9911796707
TMI Blog2024 (2) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... equent decision of the Adjudicating Authority on 08.02.2023 to recall its order of 16.01.2023 was set aside by this Tribunal. This Tribunal on 25.04.2023 taking note of the fact that Resolution Plan of the Appellant was already submitted and the majority member of the CoC holding 86% share had expressed its no objection to consider the same, allowed consideration of the Resolution Plan of the Appellant. The decision of the CoC not to issue fresh Form-G has been also canvassed by the Learned Counsels of the Appellant, RP and Union Bank of India. It has been contended by them that fresh publication of Form-G would run counter to the stringent time lines prescribed by the IBC for completion of the CIRP process - when a resolution plan has already been received by the CoC and the CoC in the exercise of its commercial wisdom has decided to only consider this plan, allowing other potential resolution applicants by the Adjudicating Authority to paradrop afresh at this stage when CIRP period is over and that too contrary to the deliberations of the CoC cannot be countenanced. Ultimately it is the commercial wisdom of the CoC which operates to approve what is to be the best resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occasions seeking EOIs for submission of Resolution Plans. The CoC was constituted with Union Bank of India (84.90%), Axis Bank (6.48%), ICICI Bank (6.18%) and Yes Bank (2.44%). Three Resolution Plans were received. However, as none of these plans were approved by the CoC in its 20th and 21st meetings, the RP filed I.A. No. 3199 of 2022 seeking liquidation of the Corporate Debtor. While the I.A. No. 3199 of 2022 was pending before the Adjudicating Authority, the present Appellant sent an EOI to the RP on 09.01.2023 to allow submission of Resolution Plan. The Appellant was informed by the RP that CIRP period had ended on 18.06.2022 and that liquidation of the Corporate Debtor was pending consideration of the Adjudicating Authority. The Appellant filed I.A. No. 228 of 2023 before the Adjudicating Authority seeking permission to submit Resolution Plan. The Adjudicating Authority allowed the Appellant to submit Resolution Plan vide its order dated 16.01.2023. The Appellant submitted the Resolution Plan before the RP on 30.01.2023. On 04.02.2023, the RP had filed I.A. No. 886 of 2023 seeking rectification of the order dated 16.01.2023 of the Adjudicating Authority pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal s orders, the Resolution Plan of the Appellant was deliberated at length in the 23rd CoC meeting held on 12.05.2023. The CoC in the said meeting decided to only consider the Resolution Plan of the Appellant. The CoC members in the said meeting had also considered the issuance of fresh Form-G and took a conscious decision not to consider any other Resolution Plan. The same meeting also decided to pass a resolution seeking extension of CIRP period by 60 days to enable consideration and voting on the plan submitted by the Appellant. It was asserted that this decision of the CoC was taken with 97.56% vote share and was in exercise of commercial wisdom of the CoC. 4. It was further added that the CoC in its 26th meeting held on 23.08.2023 again deliberated on the issue of fresh Form-G and rejected this proposition on the ground of being a time-consuming exercise. The CoC also concluded that the Resolution Plan of the Appellant was of a higher value in comparison to the plan submitted by earlier resolution applicants and hence decided to vote only on the Resolution Plan of the Appellant. 5. The Learned Sr. Counsel for the Appellant emphatically submitted that the CoC in its 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CoC members in the 26th meeting and after due deliberations, the CoC in the exercise of its commercial wisdom, decided not to publish any fresh Form-G. It was added that the minutes of the CoC meetings clearly makes a note that issue a fresh Form-G would be a time-consuming process and hence was not recommended. The CoC had also noted that the resolution plan value of the Appellant was better than the values offered by the erstwhile potential resolution applicants. 9. Echoing similar viewpoint, it was submitted by the Learned Counsel for the Union Bank of India/Respondent No. 2, being the majority vote share holder in the CoC, that it had been decided by the CoC in their 20th and 21st meetings to reject all 3 resolution plans received from resolution applicants as they were offering less than the liquidation value of the Corporate Debtor and to go ahead with liquidation of the Corporate Debtor. Even at the later stage, when the CoC in compliance to the directions of the Adjudicating Authority and this Tribunal chose to deliberate on the Resolution Plan of the Appellant, it had compared the enhanced value offered by them in comparison to the erstwhile resolution applicants and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment made by the Learned Counsel for the parties, we are of the view that plan having already been submitted there was no occasion for recall of the order 16.01.2023, moreover, only prayer made was to make certain corrections in the order dated 16.01.2023. The order dated 08.02.2023 in so far as it recall the order dated 16.01.2023 is set aside. The Appeal is disposed of. ( Emphasis supplied ) The above order therefore allowed consideration of the Resolution Plan of the Appellant which had already been submitted by the Appellant on 30.01.2023. It is also noticed that the majority share-holder in the CoC with 86% vote share had no objection to the consideration of the plan. 13. Thereafter, the Resolution Plan submitted by the Appellant was placed before the 23rd CoC meeting. The summary of the cured plan of the Appellant was shared with the CoC and thereafter the same was discussed by the CoC in the said meeting following which the Appellant was further asked to increase the plan value and offer the best possible plan as may be seen at Item No. 07 of the 23rd meeting of the CoC as placed at pages 86-87 of the Appeal Paper Book ( APB in short). 14. The CoC membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ajay Nagpal is to be considered by CoC. The Chairman apprised the need to apply for extension of CIRP period and seeking exclusion of period lost in litigation. After discussion and deliberations, following resolution was proposed to be passed for approval by physical vote at the meeting: Proposed Resolution RESOLVED THAT the approval of the CoC be and is hereby accorded for seeking extension of CIRP period by another 60 days for consideration and voting on the plan submitted by PRA Mr. Jatindra Pal Singh Hanjra, through Authorised Representative, Mr. Ajay Nagpal. RESOLVED FURTHER THAT the approval of the CoC be and is hereby accorded for filing suitable application before Hon ble NCLT seeking exclusion of time lost in litigation i.e. from date of filing of liquidation application till date on which further extension of 60 days is granted by Hon ble NCLT. RESOLVED FURTHER THAT Resolution Professional and is hereby authorised to file suitable application before Hon ble NCLT to give effect to above stated resolution. ( Emphasis supplied ) It is pertinent to note that the aforesaid resolution was approved by the CoC by 97.56% voting. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vickey Gupta Pankaj Saraogi and Ranjana Saraogi Jatinder P. Hanjra Original Revised Secured FC (in Rs. Crore) 7.00 10.55 14.15 18.10 19.00 Unsecured FC (in Rs. Crore) 0.00 0.40 0.30 0.30 0.25 Operational Creditor (in Rs. Crore) 0.00 0.10 0.10 0.10 0.25 Plan Value (in Rs. Crore)* 7.00 11.05 14.55 18.50 19.50 Term of the plan 12 months 12 months 9 months 6 months 3 months *CIRP cost as per actual in all plans While the initial value proposed by the HI in the plans received by the CoC pursuant to form G dated 06.11.2022 was Rs. 14.55 Cr., Mr. Hanj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26th CoC meeting, the I.A. No 3016/2023 was disposed of by the Adjudicating Authority on 30.11.2023 by extending the CIRP period by 60 days. Vide this impugned order, in the interest of justice and maximization of the value of the Corporate Debtor , it directed the RP to invite fresh EOI through wider publication of Form-G to enable any prospective resolution applicant to participate in the resolution process. It also directed that the completion of the process within 60 days extended period. 19. Given the facts and circumstances of the present case as narrated above, we find that despite lapse of four years, no resolution had fructified so far. Inspite of issue of Form G on five occasions, no viable resolution plans had cropped up compelling the CoC to recommend liquidation of the Corporate Debtor. However, on an application filed by the Appellant seeking consideration of their Resolution Plan, the Adjudicating Authority taking note that the object of the IBC is to rescue the Corporate Debtor in distress allowed the consideration of the Resolution Plan of the Appellant on 16.01.2023. The subsequent decision of the Adjudicating Authority on 08.02.2023 to recall its order of 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto. ( Emphasis supplied ) The same aspirations resonate in the Statement of Objects and Reasons of this legislative enactment. The mandate and objective of the IBC clearly emphasizes reorganization and insolvency resolution of corporate debtor in a time bound manner for maximization of the value of the assets. Speed is the essence of IBC. The maximization of the value of the Corporate Debtor is also admittedly an object of the CIRP. However, the said maximization has to be achieved within the timeline provided in the scheme. Needless to add, there has to be a respectful balance and harmony between the twin objectives of timely resolution and asset maximization. The CoC members took cognizance of the fact that CIRP period of 330 days stood expired and now that a resolution plan has come up seeking to provide substantially much more than the liquidation value, it decided to consider o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion of the stated processes within the timelines prescribed by the I B Code. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their them of experts. The opinion on the subject-matter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable. 25. We may also notice a judgment of the Hon ble Supreme Court in Civil Appeal Nos. 3665-3666 of 2020 in the matter of Ngaitlang Dhar vs. Panna Pragati Infrastructure Private Limited Ors. where in para 31, the following has been held:- 31. It is trite law that commercial wisdom of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the processes within the timelines ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
