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TMI Blog2022 (8) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution plans as intended by the 1st Respondent/RP under the guise of final compliant resolution plan as stated by the Respondent/RP in his e-mail dated 13.08.2020. This Tribunal makes it clear that the amendment to the Regulation 39(3) of the IBBI Regulations, 2016 as referred above is gave the powers to the committee to evaluate resolution plans received as per evaluation matrix i.e. RFRP and deliberate on the feasibility and viability and vote on all such resolution plans simultaneously, does not mean for calling fresh plans. The evaluation matrix has been provided under Regulation 36-B of IBBI Regulations, 2016 and the Regulations in this regard along with the substantial provision of law have to be read harmoniously. The Learned Adjudicating Authority misinterpreted the Regulations 39(3) of the I B Code, 2016 and not properly understood the judgment of the Hon ble Supreme Court in JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE ASSOCIATION ORS. VERSUS NBCC (INDIA) LTD. ORS. [ 2021 (3) TMI 1143 - SUPREME COURT ]. The Hon ble Supreme Court in the aforesaid judgment held that the said amendment of sub-regulation (3) of Regulation 39 of CIRP Regulations insertion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution Professional invited Expression of Interest (EOI) from prospective Resolution Applicants and one Sh. D.V. Satyanarayana alone submitted Resolution Plan however, the CoC refused the said plan on the ground of ill net-worth. The RP again invited EOI. The Appellants on 02.03.2020 submitted EOI with all necessary documents and deposited processing fee of Rs.15 lakhs. On 14.04.2020 the Appellants as consortium submitted Resolution Plan enclosing bank guarantee for Rs.1 crore issued by State Bank of India, Vishakhapatnam. However, the CoC extended time till 27.04.2020 and advised the Applicants to revise the plans in case if they want to. The Appellants strongly protested the said decision vide e-mail dated 18.04.2020. The RP vide his e-mail dated 28.04.2020 informed the Appellants that the plans will be opened in the presence of CoC members on 29.04.2020 and requested to participate. The plans have been opened in the presence of CoC and the contents and financial figures of plan were known to all members who attended the virtual meeting of CoC dated 29.04.2020. However, no decision was taken by the CoC on the plan submitted by the Appellants. Further time was extended till 04.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the other grounds. The Appellants did not visualise the wrongful intention of the RP. 7. It is submitted that the RP vide his mail dated 13.08.2020 informed that CoC meeting was held on 12.08.2020 and decided to consider all Resolution Plans which comply with the code and the Regulations. It is submitted that the RP travelled beyond the scope of IBC and IBBI Regulations of erstwhile and amended regulation dated 07.08.2020 and also in disobedience of orders passed in I.A. No. 299 of 2020 invited final compliant Resolution Plan from these Appellants and also from Sh. D.V. Satyanarayana with changes if any, in the financial proposal and directed to submit the same by 15.08.2020. 8. It is submitted that inviting final compliant Resolution Plan on the pretext of IBBI amended Regulation is the decision of the RP. The minutes of CoC meeting held on 12.08.2020 would prove the same, if it was brought on record of this Tribunal. It is submitted that due to lockdown, Covid-19 pandemic the CoC meeting conducted from 24.03.2020 till the date by the RP were held virtually. Other than CoC members third party aides of RP have participated through virtual mode only. The financial offer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. From page 4 and 5 of the said papers i.e. e-mail correspondence exchange between RP and Sh. D.V. Satyanarayana clearly speaks that Sh. D.V. Satyanarayana submitted in-complete revised Resolution Plan on 15.08.2020 and on the suggestion of the RP submitted amended revised Resolution Plan on 21.08.2020 and this fact was suppressed by the RP during the proceedings held on 27.08.2020. From Page No.4 it clearly indicates that Sh. D.V. Satyanarayana is still not having net-worth and depending on his investors to prove his net-worth. It is to be noted that the earlier plan submitted by Sh. D.V. Satyanarayana was rejected by the very same CoC on the ground of ill net-worth, despite knowing the same the RP accommodated Sh. D.V. Satyanarayana to submit revised plan by 15.08.2020 and updated revised Resolution Plan by 21.08.20220 in contrary to his stand taken in I.A. No. 299 and 498 of 2020. The RP suppressed all these facts and misled the Adjudicating Authority for wrongful gains. 13. It is submitted that the CIRP commenced on 09.04.2019 and the RP consumed more than 485 days as on 15.08.2020 for conducting CIRP of the Corporate Debtor without any fruitful results. The intentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly placed reliance on the above decision and dismissed the Application No. 606 of 2020. 19. The Appellants resorted to putting forth an entirely new case by pleading several new facts that did not form part of the original disputes or the pleadings before the Adjudicating Authority and consequently raising fresh grounds of challenge at the appellate stage. The Appellants have shifted the focus from the CoC to blaming the RP in the present Appeal. The Appellants have proceeded to make unwarranted personal attacks on this Respondent by levelling serious personal allegations against the RP, casting aspersions on his integrity and the credibility of the manner in which the CIRP is being conducted. 20. The Learned Senior Counsel submitted that the Appellants have raised the following pleadings in the Appeal for the first time. 21. The argument of the Appellants now taken a contrary stand that prospective applicability are retrospectivity of the amended Regulation 39 is not in question and that the only issue for determination is whether the RP or CoC can call for final compliant plan after having declared the Appellants as H-1 bidder. The Appellants in I.A. No. 606/2020 stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als by the CoC. The Appellants did not acquire any vested right to demand of voting by CoC only on their Resolution Plan. The plan of the Appellant was placed thrice by the RP in CoC meetings, the CoC in their commercial wisdom made certain observations and sought certain changes to the Resolution Plan of H-1 bidder. 27. It is reiterated that the IBBI had notified amendment to the Regulations (amendment) dated 07.08.2020 which effectively brought an amendment to the Regulation 39 by interalia imposing a requirement to vote on all compliant Resolution Plans simultaneously. It was decided in the 28th CoC meeting held on 12.08.2020 to consider all compliant resolution plans for voting by CoC members in compliance with amendment to Regulation 39 of CIRP Regulation. However, no voting took place. 28. The conduct of RP and the CoC in applying the amendment to the CIRP of the Corporate Debtor was done in a just and bonafide manner by giving equal opportunity to all the eligible shortlisted Resolution Applicants including the Appellants. 29. In view of the reasons as stated above the Learned Counsel prayed this Tribunal to dismiss the Appeal. Respondent No. 2 Submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the RP through mail on 12.08.2020. 33. The Appellant challenged the decision of CoC in giving an opportunity to both RA s in view of the amendment to IBBI Regulations dated 07.08.2020 by filing I.A. No. 606 of 2020 before the Adjudicating Authority. The Adjudicating Authority vide order dated 27.08.2020 was pleased to grant interim stay on the voting proposal. Hence, the voting could not be initiated in view of the interim. 34. In view of the reasons as stated above the Learned Counsel prayed this Bench to dismiss the Appeal. Analysis / Appraisal: 35. Heard, the Learned Counsel appeared for the respective parties perused the pleadings, documents and relevant citations relied upon by them. After hearing and analysing the pleadings, the moot point for consideration is whether the order passed by the Adjudicating Authority dated 07.05.2021 in I.A. No.606 of 2020 in CP No.43 of 2018 (Impugned Order) is justified or called any interference. 36. The Appellants have filed the above I.A. No. 606 of 2020 under Section 60(5) of the I B Code, 2016 before the Adjudicating Authority seeking a direction to the CoC not to consider any Resolution Plan other than the plan subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant did not take steps for re-submitting the resolution plan as on date, even though fresh plans were called. The information was also sent to the Applicant as per Regulations for submitting any revised resolution plan. The last date for submitting resolution plan was 27.04.2020. However, Applicant has not submitted any resolution plan by 27.04.2020, but on the other hand, Applicant moved this Application on the very same date seeking extension of time for submitting the resolution plan. Considering the submissions made by the Counsel for Applicant and also hearing the Counsel for Resolution Professional and considering the existing circumstances due to lockdown, I feel some time to be given to the Applicant to submit the Resolution Plan, if any, by 04.05.2020. In the meantime, the CoC to examine the other resolution plans already received but final decision to be taken after 04.05.2020, in case, if any plan is submitted by the Applicant herein by 04.05.2020. To make it clear final decision to be taken on the resolution plans after 04.05.2020. This Application is accordingly disposed of. 40. From the above order of the Adjudicating Authority, three aspects emerges i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... you that you have been declared as highest bidder (H1) in 24th CoC Meeting of Leo Meridian Infrastructure Projects and Hotels Limited. The RP also admitted in its reply dated 22.11.2021 whereby it is admitted that the Appellant was declared H1 bidder and also stated that the Appellant modified the Resolution Plan based on CoC suggestions. 45. However, in the said letter, it is also stated that the said Resolution Plan will be voted separately and invited the Appellant to attend the 24th CoC meeting at 3:45 P.M. through WebEx. The Appellant also submitted revised Resolution Plan on 09.07.2020. The RP addressed a letter to the Appellant dated 20.07.2020 stating that the Appellant may be participated for the negotiations with the officials of the CoC members. Thus, it is clear that the Resolution plan of the Appellant is under consideration. 46. This Tribunal intend to make a note on the aspect of declaring the prospective Resolution Applicant as H1 bidder is on the basis of evaluation of the plan submitted by the prospective Resolution Applicant. The RP after his appointment shall publish the brief particulars of the invitation for Expression of Interest (EoI) in Form-G in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held on Aug 12, 2020, have decided to consider all resolution plans which comply with the requirements of the Code and the regulations made thereunder, for the purposes of voting (to determine on the acceptance of rejection of said plans). In view of the above, I am writing to request you to send in your final complaint resolution plan to us no later than midnight of August 15, 2020. You may take this opportunity to revise the financial proposal. If you choose to do so. However, in the interest of moving forward with the process quickly, we ask that you provide 2 versions of the final resolution plan - one clean version that can be presented to the CoC for voting, and another marked up version that shows the changes in track mode between the latest final resolution plan and the most recent version of the resolution plan as submitted by you earlier. This is also a reminder to please incorporate the changes suggested by us in our emails from Aug 1, 2020 i.e. 48. The RP in the above communication/letter relied upon the amendment to the Regulations came into effect on 07.08.2018 and in view thereof the CoC in its meeting held on 12.08.2020 decided to consider all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority seeking a direction to consider their plan to be considered by the CoC is concerned, the Adjudicating Authority dismissed the said I.A. vide order dated 27.08.2020 specifically holding that the Resolution Plan received after due date and placing them before the CoC is held to be illegal and CoC was not authorised to approve the arbitrary and illegal conduct of CIRP. The Appellants further contended that despite the above rejection of their Resolution Plan by the CoC, the 4th Applicant in hat I.A namely P. Vasudeva Reddy is submitting the plan through another Resolution Applicant by giving Power of Attorney, taking the advantage of the letter of the RP dated 13.08.2020. It is also contended that the RP contravening the provision of law by misinterpreting the regulations and misguiding the CoC to his advantage. 53. It is also seen that the Appellants have filed I.A. No. 1059 of 2020 in I.A. No. 657 of 2020 in CP No. 43 of 2018 before the Adjudicating Authority praying the Authority to direct the Resolution Professional to produce the minutes of meeting of CoC members held from 05.05.2020 to 13.10.2020 and more particularly the minutes of CoC meeting held on 12.08.2020 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed an I.A. bearing No. 299 of 2020 before the Adjudicating Authority and the Adjudicating Authority extended the time till 04.05.2020. From the sequence of events, it is clear that the date extended to submit the resolution plans till 04.05.2020 and the said order had attained finality and no challenge was made to the said order. While so, the amendment is w.e.f. 07.08.2020. 57. As per the amendment to the above Regulation i.e. sub-regulation (3) (a), the Resolutions Plans shall be evaluated as per evaluation matrix under sub-regulation (2) of Regulation 39. Further, the committee shall vote on all such Resolution Plans simultaneously. However, as per sub-regulation (1) of Regulation 39, the prospective Resolution Applicant in the final list may submit a Resolution Plan or plans prepared in accordance with the Code and these regulations, meaning thereby the time prescribed for submission of plans in the Regulation and the Code shall be followed scrupulously. The substantial provision is made under Section 30 of the Code for submissions of Resolution Plan. The amendment to the above Regulation is only with regard to the plans which have already received as per the date fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aneously, is strictly in accordance with law. From the above submissions, it is clear case that the RP intend to invite fresh resolution plans under the guise of final compliant resolution plan is in our view highly misinterpreting the amendment to the regulations and it is act of contemptuous. 59. Hence, this Tribunal also draws adverse inference against the RP. The amendment does not give the powers to call for fresh resolution plans as intended by the 1st Respondent/RP under the guise of final compliant resolution plan as stated by the Respondent/RP in his e-mail dated 13.08.2020. 60. This Tribunal makes it clear that the amendment to the Regulation 39(3) of the IBBI Regulations, 2016 as referred above is gave the powers to the committee to evaluate resolution plans received as per evaluation matrix i.e. RFRP and deliberate on the feasibility and viability and vote on all such resolution plans simultaneously, does not mean for calling fresh plans. The evaluation matrix has been provided under Regulation 36-B of IBBI Regulations, 2016 and the Regulations in this regard along with the substantial provision of law have to be read harmoniously. 61. As discussed, (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( Regulations in short) deals with invitation for expression of interest. Clause 6 of Regulation 36-A provides that The expression of interest received after the time specified in the invitation under Clause (b) of the sub-regulation (3) shall be rejected. Although the Resolution Professional in his Affidavit before Adjudicating Authority mentioned the time of receipt of e-mail dated 18th August, 2018 (Annexure A-9) from the Appellant at 11:50:58 hours, the document filed by the Appellant himself shows that it was received/sent after 12 o clock. In terms of Clause 6 of Regulation 36-A, even if such e-mail was to be categorized as an expression of interest, it would require to be rejected. Finding 64. The Learned Adjudicating Authority misinterpreted the Regulations 39(3) of the I B Code, 2016 and not properly understood the judgment of the Hon ble Supreme Court in M/s Jaypee Kensington Boulevard Apartments Welfare Associations Ors. Vs. NBCC (India) Ltd. Ors. in Civil Appeal No. 3395 of 20202. The Hon ble Supreme Court in the aforesaid judgment held that the said amendment of sub-regulation (3) of Regulation 39 of CIRP Regulations insertion of sub-regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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