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TMI Blog2023 (7) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... at The above scheme of the Code also indicates that after Resolution Plan is submitted to the Adjudicating Authority and it is approved by the Adjudicating Authority, it no longer remains a confidential document, so as to preclude Regulator and other persons from access the said document. In the case of Vijay Kumar Jain, it has also held that Last but not least, a resolution plan which has been approved or rejected by an order of the Adjudicating Authority, has to be sent to participants which would include members of the erstwhile Board of Directors vide Regulation 39(5) of the CIRP Regulations. Obviously, such copy can only be sent to participants because they are vitally interested in the outcome of such resolution plan, and may, as persons aggrieved, file an appeal from the Adjudicating Authority s order to the Appellate Tribunal under Section 61 of the Code. Quite apart from this, Section 60(5)(c) is also very wide, and a member of the erstwhile Board of Directors also has an independent right to approach the Adjudicating Authority, which must then hear such person before it is satisfied that such resolution plan can pass muster under Section 31 of the Code. None ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopers Pvt. Ltd. In the said application, the present Appellant filed the application in question, bearing INVP-05/2021, in which the aforesaid two prayers have been made. The Application for intervention as well as supply of the Resolution Plan during the pendency of the approval of the Resolution Plan by the Adjudicating Authority has been declined on the ground that considering the fact that the applicant has not submitted any claim before RP, we are of the considered view that the Applicant has no locus standi. Simply on the ground that there is litigation between the applicant and Suspended board of Directors of the Corporate Debtor, we are not inclined to permit the applicant to intervene and direct the RP to serve a copy of the Resolution Plan. Accordingly, we hereby reject the prayer of the Appellant. 3. Counsel for Appellant has argued that the Appellant has an interest in the shareholding of the Corporate Debtor by virtue of Agreement dated 08.10.2018, therefore, the Appellant is entitled to a copy of the Resolution Plan. In this regard, reliance has been placed upon a decision of this Tribunal, rendered in the case of Association of aggrieved workmen of Jet Airwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate debtor etc. All this has nothing to do with Section 24 of the Code which deals with meetings of the committee of creditors. Secondly, the resolution professional does not prepare a resolution plan as is mentioned in the Notes on Clause 24; he only prepares an information memorandum which is to be given to the resolution applicants who then submit their resolution plans under Section 30 of the Code. The committee of creditors, in turn, gets information so that they can assess the financial position of the corporate debtor from various sources before they meet. It is, therefore, difficult to understand the Notes on Clause 24. Even assuming that the Notes on Clause 24 may be read as being a one-way street by which erstwhile members of the Board of Directors are only to provide information, we find that Section 31(1) of the Code would make it clear that such members of the erstwhile Board of Directors, who are often guarantors, are vitally interested in a resolution plan as such resolution plan then binds them. Such plan may scale down the debt of the principal debtor, resulting in scaling down the debt of the guarantor as well, or it may not. The resolution plan may also scal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution plan can pass muster under Section 31 of the Code. 5. However, during the course of hearing, on our pointed question as to whether there is any provision, either in the Code or the Regulations, to provide a copy of the Resolution Plan during the pendency of the approval of the Resolution Plan by the Adjudicating Authority. Counsel for Appellant has categorically submitted that there is no such provision to his knowledge and has solely relied upon the aforesaid two decisions of this Tribunal as well as decision of Hon ble Supreme Court. 6. On the other hand, Counsel for Resolution Professional has refereed to Section 3(6)(b), Section 24(3) Section 30(3) of the Code and Regulation 2(1)(L), Regulation 39(2) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. All the aforesaid Sections and Regulations are reproduced hereunder: Section 3(6)(b)- (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured Section 24 (1) The members of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal shall submit to the committee all resolution plans which comply with the requirements of the Code and regulations made thereunder along with the details of following transactions, if any, observed, found or determined by him:- (a) preferential transactions under section 43; (b) undervalued transactions under section 45; (c) extortionate credit transactions under section 50; and (d) fraudulent transactions under section 66, and the orders, if any, of the adjudicating authority in respect of such transactions. 7. Firstly, it is contended that the Appellant is neither a Claimant nor a Creditor or a participant, therefore, cannot be supplied the copy of the Resolution Plan. 8. Secondly, it is argued that the judgments relied upon by the Appellant in case of Association of Jet Airways (Supra) and Vijay Kumar Jain (supra) are both on different issues decided by the Hon ble Courts. In this regard, he has referred to the decision in the case of Association of Jet Airways (Supra) in which the question was as to whether the Appellant/Applicant is entitled to be give a copy of Resolution Plan or any part of the Resolution Plan in the appeal or not. In the said judgment, it was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form of a non-disclosure agreement in which the resolution professional can be indemnified in case information is not kept strictly confidential. 16. The argument on behalf of the committee of creditors based on the proviso to Section 21(2) is also misconceived. The proviso to Section 21(2) clarifies that a director who is also a financial creditor who is a related party of the corporate debtor shall not have any right of representation, participation, or voting in a meeting of the committee of creditors. Directors, simplicitor, are not the subject matter of the proviso to Section 21(2), but only directors who are related parties of the corporate debtor. It is only such persons who do not have any right of representation, participation, or voting in a meeting of the committee of creditors. Therefore, the contention that a director simplicitor would have the right to get documents as against a director who is a financial creditor is not an argument that is based on the proviso to Section 21(2), correctly read, as it refers only to a financial creditor who is a related party of the corporate debtor. For this reason, this argument also must be rejected. 18. We may indicate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idential document and cannot be disclosed to a claimant. In the case of Vijay Kumar Jain (Supra), it has also held that Last but not least, a resolution plan which has been approved or rejected by an order of the Adjudicating Authority, has to be sent to participants which would include members of the erstwhile Board of Directors vide Regulation 39(5) of the CIRP Regulations. Obviously, such copy can only be sent to participants because they are vitally interested in the outcome of such resolution plan, and may, as persons aggrieved, file an appeal from the Adjudicating Authority s order to the Appellate Tribunal under Section 61 of the Code. Quite apart from this, Section 60(5)(c) is also very wide, and a member of the erstwhile Board of Directors also has an independent right to approach the Adjudicating Authority, which must then hear such person before it is satisfied that such resolution plan can pass muster under Section 31 of the Code. 13. None of the judgments, cited at the instance of the Appellant, either of this Tribunal or the Hon ble Supreme Court has held that the copy of the Resolution Plan, which is still in the process of approval or rejection by the Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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