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TMI Blog2024 (10) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... an is limited within the four corners of Section 30(2) of the Code.Adjudicating Authority in the Impugned Order has held that Resolution Plan meets the requirement of Section 30(2). There are no ground to interfere with the Impugned Order of the Adjudicating Authority approving the Resolution Plan at the instance of the Appellant - appeal dismissed. - [Justice Ashok Bhushan] Chairperson And [Barun Mitra] Member (Technical) For the Appellant : Mr. Krishnendu Datta, Sr. Advocate with Mr. Tushar Ajnkya, Ms. Pratiksha Sharma, Ms. Tanishka Desai, Ms. Alina Merin Mathew, Ms. Ritu Chaudhary and Mr. Saahil Bijliwala, Advocates For the Respondents : Mr. Gopal Jain, Sr. Advocate with Mr. Dhananjaya Sud, Mr. Lokesh Malin, Mr. Akhand Pratap, Ms. Swechcha Mishra, Mr. Manlik Chokshi, Ms. Rajnandini Singh and Ms. Suvarna Kashyap, Advocates for R-1, Mr. Milan Singh Negi, Mr. Nikhil Kumar Jha and Ms. Aakriti Gupta, Advocates for R-2 R-3, Mr. Gaurav Mitra, Sr. Advocate with Mr. Ankit Acharya and Ms. Lavanya Pathak, Advocates for Intervenor JUDGMENT ASHOK BHUSHAN, J. These two Appeals have been filed by the Appellant challenging the Order dated 25.06.2024 passed by the Learned Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no longer the Director of the Corporate Debtor. The Appellant was not entitled either to participate in the proceedings or to receive any documents or information. x. Another I.A. No. 2519/2024 was filed by the Appellant before the Adjudicating Authority which is referred as Fixed Deposit (`FD ) Application in which Application, Applicant pleaded that during the period April 2014 to April 2018, Corporate Debtor had submitted various FD receipts to the Officer of the Executive Engineer, Construction Division 3, PWD Manipuri by way of Performance Guarantee. The Executive Engineer authorised the refund of the FD vide letter dated 23.11.2019. It was pleaded that RP has concealed and undervalued Assets of the Corporate Debtor. xi. Reply was filed by RP to the Application, opposing the same pleading that no proceedings have been remitted by the SBI. RP pleaded that all facts have been placed before the CoC. Resolution Plan has been approved, which include the proposal of Successful Resolution Applicant (`SRA ) on relinquishment of their rights in favour of the Financial Creditor pertaining to money which may be recovered by the Corporate Debtor from third-party . xii. RP submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the RP has not correctly valued the Assets of the Corporate Debtor. The amount of about ₹20 Crores which relate to Performance Guarantee given by the Corporate Debtor has not been taken note while valuation of the Assets of the Corporate Debtor. The Officer of Executive Engineer, Construction Division 3, PWD, Manipuri had sent a letter dated 23.12.2019 to the Branch Manager authorising the refund of the amount of ₹8,46,66,072/- and further Fixed Deposit Receipts (`FDR ) of approximately ₹12 Crores and from time to time submitted by the Corporate Debtor to various Government Authorities by way of Performance Guarantee. Application filed by the Appellant being I.A. No. 2519/2024 has been rejected by the Adjudicating Authority incorrectly. 6 .Mr. Gopal Jain, Counsel appearing for the RP submits that RP has opposed both the IAs filed by the Appellant. Appellant was ex-Director who had resigned much before the initiation of CIRP of the Corporate Debtor, had no right either to participate in the CIRP or to receive any information or copy of the Resolution Plan. The Judgment of the Hon ble Supreme Court in ` Vijay Kumar Jain (Supra) has no application in the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23; and (g)Pass such other and further orders as this Hon ble Tribunal deems fit and necessary in the facts and circumstances of the present matter. 10 .Reply of the RP was filed to the I.A. No. 2519/2024, where RP has raised the locus of the Applicant to file the Application. The Application I.A. 2519/2024 is dated 16.05.2024, whereas the Adjudicating Authority has reserved the Orders in I.A. No. 910/2024 filed by the Applicant for staying the CIRP Process. This Application was filed only to create hurdles in the completion of CIRP Process. With regard to the FDR, it was pleaded that no proceed of fixed deposit were received by the Corporate Debtor during the CIRP period. Details were given in Paragraphs 12 to 16 of the Reply. 11 .It was further pleaded by the RP that relevant Clause in the Resolution Plan provides that any cash/bank balance in the accounts of the Corporate Debtor as on the date of approval of the Resolution Plan by appropriate authority after CIRP cost payments could be distributed between Financial Creditor over and above the amount stated above. In Para 20 of the Reply following was pleaded: 20. It is pertinent to state that as pet the said resolution plan, app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atedly is not acceptable since the above is not the only reason for rejecting the Applications rather Adjudicating Authority has taken the view that the Application is devoid of merits. In Para 3 of the Judgment of the Adjudicating Authority following has been observed: 3. During the course of hearing on 03.06.2024, the Applicant and Respondent in the application-at-hand were heard at length. Upon perusal of the materials which form part of the record, we are of the considered view that the application-at-hand is devoid of any merits whatsoever. Albert the Resolution Plan was reserved for Orders on 06.05.2024, the application-at- hand has been filed much belatedly. Notwithstanding the same, the Resolution Plan in consideration hereto has specifically dealt with all eventualities pertaining to recovery of monies and/ or receivables in relation to the Corporate Debtor, and the Committee of Creditors of the Corporate Debtor are unambiguously in principle satisfaction with the same. We therefore are of the shared view that the same does not warrant this Tribunal's interjection. 14 .The submission of the Counsel for the Appellant is that valuation of the Corporate Debtor was not cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le the Applicant to defend proceedings filed and show cause notice against him pertaining to the Corporate Debtor and further to stay the proceeding on any Resolution Plan including I.A. No. 5819/2023. 18 .We have already noticed above that Applicant has resigned as ex- Director on 19.11.2019, whereas the CIRP against the Corporate Debtor commenced on 21.10.2022. The sheet anchor of the submission of the Counsel for the Appellant in the Judgment of the Hon ble Supreme Court in Vijay Kumar Jain (Supra), the emphasis of the Counsel for the Appellant is that in view of the law laid down by the Hon ble Supreme Court in `Vijay Kumar Jain (Supra), Appellant as ex-Director was entitled copy of the Resolution Plan and all other information and documents. 19 .We need to first notice the Judgment of the Hon ble Supreme Court in Vijay Kumar Jain (Supra). Vijay Kumar Jain was a case where the Appeal was filed in the Hon ble Supreme Court by Appellant who was Member of the Suspended Board of Directors. In the above case also the prayer of the Vijay Kumar Jain for direction to the RP to provide relevant documents including the Resolution Plan was rejected by the NCLT. Facts of the case noticed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised representatives referred to in sub- sections (6) and (6-A) of section 21 and sub- section (5); (b)members of the suspended Board of Directors or the partners of the corporate persons, as the case may be; (c)operational creditors or their representatives if the amount of their aggregate dues is not less than ten per cent of the debt. 21 .We may also notice the provisions of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which provides that contents of the Notice for Meeting. Regulation-21 which is relevant is as follows: 21. Contents of the notice for meeting . (1) The notice shall inform the participants of the venue, the time and date of the meeting and of the option available to them to participate through video conferencing or other audio and visual means, and shall also provide all the necessary information to enable participation through video conferencing or other audio and visual means. (2) The notice of the meeting shall provide that a participant may attend and vote in the meeting either in person or through an authorised representative: Provided that such participant shall inform the resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be rejected. Equally, the Regulations, far from going beyond the Code, flesh out the true intention of the Code that is achieved by reading the plain language of the sections that have already been adverted to. So far as confidential information is concerned, it is clear that the resolution professional can take an undertaking from members of the erstwhile Board of Directors, as has been taken in the facts of the present case, to maintain confidentiality. The source of this power is Regulation 7(2)(h) of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, read with Para 21 of the First Schedule thereto. This can be in the form of a non-disclosure agreement in which the resolution professional can be indemnified in case information is not kept strictly confidential. 24 .Hon ble Supreme Court in Para 20 has also held that expression documents is a wide expression which would certainly include the Resolution Plans. Para 20 of the Judgment is as follows: 20 . It is also important to note that every participant is entitled to a notice of every meeting of the Committee of Creditors. Such notice of meeting must contain an agenda of the meeting, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor at its own accord before the initiation of CIRP of the latter by this Tribunal. The Applicant resultantly does not fall within the purview of the suspended or erstwhile board of directors as enunciated by the Code and therefore, the Applicant s principal reliance upon the afore-mentioned judgement in para {19.1} hereto, is wholly misplaced. We are therefore of the considered view that the Applicant s request for Resolution Plan(s) cannot be granted herewith. 19.3. With regards to document(s) sought by the Applicant in application-at-hand from the Respondent RP via prayer clause (b), we are of the shared view that the said documents from part of the public record(s), and any direction from this Tribunal to necessitate the provision of the same need not be warranted for at this juncture. 28 .We are of the view that the Adjudicating Authority has rightly dismissed the I.A. No. 910/2024 by making observations in Paragraphs 9, 19.2 and 19.3 as noted above. 29 .Adjudicating Authority having rejected the I.A. No. 910/2024, we are of the view that the Appellant cannot be allowed to challenge the approval of the Resolution Plan by the Adjudicating Authority, which stood approved by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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