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TMI Blog2022 (9) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 06.12.2018 and 12.12.2018, i.e., subsequent to approval of Resolution Plan by CoC, those letters are of no help to the Appellant. Those letters cannot be taken into consideration when the plan was approved by CoC and Adjudicating Authority. In case, any error or illegality is found, it is the duty of the Adjudicating Authority to send back Resolution Plan for reconsideration by CoC. But no illegality or contravention of provisions of IBC was found by Adjudicating Authority and as such approved the Resolution Plan. When the Resolution Plan is approved and attained finality, the same cannot be altered or modified or withdrawn - the Appellant is not entitled to claim any relief in the present Appeal as the Resolution Plan was already approved and attained finality. On this ground alone, the Appeal is liable to be dismissed. Whether the Appellant being dissenting secured Creditor is competent to challenge approval of Resolution Plan by filing the instant Appeal? - HELD THAT:- When the Appellant is dissenting Creditor, Appellant is not competent to challenge the approved Resolution Plan and file an Appeal under Section 61 of IBC before this Tribunal. Applying the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red as IBC ), has been filed challenging the order dated 9th May, 2019 passed by National Company Law Tribunal, Hyderabad Bench, Hyderabad (hereinafter referred as Adjudicating Authority ) in I.A. No. 24 of 2019 in Company Petition(IB) No. 41/7/HDB/2017. 2. The Appellant is a member of Committee of Creditors (hereinafter referred as CoC ) and a Financial Creditor of Deccan Chronicle Holdings Ltd. ( Corporate Debtor ). The Appellant filed an Application before the Adjudicating Authority contending that the Resolution Plan dated 11.12.2018 submitted by Vision India Fund, a scheme floated by SREI Multiple Asset Investment Trust ( Resolution Applicant ) is illegal and discriminatory and in violation of the Code and other applicable law. 3. It is contended that the Adjudicating Authority passed the order erroneously dismissing the Application filed by the Appellant based on erroneous appreciation of facts and law, and committed an error apparent on the face of record and also arrived at a conclusion without recording specific finding on specific issue raised by the Appellant, specific grounds are as follows: a) The order has been passed ignoring the provision of IBC and set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmittal India Private Limited v. Satish Gupta and Ors. Civil Appeal Nos. 9402-9405 of 2018. Thus the Adjudicating Authority committed grave error in dismissing the petition filed by the Petitioner questioning the basis of allotment of share of amount in the approved Corporate Insolvency Resolution Plan (hereinafter referred as CIRP ) and requested to set aside the order passed by the Adjudicating Authority and allow the Application setting aside the Resolution Plan. 4. The Resolution Professional Ms. Mamta Binani, Respondent No. 1 herein, filed Reply Affidavit raising several objections while denying the material grounds raised in the Appeal. The acceptance of Resolution Plan is purely within the domain of CoC which has approved the Resolution Plan with an overwhelming majority of 81.39% affirmative votes. Therefore, acceptance of the Plan is based on commercial wisdom, same cannot be set aside. The Respondent No. 1 diligently complied the requisites of Section 30(2) of IBC before presenting the Resolution Plan for its approval as evident from the order dated 03.06.2019 by Adjudicating Authority at Hyderabad. After compliance of Section 30(3) by Respondent No. 1, the Resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of categorization of the Financial Creditors into Financial Creditor Category- A and Category B . The said category was allocated by the Resolution Applicant due to lack of consensus amongst the members of the CoC. The allocation was made among the Financial Creditors based on security interest held by each Financial Creditor. The Financial Creditor based on security in their favour were categorized in two categories i.e. Category A and Category B . 9. Canara Bank is not Resolution Applicant but one of the Financial Creditors, who, however filed I.A. No. 252 of 2018 and sought direction against the Resolution Professional to consider the liquidation value attributable to Financial Creditor on priority charge basis and placed revised claim filed on 30.06.2018 for approval by the Resolution Professional before the CoC again for voting which was allowed by the Adjudicating Authority vide order dated 06.08.2018 directing the Resolution Professional to place revised claim submitted by Financial Creditor i.e. on priority charge basis before the CoC for consideration. 10. It is specifically contended that the Hon ble Apex Court in K. Sashidhar Vs. Indian Overseas Bank Ors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the approval of Resolution Plan by CoC is purely a commercial decision taken by CoC and the same cannot be interfered either by Adjudicating Authority or by this Tribunal, since it was accepted in the 20th CoC Meeting dated 10.12.2018 with approved majority of 81.39%. The Respondent admitted that Memorandum of Understanding dated 30.05.2014 executed between the Axis Bank, Canara Bank, ICICI Bank Ltd., IDBI Bank Ltd., IDFC Ltd., Kotak Mahindra Bank Limited wherein the parties agreed as follows: 1. Sale of Trademarks: (a) The Parties hereby agree for sale of Trademarks namely Deccan Chronicle , Andhra Bhoomi , The Asian Age and Financial Chronicle without recourse to the legal process; i.e. either through a fresh tendering process in exercise of the powers conferred on IBI Bank under a power of attorney executed in its favour or through such other process/procedure as may be mutually decided by the Parties. (b) The sale process shall include fresh valuation of Trademarks, invitation of fresh tenders etc. and each such steps shall be decided by the Parties in consultation and in agreement with each other. (c) The Parties agree that sale of Trademarks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant being a dissenting Creditor is not entitled to question the commercial wisdom of CoC in approving the Resolution Plan submitted by Vision India Fund-SREI Multiple Asset Investment Trust- Resolution Applicant, relying upon several decisions, which will be referred to at an appropriate stage, while deciding the real controversy. 19. Learned Counsel for the other Respondents supported the order impugned in the appeal and they also filed their Written Submissions which will be referred to at an appropriate stage, while deciding the real controversy. However, Octopus Production Private Limited, Intervenor is sailing with the Appellant, requested to send back the Resolution Plan to CoC. 20. Considering the rival contentions, the points need be answered by this Tribunal are as follows: a) Whether the Appellant is entitled to claim relief under Section 60(5) when the Resolution Plan was approved and attained finality? b) Whether the Appellant being dissenting secured Creditor is competent to challenge approval of Resolution Plan by filing the instant Appeal? c) Whether the alleged discrimination overrides the commercial wisdom of the CoC, if so, the order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng discriminatory and contrary of law, but this objection was not taken into consideration but approved the Resolution Plan in 20th CoC meeting. 23. Admittedly, the Appellant did not challenge the approved Resolution Plan before this Appellate Authority invoking Section 61 of IBC. The Appellant again invented a devise under Section 60(5) IBC to challenge approved plan by COC and Adjudicating Authority, circumventing law without any basis. 24. It is undoubtedly clear that the Appellant did not vote in favour of the Resolution Plan but it was approved by a majority of 81.39 % by the CoC and the same was approved by the Adjudicating Authority vide order dated 09.05.2019 passed in I.A. No. 24/2019 in Company Petition (IB) No. 41/7/HDB/2017. The approval of the Resolution Plan was not challenged on any count by the Appellant-IDBI as on date, but, circumventing the law, invented a devise, filed an Application under Section 60(5) of IBC to pass appropriate order without assailing the approved Resolution Plan, contending that the Resolution Plan dated 11.12.2018 is discriminatory and not in compliance with the provisions of IBC. The Adjudicating Authority rejected the claim of the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aside the Resolution Plan indirectly or modification of the plan directly. Therefore, filing of such Application under Section 60(5) is nothing but an abuse of process of law and it cannot be a devise to delay the proceeding under IBC. When the Resolution Plan is approved and attained finality, the same cannot be altered or modified or withdrawn in view of the law declared in Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited and Anr. referred supra. Keeping in view the law laid down by the Hon ble Apex Court, we have no hesitation to hold that the Appellant is not entitled to claim any relief in the present Appeal as the Resolution Plan was already approved and attained finality. On this ground alone, the Appeal is liable to be dismissed. Accordingly, the point is held against the Appellant and in favour of the Respondents. POINT NO. 2: 29. One of the main contentions of the Appellant is that the Appellant did not agree with the approval of the Resolution Plan in the CoC and raised certain objections both in 12th and 20th CoC meetings, still Resolution Plan was approved by the CoC. Even after approval, the Appellant addressed le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld against the Appellant and in favour of the Respondent. POINT NO. 3: 32. One of the contentions of the Counsel for the Appellant is that no priority was given for payment of debt, though, the security interest created in its favour is more valuable and no security interest was created in favour of Canara Bank, whereas, Mr. Dhruv Mehta, learned Sr. Counsel for Respondent No. 3 and learned Sr. Counsel, Shri Dutta contended that once, the Resolution Plan is approved by CoC and by the Adjudicating Authority recording its satisfaction of compliance of Section 30(2)(4) in an Application filed under Section 31 of IBC it can t be set aside. At best the duty of the Resolution Professional is to follow the procedures prescribed under Section 30(2) IBC. According to Section 30(2) of IBC, the Resolution Professional shall examine each Resolution Plan received by him to confirm that each Resolution Plan provides for payment of Insolvency Resolution Process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor, provides for the payment of debts of Operational Creditors in such manner as may be specified by the Board which shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 30(2) and 61(3) of IBC. In another judgment Jaypee Kensington Boulevard Apartments Welfare Association and Others v. NBCC (India) Limited and others reiterated the same principle. In case of K. Sashidhar Vs. Indian Overseas Bank Ors. and Maharashtra Seamless Ltd. V. Pandmanabhan Venkatesh Ors. CIVIL APPEAL NOS. 4967-4968 OF 2019 expressed the same view by Hon ble Apex Court. 35. In Pratap Technocrates (P) Ltd. vs. Monitoring Committee of Reliance Infratel Ltd . Civil Appeal No 676 of 2021 (2021) 10 SCC 623 held that jurisdiction of Adjudicating Authority cannot extend into entering upon merits of a business decision made by a requisite majority of the CoC in its commercial wisdom. Under the Indian insolvency regime, it appears that a conscious choice has been made by the legislature to not confer any independent equity-based jurisdiction on the Adjudicating Authority other than the statutory requirements laid down under Section 30(2) of the IBC. 36. In the Judgment Ebix Singapore Private Limited vs. Committee of Creditors of Educomp Solutions Limited and Anr. held, in a commercial decision taken by CoC, while accepting the Resolution Plan by their commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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