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TMI Blog2021 (11) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Professional regarding Resolution Plan of Kals Distilleries Private Limited which protest was immediately replied by Resolution Professional on 12.04.2019 informing that the plan has been accepted by the order dated 04.04.2019 of the Adjudicating Authority. The Hon ble Supreme Court in K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS [ 2019 (2) TMI 1043 - SUPREME COURT] had occasion to consider the relevant provisions of the I B Code , including the provisions of Section 30. With regard to commercial wisdom of the Financial Creditor, the Hon ble Supreme Court laid down that there is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wal, RP for R-1. Mr. Arun Kathpalia, Sr. Advocate with Mr. Ankit Popli, Advocate for R-2. JUDGMENT Ashok Bhushan, J. 1. These two Appeals have been filed by same Appellant challenging different orders passed by the Adjudicating Authority (National Company Law Tribunal), Jaipur Bench, Jaipur. Both the Appeals have been heard together. 2. Company Appeal (AT) (Ins.) No. 910 of 2021 has been filed challenging the order dated 16.07.2021 passed by the Adjudicating Authority rejecting the I.A. No. 201/JPR/2019 filed in CP (IB) No. 86(ND)/2017 (T.A. No. 83(ND)/ 2018). The Appellant s Resolution Plan was rejected by the Committee of Creditors (hereinafter referred to as CoC ) in its meeting dated 04.06.2019. By I.A. the said decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een correctly adverted to and decided by the Adjudicating Authority. It is submitted that the only observation made by the Adjudicating Authority with regard to allegations of collusion and fraud in Paragraph 16 of the order is that even after deducting the 22.4% voting share of the 5th Respondent- Mahalaxmi Traders , the Resolution Plan of the Appellant could have been rejected by 77.76%, therefore, the said contention of the Appellant need not to be considered at all. It is further submitted that the Resolution Plan of Kals Distilleries Private Limited which has been approved by the CoC in the same meeting was also approved by the Adjudicating Authority by allowing the Application filed by the Successful Resolution Applicant . The Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving the rejection of the Resolution Plan of the Appellant as well as the order approving the Resolution Plan of the Successful Resolution Applicant. It is submitted that the commercial wisdom of Financial Creditors in rejection of a Resolution Plan is not challengeable. 8. We have considered the submissions of the Learned Counsel for the parties and perused the record. 9. The Resolution Plan of the Appellant got rejected by 100% vote in the 19th meeting of the CoC dated 04.06.2019 on which date the Resolution Plan of the Successful Resolution Applicant was approved with 100% votes. The commercial wisdom of the Financial Creditors which has support of 100% votes has to give due weight by Adjudicating Authority as well as this Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In paragraph 52 of the Judgment, following was laid down:- 52. As aforesaid, upon receipt of a rejected resolution plan the adjudicating authority (NCLT) is not expected to do anything more; but is obligated to initiate liquidation process under Section 33(1) of the I B Code. The legislature has not endowed the adjudicating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the commercial decision of CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors. From the legislative history and the background in which the I B Code has been enacted, it is noticed that a completely new approach has been adopted for speeding up the recovery of the debt d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th. The submission of the Learned Counsel for the Appellant is that there is collusion and fraud between M/s. Mahalaxmi Traders and the Successful Resolution Applicant . Admittedly, M/s. Mahalaxmi Traders was one of the CoC s member holding a voting share of 22.4%. There can be no doubt that any fraud in process may vitiate the entire process but it is easy to allege fraud and collusion but difficult to prove the same. Apart from the bald allegation of the Appellant that M/s. Mahalaxmi Traders colluded with the Successful Resolution Applicant , there is no other material to come to a finding that actually any fraud was played. The commercial wisdom of the Financial Creditors cannot be disregarded on bald allegation of fraud and coll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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