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TMI Blog2022 (11) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... Meeting shows that even the Secured Financial Creditors accepted that 100% payment should be made to the Farmers who are the backbone of the Sugar Industry. There is no evidence on record to substantiate that indeed the Applicants seeking to intervene had formed a group and given the representation to the RP at the appropriate time to consider them as one class. Their Claims were filed in an individual capacity and there is no Application on record seeking to treat all of them in one group, at that point of time and therefore their contention that they were not included in the Meeting of the CoC, is untenable. This Tribunal is of the considered opinion that there is no embargo for the classification of the Operational Creditors into separate/different classes for deciding the way in which the money is to be distributed to them by the CoCs. The Plan was approved by 100% Voting Share way back on 11.11.2019 almost three years ago and has also been implemented. This Tribunal is of the considered opinion that the Operational Creditors were paid as per Section 30(2)(b) of the Code and read together with Regulation 38 of the CIRP Regulations, the Operational Creditors are en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregate amount of the Operational Debt from Operational Creditors other than Employees, Workmen and Farmers is Rs.63,45,09,539/- as against the total debt of Rs.193,58,53,515/- which is 32.78% of the total debt. It is argued that the share of Operational Creditors other than Workmen, Employees and Farmers being 32.78% of the total debt, no notices of the Meeting of the CoC was ever given to the Appellants and other Operational Creditors thereby denying them an opportunity to participate in the Meetings; that no copy of the Resolution Plan, Valuation Report or the Information Memorandum has ever been furnished to the Operational Creditors that the fair Liquidation Value of the Corporate Debtor is not the correct value; that the Resolution Plan approved by the Adjudicating Authority vide Order dated 11.11.2019 is discriminatory in nature as 54.29% of the admitted Claim is to be distributed to Secured Financial Creditors , 11.42% of the admitted Claim to Unsecured Financial Creditors , 20% to Workmen and Employees, 100% to Farmers as against mere 1% of the total admitted Claim of the Appellants, which is unfair discriminatory and illegal; that Farmers do not form a cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Code and the Regulation therein cannot be questioned as laid down by the Hon ble Apex Court in Committee of Creditors of Essar Steel India Ltd. (Supra). 6. It is submitted that the Resolution Plan was unanimously approved by 100% vote of the Members of the CoC. Learned Sr. Counsel for the second Respondent placed reliance on paras 38, 39, 44 45 of K. Sashidhar Vs. Indian Overseas Bank Ors. (2019) 12 SCC 150, paras 54, 70 97 of Committee of Creditors of Essar Steel India Ltd. (Supra), and paras 21-24 29 of Maharashtra Seamless Limited Vs. Padmanabhan Venkatesh Ors. (2020) 11 SCC 467, in support of their argument that the Commercial Wisdom of the CoC is non-justiciable. 7. It is further submitted that the Appellant s Claim in respect of the total debt constitutes only 8 to 9% and that at no point of time were any payments made for invitation to the Meetings. In fact, RP had received their Claims as early as February and March, 2019 but never approached the RP as a group or as a consortium. The Claims were filed in the individual capacity. Even after filing of the Claims no Application was made to the RP that they should be treated as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The principle in Amit Goel (Supra), is with respect to discrimination in the Resolution Plan between two classes of Creditors, who are similarly placed. In the instant case, we are of the earnest view that the Farmers who form the main backbone of the Sugar Industry cannot be said to be on an equal footing with respect to the Appellants specifically having regard to the fact that the Corporate Debtor is an agriculturally dependent industry. 10. Bank of Maharashtra (Supra), which was relied upon by the Learned Counsel for the Appellant is also not applicable to the facts of this case as the finding in that matter was that Section 30(2)(b) of the Code has not been adhered to as approval of the CCI was not taken prior to the approval of the Resolution Plan. Once again, the facts in the instant case are unrelated. The Appellants ought to have been more vigilant in pursuing their rights at the right this as stipulated under the Code. 11. Hence, the contention of the Appellants that the Adjudicating Authority has erroneously dismissed their Application without going into the merits, cannot be sustained as the Adjudicating Authority has recorded in the Order dated 04.11.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted to them by the CoCs. We are of the view that the Operational Creditors were paid as per Section 30(2)(b) of the Code coupled with Regulation 38 of the Corporate Insolvency Process Regulations as the Operational Creditors are entitled to receive only such money that are payable to them as under Section 53 of the Code. 16. We are conscious of the fact that we have a limited judicial review lying with in the four corners of Section 30(2) of the Code and the material on record does not show that the Plan was lacking any equitable perception with respect to any criterion as envisaged under the Code. We place reliance on the decision of the Hon ble Supreme Court in Kalpraj Dharamshi Anr. Vs. Kotak Investment Advisors Ltd. Anr. 2021 SCC OnLine SC 204 , the Hon ble Apex Court has observed as follows: 146. The view taken in the case of K. Sashidhar (supra) and Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra) has been reiterated by another three Judges Bench of this Court in the case of Maharashtra Seamless Limited (supra). 147. In all the aforesaid three judgments of this Court, the scope of jurisdiction of the Adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148. It has been held, that in an enquiry Under Section 31, the limited enquiry that the Adjudicating Authority is permitted is, as to whether the resolution plan provides: (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) the plan does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. 149. It will be further relevant to refer to the following observations of this Court in K. Sashidhar (supra): 57. ...Indubitably, the remedy of appeal including the width of jurisdiction of the appellate authority and the grounds of appeal, is a creature of statute. The provisions investing jurisdiction and authority in NCLT or NCLAT as noticed earlier, have not made the commercial decision exercised by CoC of not approving the resolution plan or rejecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 32 read with Section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar. 153. It can thus be seen, that this Court has clarified, that the limited judicial review, which is available, can in no circumstance trespass upon a business decision arrived at by the majority of CoC. 154. In the case of Maharashtra Seamless Limited (supra), NCLT had approved the plan of Appellant therein with regard to CIRP of United Seamless Tubulaar (P) Ltd. In appeal, NCLAT directed, that the Appellant therein should increase upfront payment to Rs. 597.54 crore to the financial creditors , operational creditors and other creditors by paying an additional amount of Rs. 120.54 crore. NCLAT further directed, that in the event the resolution applicant failed to undertake the payment of additional amount of Rs. 120.54 crore in addition to Rs. 477 crore and deposit the said amount in escrow account within 30 days, the order of approval of the 'resolution plan' was to be treated to be set aside. While allowing the appeal and setting aside the directions of NCLAT, this Court observed thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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