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TMI Blog2024 (9) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... iated and Resolution Plans are approved, the adjudication of the claim of the creditors could only be in accordance with the IBC. Needless to state that the COC, once constituted in accordance with the IBC, acts on behalf of all the creditors and the taskof the COC is to attain a balance between the twin goals of the CIRP process viz., maximization of the value of the assets of the CD and also a planned course for revival of the CD. These being the twin objectives, the decisions take by the COC, which have been approved by the NCLT are considered to be commercially viable and cannot be condemned on any counts by the petitioner. The effect that a Resolution Plan once approved would bring is to proceed on a clean slate with the successful resolution applicantrather than carrying the cargo of such debts which need to be satisfied to the extent required and then jettisoned, as stated by the Supreme Court in the case of JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE ASSOCIATION ORS. VERSUS NBCC (INDIA) LTD. ORS. [ 2021 (3) TMI 1143 - SUPREME COURT ]. There is no escape from the conclusion that once the Resolution Plan was approved, the assets of the CD in the hand of the Resolution Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rupees Forty Seven Thousand Crores (approximately) payable to the Financial Creditors as well as claims for an amount of Rupees Six Hundred and Twenty Crores (approximately) with respect to the Operational Creditors . It appears that some of the erstwhile directors of the CD had certain grievances to the extent that theyhad not been provided with relevant documents, consequent to which they challenged the CIRP proceedings instituted before the Punjab Haryana High Court bearing CWP No. 10325/2019 (O M), whereby certain directions were given to the learned NCLT to consider the preliminary issues raised by them vide order dated 18.04.2019. Eventually the Resolution Plan submitted by JSW Steel Limited Resolution Applicant was approved by the COC on 16.10.2018 and was submitted by the RP for approval before the Adjudicating Authority i.e., the NCLT in terms of Section 30(6) and 31(1) of the Insolvency and Bankruptcy Code [ IBC ] vide CA No. 254(PB)/2019. The Resolution Plan was approved by the Adjudicating Authority vide judgment dated 05.09.2019 with certain conditions, and insofar as Operational Creditors are concerned, in which category the petitioner was infact bracketed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board of Directors and others shall not effect the JSW-H1 Resolution Plan Applicant or the implementation of the resolution plan by the Monitoring Agency comprising of CoC and RP. We leave it open to the Members of the CoC to file appropriate applications if criminal proceedings result in recovery of money which has been siphoned of or on account of tainted transactions or fabrication as contemplated under the provisions of the Code or any other law. Those applications shall be considered in accordance with the prevalent law. 7. It was vehemently urged that despite such clear directions, the respondents failed to take timely and conscious action for the benefit of all the stakeholders and while the Monitoring Committee of the CD was monitoring the change of management, on 10.10.2019, the Directorate of Enforcement of Central Government [ ED ] entered the arena and attached the assets of the CD, amounting to over Rs. 4000 crores, under Section 5 of the Prevention of Money Laundering Act, 2002 [ PMLA ]. 8. Learned counsel for the petitioner, alluding to Section 8(8) of the PMLA, vehemently urged that the respondents and/or COC in terms of the aforesaid directions contained in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promoters/directors of the CD. It was urged that no direction can be passed against the assets of the CD. On the other hand learned, counsel for the SBI vehemently urged that the issues with regard to whether or not JSW Steel is a related party and whether the Resolution Plan worked out by the COC shall provide no ground for interference by the ED, is pending before the Supreme Court in a bunch of matters. It was vehemently urged that the claims of the petitioner were considered and adjudicated upon, thereby allowing the claim albeit with anecessary haircut. In this regard, a copy of the order dated 18.12.2019 passed by the Supreme Court in SLP No. 29327-29328/2019, titled Committee of Creditors v. Directorate of Enforcement, was shared through video conferencing, whereby there is stay on the order dated 10.10.2019 passed by the Directorate of Enforcement. ANALYSIS AND DECISION: 12. Having heard the learned counsels for the parties present and on perusal of the record, unhesitatingly, this Court finds that the present writ petition is not legally sustainable and deserves to be dismissed. 13. First things first, the plea raised by the learned counsel for the petitioner that even at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Government of India (to States and private sector industries). Consequently, the allocation of Coal Block to RCCPL stood cancelled and the operations of RCCPL have been inactive since the said cancellation. Further, post the cancellation, the Coal Block has been allotted to National Mineral Development Corporation (NMDC). (v) While the operations of RCCPL have been inactivesince the cancelation of the Coal Block, the jointventure has not been dissolved as on date, onaccount of a pending litigation with respect to theCoal Block before the Hon ble Delhi High Court inRohne Coal Co. Ltd. vs Union of India and Ors. WP(C) 11551/2015 and the resolution of issues withrespect to reimbursement of costs incurred byRCCPL for development of the mine until it wascancelled. 14. Further, on a careful perusal of the aforesaid order, it is significant to note that the Resolution Applicant made full and truthful disclosure of its background learned NCLAT at the time of submission of Resolution Plans and it was after a detailed analysis that the learned NCLT arrived at the conclusion that the Resolution Applicant was not falling foul of the bar of Section 29A of the IBC. In this regard, the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. 18. A plain and grammatical interpretation of Section 31 of the IBC, would show that every creditor or stakeholder is bound by the Resolution Plan approved by the NCLT/NCLAT, irrespective of the fact whether they have consented to it or not. Reference in this regard can be made to the decision by the Supreme Court in the case of Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Limited (2023) 10 SCC 545 , wherein it was held as under: 61.11. Section 31 IBC deals with the approval of the resolution plan which shall bind everyone i.e. the corporate debtor, guarantors, creditors, other stakeholders, etc. Thus, whatever amount is allotted to the creditor under the plan, the same will have to be accepted without any option. 61.12. The new avatar of the corporate debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedural step IBC requires sixty-six per cent votes of creditors), but upon its compliance with the procedure stipulated under IBC. 19. That being the proposition of law, the plea that the respondents-banks should have pursued attachment of the properties of the CD merits no consideration. As regards the plea that Section 32A 10[32A. Liability for prior offences, etc.--(1) Notwithstanding anything to the contrary contained in this Code or any other law for the time being in force, the liability of a corporate debtor for an offence committed prior to the commencement of the corporate insolvency resolution process shall cease, and the corporate debtor shall not be prosecuted for such an offence from the date the resolution plan has been approved by the Adjudicating Authority under section 31, if the resolution plan results in the change in the management or control of the corporate debtor to a person who was not-- (a) a promoter or in the management or control of the corporate debtor or a related party of such a person; or (b) a person with regard to whom the relevant investigating authority has, on the basis of material in its possession, reason to believe that he had abetted or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w as may be applicable to the corporate debtor; (ii) nothing in this sub-section shall be construed to bar an action against the property of any person, other than the corporate debtor or a person who has acquired such property through corporate insolvency resolution process or liquidation process under this Code and fulfils the requirements specified in this section, against whom such an action may be taken under such law as may be applicable. (3) Subject to the provisions contained in sub-sections (1) and (2), and notwithstanding the immunity given in this section, the corporate debtor and any person who may be required to provide assistance under such law as may be applicable to such corporate debtor or person, shall extend all assistance and co-operation to any authority investigating an offence committed prior to the commencement of the corporate insolvency resolution process.] of the IBC ishaving no retrospective effect, the decision in the case of Manish Kumar (supra) cited by the learned counsel for the petitioner rather goes against his submissions, wherein it was held as under: 316.1. Section 32-A provides immunity to the corporate debtor and its property when there is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors as a result of the corporate debtor continuing to be exposed to criminal liability. xxx 43. A section which has been introduced by an amendment into an Act with its focus on cesser of liability for offences committed by the corporate debtor prior to the commencement of the corporate insolvency resolution process cannot be so construed so as to limit, by a sidewind as it were, the moratorium provision contained in Section 14, with which it is not at all concerned. If the first proviso to Section 32-A(1) is read in the manner suggested by Shri Mehta, it will impact Section 14 by taking out of its ken Sections 138/141 proceedings, which is not the object of Section 32-A(1) at all. Assuming, therefore, that there is a clash between Section 14 IBC and the first proviso of Section 32-A(1), this clash is best resolved by applying the doctrine of harmonious construction so that the objects of both the provisions get subserved in the process, without damaging or limiting one provision at the expense of the other. If, therefore, the expression prosecution in the first proviso of Section 32-A(1) refers to criminal proceedings properly so-called either through the medium of a first in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or its officials. 6) In so far as the corporate debtor or its assets are concerned, after the completion of the CIR Process, i.e. a statutory process under the IBC, there cannot be any attachment or confiscation of the assets of the Corporate Debtor by any enforcement agencies after approval of the Resolution Plan. 7). Resolution Plan submitted by the interested Resolution Applicants are duly examined and validated by the Resolution Professional and the Committee of Creditors ( CoC ). Once the Resolution Plan is voted upon and approved by the CoC, it is submitted to the Ld. Adjudicating Authority for its approval. The Ld. Adjudicating Authority after hearing the objections, if any, and being satisfied that the Resolution Plan is in compliance with the provisions of the law, approved the Plan. The CIR Process is desired to ensure that undesirable persons do not take control of the Corporate Debtor by virtue of Section 29A of the IBC. The purpose and scheme of the CIR Process is to hand over the company of the corporate debtor to a bona fide new resolution applicant. Any threat of attachment of the assets of the corporate debtor or subjecting the corporate debtor to proceedings by in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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