9911796707
TMI Blog2022 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... rs strictly adhering to Section 30(2)(b) and Section 53 of IBC. Even otherwise, the plan was approved by the CoC with 100% majority voting share. The Adjudicating Authority shall examine, whether the approved resolution plan by CoC is contrary to any law or whether it is viable and implementable, and the Adjudicating Authority is not under an obligation to examine the amount to be distributed to the different class of creditors. Thus, the once the plan was approved by CoC in its commercial wisdom, the Adjudicating Authority cannot interfere with such decision taken by the CoC, unless the plan is contrary to any of the provisions of IBC or any other law. It is not the case of the Appellant that in approved is against any of the provisions of the IBC or and any other, but, pleaded only discrimination. This Tribunal in DAMODAR VALLEY CORPORATION VERSUS KHARKIA STEELS PVT. LTD., MR. UDAY NARAYAN MITRA LSI RESOLUTION PRIVATE LIMITED, AMRITVANI EXIM PRIVATE LIMITED [ 2022 (3) TMI 821 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] , this Tribunal held that the NCLT does not hold equity-based jurisdiction and any distribution which is in accordance with Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this plan was approved in contravention in any law. In those circumstances, the Appellate Tribunal while exercising jurisdiction under Section 61 cannot interfere with such order as no law as the approval of resolution plan is in compliance of statutory procedure. Therefore, there are no ground to interfere with the order passed by the Adjudicating Authority challenging for interference of this Court, while exercising jurisdiction under 61 of the IBC. Appeal dismissed. - Company Appeal ( AT ) ( Insolvency ) No. 118 of 2022 - - - Dated:- 30-9-2022 - [ Justice M. Satyanarayana Murthy ] Member ( Judicial ) And [ Barun Mitra ] Member ( Technical ) For the Appellant : Ms. Suruchi Aggarwal , Sr. Advocate with Mr. Ravi Sharma , Advocate For the Respondent : Mr. Abhishek Anand , Mr. Karan Kohli, Mr. Mohak Sharma, Mr. Sahil Bhatia , Advocates for R - 2 5 Mr. S K Singhi , Mr. Ankit Singh, Mr. Akshay Singhi, Mr. Sougata Ganguly, Mr. Harsh Khirwal , Advocates for R - 3 , RP Mr. Saurav Kalia , Mr. Sidhartha Sharma, Mr. Aniket Agarwal, Mr. Arjun Asthana, Ms. Anushka Sarkar , Mr. Siddhartha T. Advocates for R - 1 4 JUDGMENT ( Per Hon ble Mr. Justice M. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnouncement calling attention of all the creditors of Respondent No.1, Corporate Debtor to file their respective claims on or before 11.10.2019 from Mr. Rajesh Jhunjhunwala an Interim Resolution Professional ( IRP ) i.e. Respondent No.3 herein. In view of the Public Announcement dated 30.09.2019 the Appellant CSPDCL came to know that petition of Respondent No.2 for initiation of Corporate Insolvency was admitted by the NCLT, Cuttack vide order dated 27.09.2019 and Mr. Rajesh Jhunjhunwala was appointed as Interim Resolution Professional of Corporate Debtor. 7. In pursuance of Form-A, Public Announcement the Appellant CSPDCL submitted its claim in Form-B claiming Rs. 14,70,72,580/- to 3rd Respondent, IRP vide its email dated 11.10.2019, to email id [email protected]. On the same date i.e. 11.10.2019 Respondent No.3 had sent email confirmation, acknowledging receipt of Form-B for Rs. 14,70,72,580/- from Appellant CSPDCL . 8. On 26.11.2021 when 4th Respondent Singhal Enterprises Private Limited had approached the Appellant for HT Connection, the Appellant came to know that the NCLT, Cuttack vide its order dated 08.11.2021 passed by NCLT, Cuttack Bench in I.A. No.141/CT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance amount in the form of loans. 12. During the Corporate Insolvency Resolution Process (hereinafter referred as CIRP ) of the Corporate Debtor had 4 Financial Creditors who were also part of the CoC. This included J.M. Financial Asset Reconstruction Company Ltd., Bank of Baroda, Edelweiss Asset Reconstruction Company Ltd. and Union Bank of India. The entire sum allocated to the Financial Creditors as per resolution plan, being a sum of Rs.1,43,23,00,014/-, after adjustment for excess amount of insolvency resolution process costs in terms of the Clause 6.3.2(iv) of the resolution plan, has been paid to the Financial Creditors from the escrow account opened in terms of the resolution plan and each of the Financial Creditors have also issued their No-dues and security release letters dated 22.12.2021 in favour of the Respondent No.1. 13. All other payments including insolvency resolution process costs, employee and workmen dues and dues of Operational Creditors have been tendered by the completion date from the funds arranged by the Respondent No.4 in the following summary: Sl. No. Category Amount (Rs. Crores) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital, Memorandum and Articles of Association and Board of Directors of the Respondent No.1. A copy of the rec company master data of the Respondent No.1 as downloaded from the website of the MCA, is annexed hereto and marked with the letter R-3 . By arranging amount shown in the above table the resolution plan was implemented and paid off and discharged and the Respondent No.1. 14. The Appellant as Operational Creditor of the Respondent No.1 also submitted its claim in Form-B under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 making a claim for Rs. 14,70,72,580/-. That claim was admitted by resolution professional had however admitted a sum of Rs.14.67 crores, which was approved by 100% members of the Committee of Creditors, the total outlay for payment to Operational Creditors was Rs.3.5 crores out of which the entitlement of the Appellant as the Operational Creditor was Rs.72,83,022/-. The amount was tendered by NEFT by Respondent No.1 to the Operational Creditors before the completion date. As per the details of their bank accounts available with the Respondent No.1 including the Appellant herein. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bligation to inform the Liquidation value of the Corporate Debtor, since the Appellant is not a member of the Committee of Creditors and that the order was passed only of a consideration of the entire material by the Adjudicating Authority and requested to dismiss the Appeal and it is devoid of merits. Respondent No.1 4 placed reliance on judgment of Apex Court in Indian Resurgence ARC Private Limited Vs. M/s Amit Metaliks Limited Anr. (2021) SCC OnLine SC 409, Pratap Technocrats Private Limited Ors. Vs. Monitoring Committee of Reliance Infratel Limited Anr. (2021) 10 SCC 623, Damodar Valley Corporation Vs. Kharkia Steels Pvt. Ltd. in Company Appeal (AT) (Insolvency) No. 1111 of 2020 and Ghanashyam Mishra Sons Private Limited through authorised Signatory Vs. Edelweiss Asset Reconstruction Company Ltd. through the Director and Ors. (2021) SCC Online SC 313. On the strength of these judgments, Learned Counsel for Respondent No.2 5 Mr. Abhishek Anand requested to dismiss the Appeal confirming the order passed by Adjudicating Authority. Counsel for Respondent No. 3 Mr. Sougata Ganguly and Mr. Saurav Kalia for Respondent No.1 and 4, supported the order under challenge. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: a) The Insolvency Resolution Process costs and the liquidation costs paid in full; b) The workmen s dues for the period of twenty-four months preceding the liquidation commencement date; and c) debts owed to a secured creditor in the event of secured creditor has relinquished security in the manner set out in Section 52; 53(1) Notwithstanding anything to the contrary contained in any law enacted by the Parliament or any State Legislature for the time being in force, the proceeds from the sale of the liquidation assets shall be distributed in the following order of priority and within such period and in such manner as may be specified, namely:- a) the insolvency resolution process costs and the liquidation costs paid in full; b) the following debts which shall rank equally between and among the following:- (i) workmen s dues for the period of twenty-four months preceding the liquidation commencement date; and (ii) debts owed to a secured creditor in the event such secured creditors has relinquished security in the manner set out in section 52; c) wages and any unpaid dues owed to employees other than workmen for the period of twelve months p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its reasoning kept the above aspect in mind while approving resolution plan, which is to be examined by the Adjudicating Authority. 26. Similarly, in para 72 the Hon ble Supreme Court observed as follows: 72. This is the reason why Regulation 38(1A) speaks of a resolution plan including a statement as to how it has dealt with the interests of all stakeholders, including operational creditors of the corporate debtor. Regulation 38(1) also states that the amount due to operational creditors under a resolution plan shall be given priority in payment over financial creditors. If nothing is to be paid to operational creditors, the minimum, being liquidation value - which in most cases would amount to nil after secured creditors have been paid - would certainly not balance the interest of all stakeholders or maximise the value of assets of a corporate debtor if it becomes impossible to continue running its business as a going concern. Thus, it is clear that when the Committee of Creditors exercises its commercial wisdom to arrive at a business decision to revive the corporate debtor, it must necessarily take into account these key features of the Code before it arrives at a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors. 12. As regards the process of consideration and approval of resolution plan, it is now beyond a shadow of doubt that the matter is essentially that of the commercial wisdom of Committee of Creditors and the scope of judicial review remains limited within the four-corners of Section 30(2) of the Code for the Adjudicating Authority, and Section 30(2) read with Section 61(3) for the Appellate Authority. In the case of Jaypee Kensington (supra), this Court, after taking note of the previous decisions in Essar Steel (supra) as also in K. Sashidhar v. Indian Overseas Bank: (2019) 12 SCC 150 and Maharashtra Seamless Limited v. Padmanabhan Venkatesh: (2020) 11 SCC 467, summarised the principles as follows:- 77. In the scheme of IBC, where approval of resolution plan is exclusively in the domain of the commercial wisdom of CoC, the scope of judicial review is correspondingly circumscribed by the provisions contained in Section 31 as regards approval of the Adjudicating Authority and in Section 32 read with Section 61 as regards the scope of appeal against the order of approval. 77.1. Such limitations on judicial review have been duly underscored by this Court in the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Authority to proceed on any equitable perception or to assess the resolution plan on the basis of quantitative analysis. Thus, the treatment of any debt or asset is essentially required to be left to the collective commercial wisdom of the financial creditors. Where the Supreme Court after noting paras 77, 77.1 to 77.3 concluded as follows: it needs hardly any elaboration that financial proposal in the resolution plan forms the core of the business decision of committee of Creditors. Once it is found that all the mandatory requirements have been duly complied with and taken care of, the process of Judicial review cannot be stretched to carry out quantitative analysis qua a particular creditor or any stakeholder, who may carry his own dissatisfaction. In other words, in the scheme of IBC, every dissatisfaction does not partake the character of a legal grievance and cannot be taken up as a ground or appeal. 30. The Hon ble Apex Court also consider the judgment in Maharashtra Seamless Ltd. Vs. Padmanabhan Venkatesh Ors. finally concluded based on Jaypee Kensington Boulevard Apartments Welfare Association Ors. Vs. NBCC (India) Limited and Others and other judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly structured on specified grounds, and strictly restricted thereto and appellate authority cannot exercise jurisdiction beyond what is expressly conferred by S. 61(3) Courts, Tribunals and Judiciary Tribunals Jurisdiction of statutory tribunals Scope and extent of - Strictly governed by the statutory framework. 32. In another judgment of this Court this Tribunal in Damodar Valley Corporation Vs. Kharkia Steels Pvt. Ltd. and Another, this Tribunal held that the NCLT does not hold equity-based jurisdiction and any distribution which is in accordance with Section 30(2)(b) of IBC is considered fair and equitable and accordingly the approved resolution plan is not interfered by this Tribunal. Therefore, viewed from any angle, keeping in view in the judgment of Pratap Technocrats Private Limited Ors. Vs. Monitoring Committee of Reliance Infratel Limited Anr. and Damodar Valley Corporation Vs. Kharkia Steels Pvt. Ltd. referred above, it is clear that the discrimination among class of creditors vitiates the Resolution plan. The Appellant being an Operational Creditor if discriminated from the other Operational Creditor, it is a ground to set aside, but here Appellant, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of IBC or any other law which would fall within Section 31(3) of IBC. 34. In view of the settled law referred above the ground of discrimination does not stand to any scrutiny therefore, we find no ground to interfere with the order, in view of the law laid down by the Apex Court. Accordingly, the point is answered against in Appellant and in favour of respondents. Point No. 2 35. One of the contentions of the Appellant is that the Appellant was not a member of CoC, no opportunity was given to participate in CoC meeting, thereby, the decision taken by CoC is not binding upon it. This contention is without any merit for the reason that the Appellant being an Operational Creditor is not entitled to claim a notice, whose debt is less than 10% of the total debt in terms of Section 24(3)(c) of IBC. Section 24 deals with meeting of the CoC. Section 24(3) mandates that the Resolution Professional shall give notice of each meeting of the Committee of Creditors. Clause (c) deals with Operational Creditors or their representatives if the amount of their aggregate dues is not less than ten percent of the debt, a notice shall be issued. But the in the present facts the debt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er all consideration of material on record, the resolution plan was approved by CoC strictly in compliance of the procedure prescribed under the Code and Regulations framed thereunder. 38. The power of this Tribunal under Section 61 to set aside the approved resolution plan is limited. Section 61(3) says that an Appeal against an order approving a resolution plan under Section 31 may be filed on the following grounds: (i) the approved resolution plan is in contravention of the provisions of any law for the time being in force; (ii) there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period; (iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the Board; (iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or (v) the resolution plan does not comply with any other criteria specified by the Board. 39. In the present facts of the case, except the alleged violation referred in the earlier paras, nothing is brought on r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
