84.36%. 158. It is further to be noted, that after the resolution plan of Kalpraj was approved by NCLT on 28.11.2019, Kalpraj had begun implementing the resolution plan. NCLAT had heard the appeals on 27.2.2020 and reserved the same for orders. It is not in dispute, that there was no stay granted by NCLAT, while reserving the matters for orders. After a gap of five months and eight days, NCLAT passed the final order on 5.8.2020. It could thus be seen, that for a long period, there was no restraint on implementation of the resolution plan of Kalpraj, which was duly approved by NCLT. It is the case of Kalpraj, RP, CoC and Deutsche Bank, that during the said period, various steps have been taken by Kalpraj by spending a huge amount for implementation of the plan. No doubt, this is sought to be disputed by KIAL. However, we do not find it necessary to go into that aspect of the matter in light of our conclusion, that NCLAT acted in excess of jurisdiction in interfering with the conscious commercial decision of CoC. 159. It is also pointed out, that in pursuance of the order dated 5.8.2020 passed by NCLAT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutorily-enabled room for commercial negotiation is not enough to over-power the other elements of regulation that detract from the view that 88 (3) The committee shall evaluate the resolution plans received under sub-regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit: Provided that the committee shall record its deliberations on the feasibility and viability of the resolution plans PART H 112 CoC-approved Resolution Plans are contracts. CoC-approved Resolution Plans, before the approval of the Adjudicating Authority under Section 31, are a function and product of the IBC s mechanisms. Their validity, nature, legal force and content is regulated by the procedure laid down under the IBC, and not the Contract Act. The voting by the CoC also occurs only after the RP has verified the contents of the Resolution Plan and confirmed that it meets the conditions of the IBC and the regulations therein. The amended Regulation 39(3)89 further regulates the conduct of the CoC on voting on Resolution Plans and has introduced the requirement of simultaneous voting. The IBBI s Discussion Paper iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act, the principles of unjust enrichment would have been sufficient to address the issue and an amendment may not be considered necessary. A Resolution Applicant, as a third party partaking in the insolvency regime, seeks to acquire the business of the Corporate Debtor without the entirety of its debts, statutory liabilities and avoiding certain transactions with third parties. These benefits are a function of the coercive mechanisms of the IBC which enable a third party to acquire the assets of a Corporate Debtor without its liabilities, for a negotiated amount of the debt that is owed by the Corporate Debtor. Typically, resolution amounts envisage payment of a fraction of debt that is owed to the creditors and the business is acquired as a going concern with its employees. The Resolution Plan is drafted in a way that it is implementable in the future and brings about a quietus to the CIRP. Enabling Resolution Applicants to seek remedies that are not specified by the IBC, by seeking recourse to the Contract Act would be antithetical to the IBC s insolvency regime. The elements of contractual interpretation can be relied upon to construe the language of the terms of the Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual principles and common law remedies, which do not find a tether in the wording or the intent of the IBC, cannot be imported in the intervening period between the acceptance of the CoC and the approval by the Adjudicating Authority. Principles of contractual construction and interpretation may serve as interpretive aids, in the event of ambiguity over the terms of a Resolution Plan. However, remedies that are specific to the Contract Act cannot be applied, de hors the over-riding principles of the IBC. I Statutory framework governing the CIRP 147. The decision in Essar Steel (supra) while reiterating the rationale of the IBC for ensuring timely resolution of stressed assets as a key factor, had to defer to the principles of actus curiae neminem gravabit, i.e., no person should suffer because of the fault of the court or the delay in the procedure. In spite of this Court s precedents which otherwise strike down provisions which interfere with a litigant s fundamental right to non-arbitrary treatment under Article 14 by mandatory conclusion of proceedings without providing for any exceptions, this Court refused to strike down the second proviso to Section 12(3) in its entirety ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time can be extended, the general rule being that 330 days is the outer limit within which resolution of the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation. 159. The CoC has been given wide powers under the IBC. It can direct the Corporate Debtor into liquidation any time before the approval by the Adjudicating PART I 126 Authority, under Section 33(2) of the IBC. Further, under Section 12A of the IBC the Adjudicating Authority may allow withdrawal of the application submitted under Sections 7, 9 or 10 of the IBC for initiation of the CIRP (i.e., initiation of the CIRP by the financial creditor, operational creditor and the corporate applicant, respectively) if the withdrawal is approved by ninety per cent of the voting share of the CoC. Dealing with the question whether a successful Resolution Applicant can retreat through the route provided under Section 12A of the IBC, a threejudge Bench of this Court in Maharashtra Seamless v. Padmanabhan Venkatesh94 observed that, [t]he exit route prescribed in Section 12A is not applicable to a Resolution Applicant. The procedure envisaged in the said provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and 10 of the IBC for defaults arising for six months from 25 March 2020 (extendable by one year). This was followed by an amendment through the IBC (Second Amendment) Act 2020 on 23 September 2020 which provided for a carve-out for the purpose of defaults arising during the suspended period. The delays on account of the lockdown were also mitigated by the IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations 2020, which inserted Regulation 40C on 20 April 2020, with effect from 29 March 2020, and excluded such delays for the purposes of adherence to the otherwise strict timeline. Recently, the IBC (Amendment) Ordinance 2021 was promulgated with effect from 04 April 2021 providing certain directions to preserve businesses of MSMEs and a fast-track insolvency process. There has been a clamor on behalf of successful Resolution Applicants who no longer wish to abide by the terms of their submitted Resolution Plans that are pending approval under Section 31, on account of the economic slowdown that impacted every business in the country. However, no legislative relief for enabling withdrawals or renegotiations has been provided, in the last eighteen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g implementation, where the proceedings remain open. of the UNCITRAL Guide, supra note 56 109 Ibid. 110 IV. A. 66, page 230 of the UNCITRAL Guide, supra note 56 111 Recommendation 156: The insolvency law should establish the mechanism for approval of amendments to a plan that has been approved by creditors. That mechanism should require notice to be given to the creditors and other parties affected by the proposed modification; specify the party required to give notice; require the approval of creditors and other parties affected by the modification; and require the rules for confirmation (where confirmation is required) to be satisfied. The insolvency law should also specify the consequences of failure to secure approval of proposed amendments. , UNCITRAL Guide, supra note 56 112 3.3.1, supra note 55 PART J 145 Resolution Plan at that stage. At the same time, the Corporate Debtor and the CoC have been empowered to withdraw from the CIRP. If it intended to permit parties to amend the Resolution Plan after submission to the Adjudicating Authority, based on its specific terms of the Resolution Plan, it would have adopted the critical safeguards highlighted by the UNCITRAL. 175 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dify, the Plan after acceptance by the CoC. Regulation 36B(4A) requires the furnishing of a performance security which will be forfeited if a Resolution Applicant fails to implement the Plan. This is collected before the Adjudicating Authority approves the Plan. Notably, the regulations also direct forfeiture of the performance security in case the Resolution Applicant contributes to the failure of implementation , which could potentially include any attempts at withdrawal of the Plan. 177. The binding nature, as between the CoC and the successful Resolution Applicant, of the Resolution Plan submitted for approval by the Adjudicating Authority is further evidenced from the fact that the CoC issues a LOI to a successful Resolution Applicant stating that it has been selected as the successful Resolution Applicant and its Plan would be submitted to the Adjudicating Authority for its approval. The successful Resolution Applicant is typically required to accept the LOI unconditionally and submit a PBG. Sequentially, the issuance of an LOI is followed by its unconditional acceptance by the successful Resolution Applicant. In Amtek Auto (supra), this court thwarted a similar attempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirm or deny the legal validity of the Resolution Plan in terms of Section 30 (2) of the IBC. If the requirements of Section 30(2) are satisfied, the Adjudicating Authority shall confirm the Plan approved by the CoC under Section 31(1) of the IBC. 179. If the appellants claim were to succeed, a clause enabling a Resolution Applicant to withdraw/seek modification for reasons such as a Material Adverse Event could also be set up by a Resolution Applicant when it is being prosecuted under Section 74 (3). It was contended before us that Form H, which is a compliance certificate that is to be submitted by the RP to the Adjudicating Authority along with the Resolution Plan, mentions that the RP can enter details as to whether the Resolution Plan is subject to any conditionalities under Clause 12. Thus, the argument goes that this permits the Resolution Applicant to stipulate in the Resolution Plan certain contingencies under which it can withdraw the Plan, for instance if there is an occurrence of an Material Adverse Event . A form is subservient to the statute. The conditionalities contemplated in Form H could be those which do not strike at the root of the IBC. They can in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant is misrepresenting that the Committee of Creditors had approved a Resolution Plan and in fact, no Resolution Plan was approved by the Committee of Creditors within the Corporate Insolvency Resolution period which came to an end on 15.11.2019. Apart from this, I.A. No. 1077/2019 for an extension of CIRP period was Sub-Judice when Sole Resolution Applicant withdrew his Resolution Plan . Moreover, the Learned Counsel for the Respondent brings it to the notice of this Tribunal that the Adjudicating Authority had noted that in view of the withdrawal of the Resolution Plan by the Sole Resolution Applicant the grounds on which CA No.1077/2019 claiming extension of time for completion of CIRP process was filed by the Resolution Professional were frustrated. 36. The Learned Counsel for the Respondent points out that since the CIRP period had lapsed on 15.11.2019 and no Resolution Plan was approved by 15.11.2019, thus the grounds for Sub-Judice application for extension were frustrated and the Adjudicating Authority passed the impugned order of Liquidation of the Corporate Debtor . From the date of CIRP commencement and the date of impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt date. Also, it mandates that a CIRP which was pending and not completed with the aforesaid period of 330 days, as on the date of commencement of the Amendment Act i.e. 16.8.2019, shall be completed within a period of 90 days from such date, i.e. by 15.11.2019. 42. The Learned Counsel for the Respondent submits that Corporate Insolvency Resolution Process (CIRP) period expired on 15.11.2019 and that the Resolution Professional could not convene a Committee of Creditors Meeting (CoC) meeting and thereafter the CoC had become Functous Officio (vide Judgement in Sanjay Kumar Ruia V. Catholic Syrian Bank Anr. (Comp. App. (AT)(Ins.) 560/2018 Paragraph 17 and the judgement in ICICI Bank V. Venkataranarao Nagarajan (Vide Comp. App. (AT)(Ins.) 772/2018). 43. The Learned Counsel for the Respondent contends that the discussion on Resolution Plan between the State Bank of India and the Resolution Applicant after expiry of CIRP period was not through the Committee of Creditors as the CoC was Functuous Officio , but based on a Bilateral Engagement between the Resolution Applicant and the State Bank of India facilitated to build consensus in interests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval of the Committee of Creditors and making applications u/s 30(6) of the I B Code , 2016 for approval of the Adjudicating Authority . 47. The Learned Counsel for the Respondent points out that the Resolution Applicant is not mentioned as a proper and necessary party in the Appeal , while the Appeal is founded on the argument on the plea that the Resolution Applicant could not have withdrawn the Resolution Plan even after the lapse of CIRP period on 15.11.2019 because of the SBI e.mail dated 7.2.2020. As such, it is the stand of the Respondent that the instant Appeal is not maintainable because of Non-joinder of Parties in so far as pleadings pertain to withdrawal of Resolution Plan by the Resolution Applicant after the expiry of CIRP period as incidental and resultant directions saddling the Resolution Applicant with Resolution Plan cannot be issued without hearing the Applicant. 48. The Learned Counsel for the Respondent contends that the Resolution Plan was not binding on the Resolution Applicant after 15.11.2019 in view of the rejection by the Committee of Creditors (CoC) in the meeting dated 15.11.2019 and the CIRP period came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough Authorised Signatory V. Satish Kumar Gupta Ors. reported in 2020 8 SCC 531 wherein it is observed and held that while leaving the provision otherwise intact, the term Mandatorily is struck down as being manifestly arbitrarily under Article 14 of the Constitution of India and as being unreasonable restriction on the Litigant s right to carry on business under Article 19(1)(g) of the Constitution and contends that the effect of this declaration is that ordinarily the time taken in relation to CIRP must be completed within the outer limit of 330 days from the Insolvency commencement date including extensions and the time taken in legal proceedings. If the delay or large part thereof is attributable to the process of Adjudicating Authority and/or the NCLAT itself, it may be open in such cases for the Adjudicating Authority and / or NCLAT to extend the time beyond 330 days. It is only in exceptional cases that time can be extended, the general Rule being that 330 days is the outer limit within which the Resolution of the Stressed Assets of the Corporate Debtor must take place beyond which it is to be driven into Liquidation . But in the present case, in the absenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2944 of 2020 dated 10.03.2021). Appraisal 57. It transpires that M/s. Hajura Singh Bhim Singh had filed an application for petition as per Section 9 of the I B Code to initiate CIRP against M/s. Best Foods Ltd. (Corporate Debtor), which came to be admitted on 02.02.2018 and an Interim Resolution Professional Mr. Atul Kumar Kansal was appointed and later on 17.04.2008 through an order the said Interim Resolution Professional was changed and one Mr. Vikram Bajaj came to be appointed as Resolution Professional . 58. In fact, the Resolution Professional of the Corporate Debtor (M/s. Best Foods Ltd.) projected an Interlocutory Application No. 412/2020(as per Section 33(1)(a) of the I B Code praying for passing an order of Liquidation in the matter of M/s Best Foods Ltd. ( Corporate Debtor ). 59. It is the plea of the Appellant that the Adjudicating Authority while passing the impugned order on 01.03.2021 passed by the Adjudicating Authority initiating liquidation of the Corporate Debtor (M/s Best Foods Ltd.) based on the I.A. 412/2020 filed by the formal Resolution Professional (under Section 33(1)(a) of the I B Code) now appointed as Liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Plan of the Resolution Applicant considering the viability and feasibility of the Resolution Plan. Therefore, it is a forceful stand of the Appellant that if a Resolution Plan was approved by the majority of the Committee of Creditors at a particular point of time, the same is not to be allowed to be withdrawn by the Resolution Applicant. 64. The other prime stand of the Appellant is that the Respondent / Liquidator filed IA 412/2020 before the Adjudicating Authority praying for the liquidation of Corporate Debtor without securing the vote and resolution of the Committee of Creditors. 65. It is the version of the Appellant that the Resolution Professional had permitted the Resolution Applicant to withdraw the Resolution Plan which had led to a substantial waste of CIRP time period from 04.10.2019 when the Resolution Plan was submitted by the Resolution Applicant for the first time till 19.03.2020 when the Resolution Applicant withdrew the Resolution Plan subsequent to the approval of the Committee of Creditors . 66. It is represented on behalf of the Appellant that the Adjudicating Authority had erred in allowing the Resolution Applicant to withdraw from the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I B Code provides for the manner in which the Resolution Plan may be furnished by a Resolution Applicant . A Resolution Applicant may submit a Resolution Plan to the Resolution Professional who is to scrutinise the same with a view to find out that it fulfils of Section 30(2) of the Code. When the plan in issue, endorses the requirements as per Code, then it is to be projected before the Committee of Creditors for its approval, in terms of the ingredients of Section 30(3) of the Code. Further, this can be approved by the Committee of Creditors by a vote of not less than 66%(75% w.e.f 6.6.2018) as per Section 30(4) of the Code. Application of Judicial Mind 73. It is relevantly pointed out that if a Resolution Plan is approved by the Committee of Creditors , the same is to be filed before the Adjudicating Authority as per Section 31 of the Code and that the Adjudicating Authority in such a situation is to take a decision after going through the Plan that it satisfies or does not satisfies the requirements mentioned in Section 30 and may either give a nod or reject the same as the case may be, in the teeth of the decision of Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take appropriate decision either for approving the Resolution Plan or for reiterating its earlier decision for liquidation of the Corporate Debtor etc. Also, it was ordered by the Adjudicating Authority that the entire exercise including filing of an application u/s 31 or conveying the decision of the CoC to reiterate initiation of liquidation process of the Corporate Debtor, as the case may be shall be completed within a period of 90 days from the commencement of the Insolvency and Bankruptcy Code (Amendment Act, 2019) as provided for in the third proviso to Section 12(3) of the Code. 78. In the present case, it cannot be brushed aside that the Committee of Creditors had rejected the Resolution Plan in the meeting that took place on 15.11.2019. Moreover, the Corporate Insolvency Resolution Process came to an end on 15.11.2019, which date 651 days rolled by from the commencement date of insolvency on 02.02.2018. 79. As a matter of fact, the Resolution Applicant, on 19.11.2019 had acknowledged the rejection of its Resolution Plan by the Committee of Creditors and had prayed for the refund of Earnest Money Deposit and subsequently had requested for a deliberation / disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Resolution Applicant and not through the Committee of Creditors in and by which no accord/agreement was arrived at because of the fact the Resolution Applicant had not submitted the Resolution Plan incorporating the changes advised by the State Bank of India and had not accepted the terms for performance guarantee. 85. From the Respondent s point of view, a stand is taken that the Committee of Creditors never approved the Resolution Plan , and hence there was no occasion for the issuance of Letter of Intent to the Resolution Applicant / Deposit of performance security / acceptance of Letter of Intent by the Resolution Applicant and for preferring an application u/s 30(6) of the Code. 86. In the present case, it is to be borne in mind that the Resolution Applicant had acknowledged the decision of the CoC in regard to the rejection of the Resolution Plan through an email dated 19.11.2019 and claimed the refund of the Earnest Money Deposit . Further, it cannot be lost sight of that the Resolution Applicant had not furnished the revised Resolution Plan including the suggested changes and instead proposed, more modifications to the commercials and term of the Resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
