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TMI Blog2024 (1) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... y be given to submit the resolution plan to maximise the value of Corporate Debtor asset. However, this opportunity will be subject to compliance with the provisions contained in Regulation 39(1-B) read with Regulation 36-B(7) IBBI (CIRP) Regulations, 2016. In the first case, even though opportunity was given to M/s SEAHAWK, it is confirmed by the RP that the resolution plan was not submitted. The claim of SRA viz. SEPOL that this resolution plan was rejected by the RP/COC on the same ground that it is not in compliance with the provisions contained in Regulation 39(1-B) read with Regulation 36-B(7) IBBI (CIRP) Regulations, 2016 and now in the case of JPL they have changed their stand and recommending for resolution plan to be considered. The Regulations do not permit the proposals to be entertained which are not there in the final list of the PRAs and the Adjudicating Authority has acted as per this provisions. If unsolicited plans are obtained at any stage it will cause unnecessary avoidable delay in the CIRP process. If resolution plans are allowed to be submitted at any stage, it will make the whole CIRP process unending. To curtail the delay in the CIRP process, it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject to compliance of the provisions contained in Regulations 39(1-B) read with 36B(7) of the IBBI (CIRP) Regulations, 2016. 3. This matter was heard on various dates on 06.09.2023, 21.09.2023, 05.10.2023 and on 20.10.2023 after hearing at length, the orders were reserved. To seek some clarifications, the matter was again posted for seeking clarification on 04.01.2024 and the orders were reserved. Apart from hearing the all the counsels we perused all the documents including written statements submitted by Appellant- JPL, the resolution professional, CoC and also the final PRA- SEAPOL. 4. By the Impugned Orders, the Adjudicating Authority has disallowed JPL from submitting a resolution plan for the Corporate Debtor, on account of the statutory bar under Regulation 39(1-B) read with Regulation 36-B(7) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process of Corporate Persons) Regulations, 2016 ( CIRP Regulations ), as per which a resolution plan for a Corporate Debtor cannot be received from a person, who does not appear in the final list of prospective resolution applicants published by a resolution professional under Regulation 36-A(12) of the CIRP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Plan, submitted by the Proposed Resolution Applicant before the CoC and further, COC is directed to consider the Resolution Plan which is submitted by the Applicant as per Law. Accordingly, IA No. 3593 of 2022 is allowed and disposed of. [emphasis supplied] 5.7 Accordingly, M/s SEAHAWK was given an opportunity to submit a resolution plan for the Corporate Debtor. Even though, M/s SEAHAWK was given an opportunity to submit a resolution plan, it did not submit any resolution plan for the Corporate Debtor. In the clarificatory hearing on 04.01.2024, RP further reiterated that till date the RP has not received any resolution plan by M/s SEAHAWK and no such resolution plan was placed before the CoC for consideration or approval. Further RP submits that M/s M/s SEAPOL is just an intervenor and his claim that CoC rejected the resolution plan submitted by M/s SEAHAWK due to the fact that it was in contravention and in violation of Regulation 39(1-B) and Regulation 36-B(7) of the CIRP Regulations is factually incorrect and without any basis. He further submits that the intervenor is merely a prospective resolution applicant, who is not privy to the discussions i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of Corporate Debtor s assets However, this opportunity shall be subject to compliance with the provisions contained in Regulation 39(1)(b) r/w 36B(7) of CIRP Regulations, which stipulates that such Applicant should be one of Resolution Applicants in the final list of prospective Resolution Applicants and the RP will extend the time line for submission of Resolution Plan after approval of CoC . (Emphasis Supplied) 5.11 Appellant has also challenged the above Order dated 27.07.2023 passed in I.A. No. 3223 of 2023. 5.12 Even though the Adjudicating Authority had allowed to submit a resolution plan for the Corporate Debtor, but it was subject to compliance with Regulation 39(1-B) read with Regulation 36-B(7), which stipulates that Appellant should be in the final list of the PRAs. Resolution Professional (RP) seeking clarification from AA 5.13 Since there was contradiction in the 27th July order, i.e. on one hand, it allowed submission of resolution plan by JPL for maximisation of the value of the assets of the Corporate Debtor as per preamble of the code, yet on the other hand sought compliance of Regulation 39(1-B) and Regulation 36-B(7) of the CIRP Regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited (JPL) 6. The Appellant has challenged both orders of the Adjudicating Authority of 27th July 2023 in I.A. No. 3223 of 2023 and also of 22.08.2023 in I.A. No.3699 of 2023. 7. The main ground of JPL is that by accepting the resolution plan it will maximise the value of the assets of the Corporate Debtor, which is in line with the primary objective of the Insolvency and Bankruptcy Code, 2023 ( Code ). The order dated 22.08.2023 of the Adjudicating Authority is contrary to the preamble and to the objective of the Code, which is to maximise the value of the assets of the corporate debtor. It also raises the issue that due to change in economic conditions since 31.10.2022, there may be now more participants, who could be interested in participating in the CIRP, including the Appellant which would help in maximising the value of the Corporate Debtor. It also raises the issue that the Adjudicating Authority, vide its order dated 29.11.2022, had allowed M/s SEAHAWK to submit its resolution plan even though it was not in the final list of the PRAs. Further, M/s SEAPOL had initially missed the prescribed period to submit its resolution plan, which was later allowed with the perm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The aforesaid legal position has been eloquently elucidated in several judgments of the Hon'ble Supreme Court; and in this regard, it would be apposite to refer to a judgment rendered by a learned 3 Judge bench of the Honourable Supreme Court in the matter of Phoenix ARC (P) Ltd. v. Spade Financial Services Ltd., reported in (2021) 3 SCC 475. 11. It further submits that at present the only resolution plan, that is pending consideration before the Committee of Creditors is the plan submitted by SEAPOL. It is pertinent to state that consideration of an additional plan would be in the interest of value maximisation and would afford the Committee of Creditors to choose between the plan that betters subserves the primary consideration of value maximisation of the assets of the corporate debtor. Case of Resolution Professional (RP) 12. The RP in its submissions states as under: ..a) As on date there is only one resolution plan i.e., the resolution plan submitted by M/s SEAPOL which is under consideration with the CoC. M/s SEAPOL was one of the PRAs in the Final List of PRAs had been given the liberty to file its resolution plan after expiry of relevant timeline ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the final list and was allowed to submit resolution plan vide its order dated 29.11.2022 of Adjudicating Authority. CoC considered the resolution plan, as submitted by M/s SEAHAWK and rejected due to the fact that it was in contravention and in violation of the Regulation 39(1-B) read with Regulation 36B(7) with the CIRP Regulations. 14. M/s SEAPOL Ports Pvt. Ltd., also submits that it is the sole resolution applicant, whose name was included in the final list of prospective resolution applicants, issued by the resolution professional on 31.10.2020 and in view of the Regulation 39(1-B) of CIRP Regulations, the CoC is incumbent not to consider the resolution plan of any person, who does not appear in the final list of PRAs. 15. Since the Adjudicating Authority vide its order dated 22.08.2023 in IA No. 3699 of 2023 has held Jindal Power Limited as ineligible for submitting the resolution plan, therefore the CoC is bound to consider the resolution plan filed by M/s SEAPOL, as its name is reflecting in the final list of PRAs. M/s SEAPOL Pvt. Ltd. also submits that in pursuance to the order dated 09.01.2023 of the Adjudicating Authority, it had submitted its resolution plan wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the time as specified by the CoC, from a person who does not appear in the final list of PRAs. 20. Further M/s SEAPOL submits that the judgment titled Vistra Ltd. ITCL (India) Ltd. vs. Torrent Investments Pvt. Ltd. Ors. CA(AT) (Insolvency) No.132, 133 134 of 2023 passed by the Hon ble NCLAT, New Delhi, being referred by the Appellants counsel during the argument is not relevant in the present matter as the said judgment deals with Regulation 39(1-A)(b) of CIRP Regulations. 21. M/s SEAPOL also submits that the earlier proposals of M/s SEAHAWK which was allowed to be considered by the Adjudicating Authority was to consider the proposal as per the law. Accordingly, CoC rejected the resolution plan submitted by M/s SEAHAWK due to the fact that it was in contravention and in violation of Regulation 39(1-B) read with Regulation 36B(7) of the CIRP Regulations. However, in the present appeal the CoC is taking a contrary stand by stating that CoC is willing to explore other bidders outside the final list of PRAs in order to maximise the value of asset of Corporate Debtor which is not permissible under the Code and Regulations framed there under. 22. M/s SEAPOL further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the first case of M/s SEAHAWK, the order clearly states that the CoC is directed to consider the resolution plan, which is submitted by the Applicant as per law in its order in I.A. No. 3593 of 2022 and subsequently when Jindal Power Limited approached the Adjudicating Authority in I.A No. 3223 of 2023, it again acknowledged that an opportunity be given to submit the resolution plan to maximise the value of Corporate Debtor asset. However, this opportunity will be subject to compliance with the provisions contained in Regulation 39(1-B) read with Regulation 36-B(7) IBBI (CIRP) Regulations, 2016. In the first case, even though opportunity was given to M/s SEAHAWK, it is confirmed by the RP that the resolution plan was not submitted. The claim of SRA viz. SEPOL that this resolution plan was rejected by the RP/COC on the same ground that it is not in compliance with the provisions contained in Regulation 39(1-B) read with Regulation 36-B(7) IBBI (CIRP) Regulations, 2016 and now in the case of JPL they have changed their stand and recommending for resolution plan to be considered. We are not adjudicating on the issue of submission or non-submission of the resolution plan, but on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 in which it clarified as follows : The order dated 27.07.2023 was consciously passed limiting ourselves not indulging into the commercial wisdom of the CoC with rider subject to compliance of provisions contained in Regulation 39(1B) r/w 36B(7) of the CIRP Regulations. Therefore, there is a statutory bar on submission of resolution plan apart from the final list of PRAs, which cannot be circumvent at this juncture. (Emphasis Supplied) 29. Thus, by the clarificatory order the adjudicating Authority has disallowed the Appellant to submit a resolution plan for the Corporate Debtor. 30. The justification of the Appellant, and supported by RP/CoC, that by accepting its resolution plan, it maximises the value of the assets of the Corporate Debtor and it is in alignment of the primary objective of the Insolvency and Bankruptcy Code, 2023 ( Code ), cannot be accepted by giving a go by to the Code and particularly Regulations. Firstly, both AA and the Appellate Authority are bound by the Code and Regulations. Secondly, the Apex Court s judgement relied upon by the Appellant of Kalpraj Dharamshi Vs. Kotak Investment Advisors Ltd. reported in (2021) 10 SCC 401 may not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Regulation 36B(7) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process of Corporate Persons) Regulations, 2016. 34. The judgement of this Tribunal in Ramneek Goel Vs. Sunil Bajab Ors. reported in 2023 SCC OnLine NCLAT 515 is also referred to by the Appellant, with relevant paragraphs as follows: ..13. There can be no dispute to the law laid down by the Hon ble Supreme Court that 330 days is the maximum period provided by the Code for the completion of CIRP. The present is a case where 300 days were expiring on 15.04.2021 and prior to expiry of the 300 days period, a decision was taken to re-publish Form-G. The CoC has reason to take a decision since they received an email from Respondent No.1 offering higher value. The objective of the IBC is to maximize the value of the Corporate Debtor and decision taken by the CoC to republish Form-G cannot be faulted in the facts of the present case This would also be not helpful for the Appellant as RP/COC may take it up with the AA once they dispose of the SRA, which is with them and decide as per Regulations and the Code for either accepting it or go back to the stage of re-issuance of EO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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