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TMI Blog2022 (2) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... f Creditors - reliance can be placed in the case of K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS [ 2019 (2) TMI 1043 - SUPREME COURT ]. It is also satisfying that the Resolution Plan is in accordance with sections 30 and 31 of IBC, 2016. Thus, the Resolution Plan is hereby approved and is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under section 14 of IBC, 2016 shall not have any effect henceforth. In case of non-compliance of this order or withdrawal of Resolution Plan, the performance guarantee amount already paid by the Resolution Applicant shall stand forfeited, in addition to the Resolution Applicant being liable for any other action as per law. Application allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... filed his claim for a sum of Rs.11,80,628/- in respect of the Corporate Debtor. The same will be dealt with later in the order. 2.6. Inv.14/IB/CHE/2021 filed by the Applicant namely Gazala claims to be an Operational Creditor who has duly filed his claim for a sum of Rs.31,44,117/- and has raised several objections to the Resolution Plan. The same will be dealt with later in the order. Apart from the above, there are certain objections being filed directly in the Resolution Plan in IA/460/IB/CHE/2021. 3. BRIEF FACTS OF CIRP 3.1. In the application filed by one of the Operational Creditor viz. Sarangs Heavy Lift India Private Limited under Section 9 of IBC, 2016, this Tribunal vide its order dated 09.12.2019 initiated the Corporate Insolvency and Resolution Process (CIRP) as Against the Corporate Debtor and appointed the Applicant herein, as Interim Resolution Professional (IRP). 3.2. Pursuant thereto, the Applicant has caused public announcement in Form A as per Regulations 12 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 in two newspapers, one in English ("Times of India") and another in Tamil ("The Hindu") on 15.12.2019 and also in " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st (EOI) for inviting the prospective Resolution Applicant to submit the Resolution Plan in respect of the Corporate Debtor and the said Form-G was also published in "Business Standard" (English) and "Dina Mani" (Tamil) on 12.03.2021. However, after the issuance of Form G, it is seen that the nationwide lock down was imposed on account of Covid-19 pandemic and hence the PRAs' requested for the further time to submit the Expression of Interest and accordingly the CoC has approved the last date for submission of Expression of Interest upto 30.04.2020. Thereafter, it is seen that on 06.05.2020, the Applicant has extended the last date for the submission of Form-G upto 15.06.2020. 3.7. It is seen that due to the pandemic, the 3'4 meeting of the CoC was conducted through Video Conferencing on 18.06.2020 and the 4° CoC meeting was scheduled on 24.06.2020. However, it is seen that due to certain connectivity issues, the 4 CoC meeting could not be continued and hence it was adjourned on 25.06.2020. In the 4". CoC meeting, it is seen that the Applicant has discussed about the difficulty faced by him in operating the factory during the pandemic and also there is no business op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CoC meeting withdrew their participation in the bidding process in view of the RBI notification passed on the Asset Reconstruction company during the CIRP. 3.11. It was submitted that the CoC members have expressed that there should be a substantial improvement in the offer of the Resolution Plan submitted by the prospective Resolution Applicant since the proposed amount is very low and accordingly the Core Committee after several negotiations with the prospective Resolution Applicants has requested them to submit the revised Resolution Plan to the Applicant. 3.12. In the meantime, the 180 day of CIRP in respect of the Corporate Debtor came to an end and accordingly the RP has moved an application IA/30/2021 seeking extension of CIRP and this Tribunal vide its order dated 20.04.2021 after excluding the period from 25.03.2020 to 31.10.2020 extended the CIRP for a period of 90 days. 3.13. The 10% CoC meeting was held on 05.02.2021, wherein a detailed discussion about the modification of the Resolution Plan with the prospective Resolution Applicants was discussed and the prospective Resolution Applicants were directed to submit the revised Resolution Plan before the CoC on or be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g amount shall be payable within 60 days of 15 Tranche (or Transfer date) * The resolution applicant proposes to pay 12.25% to the financial creditors on the admitted amount to the secured financial creditors and 100% to EPFO, 100% to the Workmen, 0.39% to Operational Creditors. The Resolution Applicant proposes to pay 12.25% to the financial creditors on the admitted amount to the secured financial creditors. Further to that the summary of the Resolution Plan proposed in the Resolution Applicant as follows: TRANCHE OF PAYMENT DATE OF PAYMENT AMOUNT (Rs. IN LAKHS) 10% of Resolution Plan amount as Performance Guarantee 7 days from the date of approval of CoC 16,75,06,600/- I Tranche - 38.80% of The amount Resolution Plan 30 days from the date of approval by AA 65,00,00,000/- II Tranche & Final Tranche-61.20% of the Resolution Plan amount Balance 60 days from the date of approval by AA 102,50,66,000/- 5. OBJECTIONS TO THE RESOLUTION PLAN The objections to the resolution plan can be categorized in the following manner; (i) Objections raised by RP of RISPL. (ii) Objections raised by customers of RISPL (iii) Objections raised by other Operational Creditors and Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Vensys Energy AG, Saarbruecken (Germany). 5.1.5 That the business of both Holding Company RPPL and Subsidiary Company RISPL are intertwined and inter-connected. In view of the commencement of CIRP against both the Holding Company RPPL and Subsidiary Company RISPL, the Customers of both Companies have filed various Applications before this Hon'ble Tribunal, seeking to address their grievances in relation to service of WEGs manufactured by RPPL and in some cases, operated and maintained by RISPL. 5.1.6 That after assuming charge, this Applicant found that both RPPL and RISPL have their Registered Office at the same address and that most of the records of RISPL were not available in the Registered Office. Inspite of numerous requests and repeated reminders to the Ex-Directors, they were not willing to come forward to provide the records and cooperate with this Applicant. Therefore, the Applicant was constrained to file TA/1040/2020 under Sec.19(2) of IBC,2016. 5.1.7 That the Applicant had also sought for information from the Respondent herein, the Resolution Professional of RPPL, in relation to the Know-how License and Technical Assistance Agreements entered with Vensys Ener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements dated from 2007 to 2015 for different models of WEGs with Power Variants, entered with Vensys Energy AG, Saarbruecken (Germany). Therefore, the Standalone Resolution Plan of PRA seeks to snatch the right of RISPL to carry on its O & M business and other incidental and ancillary services. The entire business of RISPL depends on WEGs manufactured by RPPL. 5.1.13. That the Resolution Plan is prejudicial to public interest. The Customers of RPPL and RISPL are public Third Parties, who have availed the Generators from RPPL. Most of the Customers have purchased the WEGs by Bank loans to fund the purchase. The Customers of both Companies have entered into Agreements with both RPPL and RISPL for replacement, service, operation and maintenance. In the event of default by RPPL, RISPL is required to honour the same and vice versa. In the event RISPL is unable to service the customers, the RPPL undertook to carry out the service of Generators. The failure of RPPL to service RISPL customers has resulted in liquidated damages being slapped on RISPL. The failure of expected Wind Power Generation from the WEGs manufactured by RPPL, also entitles the WEG Customers to slap damages against R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the assets rather than increasing the value of assets in the interest of all Stakeholders which is against the spirit of the Code. 5.2. OBJECTIONS RAISED BY CUSTOMERS OF RPPL 5.2.1 The Applicants claim to be one of the 293 Operational Creditors in respect of the Corporate Debtor, who had duly filed a Claim with the RP of RPPL and the said Claim had been duly admitted in full and is reflecting in the Operational Creditors Claim. 5.2.2 That as an Operational Creditor, reference was made to Sec.24(3) of the Insolvency and Bankruptcy Code 2016, which provides that a Notice of each Meeting of the Committee of Creditors be given' by the' Resolution Professional to Operational Creditors or their representatives if the amount of their aggregate dues is not less than 10% of the Debt. In the matter of Rajputana Properties (.P) Ltd., vs. Ultra Tech Cement Ltd., and Others (1.A.No.594 of 2018 in Company Appeal (AT) Insolvency No.188 of 2018), the Hon'ble National Company Law Appellate Tribunal, New Delhi has recorded in its Order dated 15.05.2018 the following observations, that insists on transparency and to value the opinion of persons without voting rights including that of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear from the minutes of the CoC that the Corporate Debtor is earning profit of Rs.3 to 4 Crore every month and this is expected to continue in the future too and as such this Resolution Plan is prejudicial to the interest of the Operational Creditor like the Applicant. 5.2.8 It was submitted that there is a severe violation is noted in the Resolution Plan in relation to the Workmen Retrenchment Process, by directing payments out of the funds generated by the Corporate Debtor during the CIRP. It was submitted that the RP in its 10th CoC meeting suggested for payment of Compensation / Settlement instead of going through legal process by obtaining the permission of Joint Commissioner of Labour for such Retrenchment of Employees. The question which is raised by the Applicant is that whether the Retrenchment cost should form part of the Resolution Plan amount or that the same should be taken out of the Cash Accruals or any other Revenue of the Company during the CIRP. In the present case, it was submitted that the Retrenchment cost to be spent from the earnings during CIRP is a Preferential Treatment by way of allocating fund to certain class of creditors, which is against the spirit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution Plan under the guise of streamlining its operations is severing all its contractual obligations: and guarantees which are effectively its primary obligations as a parent holding access all the technical knowhow, factory premises and repair facilities. By calling all the assignment agreements under para 5.2.8(b) of the Resolution Plan titled 'Contracts with the Customers of the Corporate Debtor' as discharged cannot be construed as legally valid. 5.3.5 It was submitted that the established fact remains that all the original supply and maintenance agreement of the objector was executed with the Corporate Debtor alone and the purpose of assignment and reorganizing the operating structure of the Corporate Debtor was to ensure that the ground operations and maintenance could be effectively governed through a separate entity whereas, the pare still retained exclusive control over the repairs, equipment control, access to factory premises etc. 5.3.6 It was submitted that the Resolution Plan fails to look at the underlying structure between the parent and its subsidiaries. Further, the manner of approval by the Committee of Creditors too is questionable and all the stakeholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eholder are frozen at the stage of initiation of CIRP and as such no rights of equity in RISPL are exercisable by RPPL. It was contended further that RP of RISPL has already received a Resolution Plan as early as on April 2021, however the RP of RISPL for the reasons best known to her has not proceeded with the same yet. As a matter of record, it was contended that RISPL has proceeded with the Expression of Interest and has received the Resolution Plan, and the very fact proves that RISPL can survive without the Corporate Debtor. 6.4. It was submitted that the very basis of CIRP and Resolution plan is on the concept of clean slate as noted by the Apex Court and no Resolution Applicant who is pumping in money would want to be saddled with all obligations of the Corporate Debtor. 6.5. In relation to the contention of the RP of RISPL that the Resolution Plan seeks to deal with the assets in the custody of RISPL as a Lessee, it was submitted that the said claim is high untenable as no Resolution Plan of one Corporate can deal with the assets of another entity. In this context, it was submitted that whatever rights are vested with RISPL by way of leases etc., are bound to continue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even relevant since in any event the Resolution Applicant has undertaken to service the 1.5MW WEG on normal commercial terms for all the owners of such machines. Also it was submitted that the Resolution Plan does not seek any waiver or exemption from MNRE guidelines. It was also contended that the guidelines are not meant to mean that even if a supplier gets liquidated the customer will get services, as evidently there will be no one to service. In any event it was submitted that the guidelines cannot override the provisions of IBC, 2016. 6.9. It was also contended that if the Resolution Plan is rejected and if RPPL is ordered for liquidation, which is the only alternative then there would be no one available to ensure that the services are provided and as such if the Applicant is serious about obtaining services for the WEG purchased from RPPL it cannot be objecting to the approval of the Resolution Plan of RPPL. 6.10. It was submitted that the provisions of the Code and Regulations do not envisage any representative of disparate Operational creditors being made an invitee to the CoC. It only envisages that representatives of such Operational Creditors who are more than 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rkmen retrenchment was discussed only to reduce the fixed cost whereby fixed cost would come down and the same will not anyway increase CIRP cost. The Resolution Applicant in clause 5.5.9 of the Resolution plan deals with the accruals based on the position of accruals anticipated during submission of Resolution Plan. The Applicant not being an expert in these matters should not venture into second guessing the decisions of the COC. As if any additional amounts are received it would only flow to the COC member banks and as such the COC member banks have taken all steps to maximize realisation from the Resolution plan. 7. REPLY AND WRITTEN SUBMISSION OF COC oF RPPL 7.1. It was submitted that as on date, the objectors to the Resolution Plan are only customers of RISPL and not of RPPL and the nature of relief sought for in their main applications are for specific performance of a contract. Further, it was submitted that the basis of these claims are based on equity and assumption that they will be put to irreparable loss and in an insolvency proceedings, several players lose out because primary importance is given to the revival of the Company and the said decision is entirely vest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 12 CoC meeting it is seen that the CoC has clearly awarded marks on each of the parameters of the evaluation matrix. Further the CoC has filed an affidavit detailing the business transacted in the said meetings evidencing revision of the Resolution Plan by the Resolution Applicant multiple times based on the suggestion of the CoC. 8. FINDINGS OF THIS TRIBUNAL 8.1. In so far as the objections raised by the purported Operational Creditors in respect of the Corporate Debtor is concerned, it is seen that this Tribunal already vide its order dated 01.11.2021 has dealt in detail as regards the contention raised by the alleged Operational Creditors and has rendered its finding which is as follows; "5.6. As already alluded supra, the status of the Applicants who have filed the present Application is that they are the customers of RPPL or RISPL. We have gone through the Application filed by the Applicants and in all the Applications the status of their claim filed with the RP has not been disclosed by the Applicants. Further, from the nature of transactions that happened between the Applicants and the respective Corporate Debtor viz. RPPL and RISPL, it is clear that Applicants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iary of the Corporate Debtor would not form part of the Liquidation Estate. Thus, it is made clear that IBC, 2016, treats the assets of the holding and subsidiary company independently and expressly excludes the assets of the subsidiary Company to be treated along with that of the holding Company. While this being the position of law in relation to holding and subsidiary company under IBC, 2016, the next question which arises for consideration is that de hors the said statutory provision, whether this Tribunal can order for consolidating the assets of the holding and subsidiary company together and thereby order for consolidated CIRP in relation to RPPL and RISPL. 5.10. We have gone through decisions in regard to Consolidation of CIRP ordered by the NCLT Mumbai Bench in the Videocon case (supra) and by the Hon''ble NCLAT in the matter of Radico Khaitan (supra) and also in Oase Asia Pacific Pte. Ltd. (supra). It need not be emphasized that the provisions of IBC, 2016 does not specifically authorize consolidation of CIRP and as already discussed above, the provisions of IBC, 2016 treat the assets of the holding and subsidiary independently. It is seen that the NCLT Mumbai Bench by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. 5.13. Thus, we can see that a broad and equitable power has been conferred under Section 105(a) of the US Bankruptcy Code, which authorizes the Court to issue "any order, process or judgment". However, in so far as the Indian Bankruptcy law is concerned, similar powers have been conferred under Section 60(5)(c) of IBC, 2016, which are as follows; 60. Adjudicating Authority for corporate persons. - (5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of - (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows; 26. The resolution plan was approved by the CoC, in compliance with the provisions of the IBC. The jurisdiction of the Adjudicating Authority under Section 31(1) is to determine whether the resolution plan, as approved by the CoC, complies with the requirements of Section 30(2). The NCLT is within its jurisdiction in approving a resolution plan which accords with the IBC. There is no equity-based jurisdiction with the NCLT, under the provisions of the IBC. 30. The jurisdiction which has been conferred upon the Adjudicating Authority in regard to the approval of a resolution plan is statutorily structured by sub-Section (1) of Section 31. The jurisdiction is limited to determining whether the requirements which are specified in sub-Section (2) of Section 30 have been fulfilled. This is a jurisdiction which jis statutorily-defined, recognised and conferred, and hence cannot be equated with a jurisdiction in equity, that operates independently of the provisions of the statute. The Adjudicating Authority as a body owing its existence to the statute, must abide by the nature and extent of its jurisdiction as defined in the statute itself. 47. These decisions have laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of consolidation to state that these decisions were rendered on the issue of approval of Resolution Plan and hence the same cannot be applied to the facts of the present case. However, we are unable to accept the said contention, in view of the fact that the ratio decidendi which has been laid down in the above referred Judgment is that in order to exercise an 'equity jurisdiction', the same has to be conferred under the statutory framework i.e. under the provisions of IBC, 2016. 5.17. Further, as emphasised by the Hon'ble Supreme Court in the Judgment referred supra, the Indian Bankruptcy Code, has consciously did not confer any independent equity-based jurisdiction on the Adjudicating Authority. As a corollary thereof, if there is no equity-based jurisdiction available under the provisions of the IBC, 2016, then the consolidation of CIRP of group companies, in the absence of specific provisions under IBC, 2016, cannot be ordered by this Adjudicating Authority. 5.18. Further, it is also significant to point out here that, the Hon'ble Supreme Court, while dealing with the Indian Insolvency Laws, after examining the judicial interventions and innovations made under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Regulator/Adjudicator." 104, Once again, we must clarify that our observations here are not on the merits of the issue, which has not been challenged before us, but only limited to serve as guiding principles to the benches of NCLT and NCLAT adjudicating disputes under the IBC, going forward. (emphasis supplied) 5.19. Thus, it is also seen that the Hon'ble Supreme Court after examining the provisions of IBC has stated that IBC is a carefully considered and well thought out piece of legislation which sought to shed away the practices of the past. Further, it has been stated that the legislature has also been working hard to ensure that the efficacy of this legislation remains robust by constantly amending it based on its experience. Consequently, the need for judicial intervention or innovation from the NCLT and NCLAT should be kept at its bare minimum and should not disturb the foundational principles of the IBC. 5.20. Another raison d' etre on why this Adjudicating Authority is not in favour of ordering for consolidation is that in the cases referred to by the Learned Senior Counsels for the Applicants are that the major Financial Creditors have moved an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Plan has been voted by the CoC of RPPL, the Applicants, who are all customers of RISPL have moved the present Application seeking consolidation of CIRP in relation to the Corporate Debtors viz. RPPL and RISPL. As already alluded supra the Resolution Plan in respect of RISPL is also in the offing and it cannot be said that the creditors of RISPL, let alone the customers, would be left in lurch in the present scenario. 8.2. Thus, the objections raised by the alleged Operational Creditors is already answered by this Tribunal in the Consolidation Application vide its order dated 01.11.2021 and need not be gone further into by this Tribunal. 8.3. In so far as the objections raised by the one of the Financial Creditor who has withdrew his claim viz. ARCIL it was submitted that the said Financial Creditor originally submitted his claim before the RP in respect of the Corporate Debtor and subsequently withdrew their claim with the RP on the basis of the Judgment of the Hon'ble NCLAT in the matter of Vishnu Kumar Agarwal -Vs- Piramal Enterprises Limited, wherein it was held that the proceedings could not be initiated simultaneously against the Corporate Debtor and the Guarantor. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons with the said prospective Resolution Applicants to increase their offer. Thus, it could be seen that a Financial Creditor cannot be allowed to file its claim at any time during the CIRP period in respect of a Corporate Debtor as it would adversely upset the timelines and would not bring CIRP to a logical conclusion and would lead to perpetuality. Further, in the present case, the Applicant / alleged Objector is not even a member of the CoC cannot raise any objection to the present Resolution Plan in respect of the Corporate Debtor. 8.6. In relation to the objections raised by the RP of RISPL, which is the subsidiary of the Corporate Debtor, which is also under CIRP, it is seen that the RP of RISPL has raised the same issues that were raised by it at the time of consolidation / simultaneous CIRP in respect of the Corporate Debtor and as already adumbrated supra, the said contentions were rejected by this Tribunal vide its order dated 01.11.2021. Further, the RP of RISPL cannot seek to canvass the same points over and over during the approval of the Resolution Plan. It is also evident that the Resolution Plan for the subsidiary Company are already received and are before the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor under Sec. 53 Clause 5.2.2 deals in detail about the Discharge of the Operational Creditors Liabilities in detail. Reg. 38(1) - Resolution Plan identifies specific source of funds that will be used to pay the (a) Insolvency Resolution Process cost? (b)Liquidation value due to Operational Creditors? (c) Liquidation value due to dissenting financial creditors Clause 5.8 of the Resolution Plan deals with the Means of Finance of the Resolution Applicant for implementation of the Resolution Plan. Rea. 38(1A) - Resolution Plan shall include a statement as to how it has dealt with the interest of all the stakeholders, including financial creditors and operational creditors of the Corporate Debtor Clause 10 of the Resolution Plan enumerates how the interest of all the stakeholders including operational and financial creditors has been dealt with under the Resolution Plan. S. 3(2)(c) - Management of the affairs of the Corporate Debtor after approval of the Resolution Plan Clause 5.6 of the Resolution Plan deals with the Management and Control and Implementation of Terms in relation to the Resolution Plan. S. 30(2)(d) - Implementation and Supervision of the Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other Applicable laws. 2 Contracts with the customers of the Corporate Debtor: The customer contracts as defined in clause 5.2.8 (b)of the resolution plan, subsisting as of the Transfer Date shall be deemed to be terminated (unless within 90 (ninety) days from the Transfer Date, the Corporate Debtor expressly notifies the counterparty to any such Customer Contract in writing that such Customer Contract will continue to operate on the terms therein) without any claim for restitution, specific performance or damages of any nature whatsoever and all liabilities, damages or claims arising from the Customer Contracts, in relation to any period prior to the Transfer Date, or on account of the measures contemplated under the resolution plan including termination of these Customer Contracts shall, be deemed to be permanently extinguished by virtue of the order of the Adjudicating Authority approving this Resolution Plan. Further, by virtue of the business transfer agreement dated March 5, 2014 ("Business Transfer Agreement"), the O&M business of the Corporate Debtor was assigned to its subsidiary Regen Infrastructure Services Private Limited ("RISPL"). To bring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the continued litigations as mentioned in clause 5.2.10 of resolution plan, all inquiries, investigations, proceedings, whether civil or criminal, notices, causes of action, suits, claims, disputes, litigation, arbitration or other judicial, regulatory or administrative proceedings, against, or in relation to, or in connection with the Corporate Debtor, pending or threatened, present or future, in relation to any period prior to the Transfer Date or arising on account of the transaction herein shall stand withdrawn and dismissed and all liabilities or obligations thereto, whether or not set out in the books of the Corporate Debtor, will be deemed to have been written off in full and permanently extinguished and the Corporate Debtor or the Resolution Applicant shall, at no point of time be, directly or indirectly, held responsible or liable in relation thereto notwithstanding any adverse order that may have been passed in respect of the same by any relevant authority. Granted in terms of the judgment of the Hon'ble Supreme Court in Ghanashyam Mishra and Sons v. Edelweiss Asset Reconstruction Company Limited. 2021 SCC Online SC 313 6 The Resolution Applicant and the Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of I&B Code dealing with the resolution process. The dispensation provided in the I&B Code is entirely different. In terms of Section 30 of the I&B Code, the decision is taken collectively after due negotiations between the financial creditors who are constituents of the CoC and they express their opinion on the proposed resolution plan in the form of votes, as per their voting share. In the meeting of the CoC, the proposed resolution plan is placed for discussion and after full interaction in the presence of all concerned and the Resolution Professional, the constituents of the CoC finally proceed to exercise their option (business/commercial decision) to approve or not to approve the proposed resolution plan. In such a case, nonrecording of reasons would not per-se vitiate the collective decision of the financial creditors. The legislature has not envisaged challenge to the "commercial/business decision" of the financial creditors taken collectively or for that matter their individual opinion, as the case may be, on this count." 11. Further, the Hon'ble Supreme Court of India in the matter of Committee of Creditors of Essar Steels -Vs- Satish Kumar Gupta &Ors. in Civil A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution ~ plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code. 58. Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resojution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with Section 31(1) of the I&B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the I&B Code, which is limited to matters "other than" enquiry into the autonomy or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s recent decision in Jaypee Kensington Boulevard Apartments Welfare Association &ors. v. NBCC (India) Ltd. &Ors in Civil Appeal no. 3395 of 2020 dated 24.03.2021 has held as follows; 76. The expositions aforesaid make it clear that the decision as to whether corporate debtor should continue as a going concern or should be liquidated is essentially a business decision; and in the scheme of IBC, this decision has been left to the Committee of Creditors, comprising of the financial creditors. Differently put, in regard to the insolvency resolution, the decision as to whether a particular resolution plan is to be accepted or not is ultimately in the hands of the Committee of Creditors; and even in such a decision making process, a resolution plan cannot be taken as approved if the same is not approved by votes of at least 66% of the voting share of financial creditors. Thus, broadly put, a resolution plan is approved only when the collective commercial wisdom of the financial creditors, having at least 2/3rd majority of voting share in the Committee of Creditors, stands in its favour. 77. In the scheme of IBC, where approval of resolution plan is exclusively in the domain of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisite majority; and there is no valid reason in law to question the decision so taken by the Committee of Creditors, the adjudicatory process, whether by the Adjudicating Authority or the Appellate Authority, cannot enter into any quantitative analysis to adjudge as to whether the prescription of the resolution plan results in maximisation of the value of assets or not. The generalised submissions and objections made in relation to this aspect of value maximisation do not, by themselves, make out a case of interference in the decision taken by the Committee of Creditors in its commercial wisdom 78. To put in a nutshell, the Adjudicating Authority has limited jurisdiction in the matter of approval of a resolution plan, which is well defined and circumscribed by Sections 30(2) and 31 of the Code read with the parameters delineated by this Court in the decisions above referred. The jurisdiction of the Appellate Authority is also circumscribed by the limited grounds of appeal provided in Section 61 of the Code. In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC; and there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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