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TMI Blog2024 (7) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants, i.e. Shareholder/ Promoter and Suspended Director of the Corporate Debtor, challenging orders dated 26.04.2023 passed by National Company Law Tribunal, Mumbai Bench, Court-II. 2. Company Appeal (AT) (Insolvency) No. 1127 of 2024 has been filed challenging order dated 26.04.2024 passed in IA No.111 of 2024 and part of order dated 26.04.2024 passed in IA No.5606 of 2023 (paragraph 21 and first line of paragraph 22). Company Appeal (AT) (Insolvency) No. 1129 of 2024 has been filed challenging the order dated 26.04.2024 passed by Adjudicating Authority in IA No.2830 of 2023 filed by Resolution Professional ("RP"), by which order the Adjudicating Authority approved the Resolution Plan in the Corporate Insolvency Resolution Process ("CIRP") of the Corporate Debtor. Aggrieved by the aforesaid orders, the Appellants have come up in these two Appeal(s). 3. Brief facts necessary to be noticed for deciding these Appeal(s) are: (i) The CIRP against the Corporate Debtor - V Hotels Ltd. commenced by Adjudicating Authority on an Application filed by Asset Reconstruction Company (India) Ltd. ("ARCIL") - the Financial Creditor. (ii) In the CIRP, the RP appointed two registered Valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an IA No.5606 of 2023 praying that Adjudicating Authority may permit the RP to redetermine the claim of the Pegasus in the same line. (vi) In pursuance of the order of this Tribunal dated 21.11.2023, the Successful Resolution Applicant ("SRA") submitted an Addendum to the CoC, as directed by this Tribunal, stating that after redetermination of the claim of ARCIL, there is no change in the financial proposal and the terms of Resolution Plan does not require any change. It was further stated in the Addendum that inter se dispute between SRA and secured Financial Creditor, can be decided by the CoC, which shall be honoured by the SRA. The Addendum dated 09.12.2023 came for consideration before the CoC in 32nd Meeting dated 13.12.2023, which Addendum as approved by the CoC was placed before the Adjudicating Authority for consideration. (vii) The Appellant filed IA No.111 of 2024 challenging the Addendum dated 09.12.2023 as well as Minutes of the CoC held on 13.12.2023, approving the Addendum. The Appellant prayed to set aside the Minutes of the Meeting of the CoC as well as Addendum. The Adjudicating Authority by the order dated 26.04.2024 dismissed IA No.111 of 2024 filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is submitted that Appellants cannot have any complaint with regard to approval of Resolution Plan and approval of Addendum, since they are not going to be affected in any manner. The learned Senior Counsel has referred to the order of Hon'ble Supreme Court dated 10.05.2024, which was passed in the Appeal filed by the Appellant against the order of this Tribunal dated 21.11.2023, where the Hon'ble Supreme Court has clearly held that redetermination of claim shall effect only creditors of the same class. The order of Hon'ble Supreme Court finally settled the issues, which cannot be reopened in this Appeal. 7. We have considered the submissions of learned Counsel for the parties and have perused the records. 8. The issue, which has been sought to be raised in these Appeal(s) is regarding redetermination of claim of Pegasus. We have already noticed above that with regard to the redetermination of the claim of ARCIL, another Financial Creditor, the matter has travelled to this Tribunal in Company Appeal (AT) (Insolvency) Nos.1114-1115 of 2023, which Appeal(s) were filed against the order dated 21.07.2023 passed by Adjudicating Authority, upholding the determination of claim by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lphinstone (West), Mumbai-400 013. Email: [email protected] Dear Sir, Subject: Addendum to the Resolution Plan dated 20th December 2022, as revised on 5th June 2023, approved by the Committee of Creditors of the Corporate Debtor ("COC") on 22nd June 2023 (the "Resolution Plan") and pending approval of Hon'ble National Company Law Tribunal, Mumbai Bench ("NCLT") in I. A. No. 2830 of 2023. This is in furtherance to the liberty granted by the Hon'ble National Company Law Appellate Tribunal in its order dated 21st November 2023 passed in Company Appeal No. 1114- 1115 of 2023 and your email dated 4th December 2023 in furtherance thereto. We note that the claims of the Secured Financial Creditors have been recalculated and the admitted outstanding claim amount is Rs. 1,143,56,33,920/- (Rupees One Thousand One Hundred Forty- Three Crore Fifty-Six Lakh Thirty-Three Thousand Nine Hundred Twenty Only). In terms of the Resolution Plan, the total amount payable to the Secured Financia Creditors is Rs. 888,69,78,878/- (Rupees Eight Hundred Eighty-Eight Crore Sixty Nine Lakhs Seventy Eight Lakhs Eight Hundred and Seventy Eight only) and no change is proposed to this amount, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with the provisions of the Code and the CIRP regulations. In addition to above, legal advisors to the Arcil and Pegasus stated that for the distribution of resolution plan value in terms of approved resolution plan read with the above addendum and other related documents, it is suggested that for the purposes of computation of the distribution ratio for amounts proposed to secured financial creditors, the outstanding amounts of the secured financial creditors to be calculated with 14.85% as the interest rate, compounded with monthly rests and the inter se proportion should be accordingly determined. The Secured financial creditors discussed and were in consensus to determine the distribution ratio in terms of the debt due in terms of the calculations at 14.85% as the interest rate, compounded with monthly rests for Arcil and Pegasus. The Legal Advisor to the RP confirmed that in terms of the NCLAT Order 21st November 2023, the addendum submitted by the SRA allows the CoC to determine the manner of distribution and the distribution mechanism to the secured financial creditors discussed and consented by the financial creditors present in the meeting is to be approved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopers Limited read with addendum dated December 09, 2023 and pursuant to section 30(4) of the Insolvency and Bankruptcy Code, 2016, the committee of creditors of the Corporate Debtor hereby resolves to distribute the amounts proposed for secured financial creditors under the successful resolution plan amongst the secured financial creditors (Arcil and Pegasus respectively) in the proportion of 65.91:34.09." 11. The Resolution was put to e-voting and was approved by 97.34% votes. We do not find any error in the Addendum or the Resolution of the CoC, approving the same. The claim of Pegasus was also redetermined as per agreed rate of interest @ 14.85%. In fact, after the order of this Tribunal dated 21.11.2023 in the Appeal filed challenging the determination of rate of interest of ARCIL, the Pegasus, itself sent an email dated 27.11.2023 to the RP praying that the claim of Pegasus is same as of ARCIL and may be determined accordingly. The Adjudicating Authority in its order dated 26.04.2024 passed in IA No.5606 of 2023 has noticed the said email in paragraph 10 of the judgment. Paragraph 10 and 18, which are relevant are as follows: "10. While the reverification of ARCIL' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Adjudicating Authority vide its order dated 26.04.2024 passed in IA No.5606 of 2023 has, in fact, approved and accepted the prayer of RP for reverification of the claim of the Pegasus. As noted above, in the Meeting of the CoC held on 13.12.2023, reverified claim of Pegasus was placed before the CoC, thus, on the request of Pegasus, the RP has also reverified the claim and placed the same before the CoC. The CoC was, thus, well aware that after reverification of the claim of Pegasus, now it is only Rs.321.51 crores. The CoC took the view that there is no difference in payment proposed to the Financial Creditors, hence, the financials of the Resolution Plan are not to be changed in any manner. 13. We may also notice the order of the Hon'ble Supreme Court dated 10.05.2024 passed in Civil Appeal Nos.1705-1707 of 2024, which was filed by the Appellant, challenging the order dated 21.11.2023 passed by this Tribunal in Appeal. The said Appeal(s) have been disposed of by the Hon'ble Supreme Court. The Hon'ble Supreme Court has clarified that reworking/ verification in terms of the order dated 22.11.2023 may not have any impact on the Resolution Plan or its implementation. It was obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia) Limited. We are informed that the Resolution Plan has already been approved by the Committee of Creditors. We clarify that the re-working/verification in terms of the impugned judgment may not have any impact on the Resolution Plan or its implementation. It may have the effect of re-determination of the amount payable inter-se the similar class of creditors. However, it will be open to the appellants to challenge the approval of the Resolution Plan and raise all other issues before the appropriate authority in accordance with the law. The appeals are disposed of in the above terms. Pending application(s), if any, shall stand disposed of. .." 14. The Hon'ble Supreme Court has also held that re-working/ verification in terms of order dated 23.11.2023 has no effect on the Resolution Plan. The said observation are equally applicable to the reverification by the Pegasus, which was also done and placed before the CoC in its 32nd Meeting. The Appellant, who is shareholder and promoter of the Corporate Debtor and related party, has not been proposed any amount in the Resolution Plan. The submission of the Appellant that redetermination of Pegasus ought to have been compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... role of the NCLT is 'no more and no less'. The Hon'ble Apex further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan 'as approved' by the requisite percent of voting share of financial creditors. Even in that enquiry the grounds on which the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2) when the Resolution Plan does not conform to the stated requirements. The legislature, consciously, has not provided any other ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the Adjudicating Authority. 28. In CoC of Essar Steel India Limited vs. Satish Kumar Gupta and Ors (2020) 8 SCC 531 the Hon'ble Apex Court clearly held that the Adjudicating Authority would not have the power to modify the Resolution Plan which the CoC in their commercial wisdom has approved. In para 42, the Hon'ble Court observed as under : 'Thus, it is clear that the limited judicial review available which can in no circumstances trespass upon a business decision of the majority of the Committee of Credito ..... X X X X Extracts X X X X X X X X Extracts X X X X
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