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TMI Blog2024 (10) TMI 1466X X X X Extracts X X X X X X X X Extracts X X X X ..... ted are denied fair and equitable treatment. In the case of Paridhi Finvest Pvt. Ltd. [ 2024 (2) TMI 557 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ], the case of the Appellant was that he was not paid the amount as per the liquidation value though the Appellant being a dissenting financial creditor was entitled for payment of amount as per liquidation value. In this case, the Court relied upon the decision in the case of Amit Metaliks and the decision in the case of Paridhi Finvest Pvt. Ltd. was upheld by the Hon ble Supreme Court and the appeal was dismissed. Although, the interpretation of Section 30(2)(b)(ii) of the Code is pending by a larger bench but at present the decision of the Hon ble Supreme Court in the case of Amit Metaliks is subsisting, therefore, relying upon the said decision, we hold that there is no error in the order of the Tribunal which calls for any interference by this Court and hence, the appeal is hereby dismissed. - [ Justice Rakesh Kumar Jain ] Member ( Judicial ) And [ Mr. Indevar Pandey ] Member ( Technical ) For Appellant : Mr. Shashank Agarwal , Mr. Abhishek Taneja , Advocates For Respondents : Mr. Abhishek Anand , Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r : - a. The objector no. 2 submits that the liquidation value of Rs. 82.66 Cr. of the CD as reported by the RP is wrong, baseless, misconceived, erroneous and should be rejected. The objector no. 2 adds that the calculation of the liquidation value is not in accordance with the provisions of the Code, 2016. b. The objector no. 2 further submits that the amount of Rs. 0.7955513 Cr. that has been offered to the objector no. 2 being the dissenting financial creditor is wrong and baseless. The objector no. 2 further submits that the liquidation value which the objector no. 2 is entitled is way beyond Rs. 1.38 Cr. 7. The Adjudicating Authority dealt with the objection of the Appellant in para 7 of the impugned order which read as under;- With regard to the Objector No. 2 s objections, we find that the resolution professional on receipt of the confidentiality undertaking from the objector no. 2 had shared the fair value and liquidation value with the objector no. 2. We further find that the valuation of all the three classes of assets of the CD were conducted by the IBBI panel registered valuer in compliance with the provisions of the Code, 2016 and the Regulation 35A of the CIRP Regula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r/w Section 53 of the Code but the appellant filed the objection to the approval of the resolution plan filed by the RP i.e. CA No. 485 of 2019 but the said objection has been rejected and plan has been approved. It is submitted that the Adjudicating Authority has erred in holding that as per Section 30(2)(b) of the Code, the liquidation value required to be paid to a financial creditor is only qua the secured interest of the financial creditor and not qua the total liquidation value of the CD. 10. On the other hand, Counsel for the Respondent has submitted that there is no infirmity in the order of the Tribunal because the secured financial creditor cannot insist on payment of the entire dues of the security as per its security interest in the event of approval of resolution plan and in this regard, relied upon a decision of the Hon ble Supreme Court in the case of India Resurgence ARC Pvt. Ltd. Vs. M/s Amit Metaliks Limited Anr., Civil Appeal No. 1700 of 2021. It is also submitted that as per Section 30(2)(b) of the Code the financial creditor who do not vote in favour of the resolution plan are entitled for payment of debt, which shall not be less than the amount to be paid to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that the Appellant was entitled for amount as per security value of the Appellant. It having equitable mortgage of 30 units/ flats. It is well settled that the security holder cannot insist payment of amount as per security interest, when there is resolution of the Corporate Debtor through a Resolution Plan. In this context, we may refer to judgment of the Hon ble Supreme Court in India Resurgence ARC Pvt. Ltd. V. Amit Metaliks Anr. (2021) SCC OnLine SC 409. In paragraphs 16 and 17 of the judgment, following have been held: 16. The repeated submissions on behalf of the appellant with reference to the value of its security interest neither carry any meaning nor any substance. What the dissenting financial creditor is entitled to is specified in the later part of sub-section (2)(b) of Section 30 of the Code and the same has been explained by this Court in Essar Steel [Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta, (2020) 8 SCC 531 : (2021) 2 SCC (Civ) 443] as under : (SCC pp. 628- 29, para 128) 128. When it comes to the validity of the substitution of Section 30(2)(b) by Section 6 of the amending Act of 2019, it is clear that the substituted Section 30(2)(b) gives the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion of unfinished project is helping in resolution of the CIRP of the Corporate Debtor and in which 97% vote share are being held by the Flat Buyers themselves, the Resolution Plan cannot be set aside at the instance of Appellant, who is being paid the amount as per Section 30, sub-section (2). We, thus, do not find any ground to interfere with the impugned order. The Appeal is dismissed. Parties shall bear their own costs. 11. It is further submitted that the decision in the case of Paridhi Finvest Pvt. Ltd. (Supra) has been upheld by the Hon ble Supreme Court because the appeal filed against this order bearing diary no. 14065 of 2024 was dismissed by the Hon ble Supreme Court. He has further submitted that as per the judgment of this Court in the case of ICICI Bank Limited Vs. BKM Industries Limited, CA (AT) (Ins) No. 405 of 2023 there is no scope of distribution of assets among financial creditor as per security interest. He has also argued that in the case of Union Bank of India Vs. Resolution Professional of Kudos Chemie Ltd. ors., CA (AT) (Ins) No. 665 of 2022 this Court has held that:- 5. The decision of the CoC regarding the distribution of amount is in its commercial wis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that :- 8. Learned counsel for the Appellant submits that valuation is at higher side which shall affect the homebuyers. Valuation has been obtained as per Regulations and Resolution Plan has been already approved, we, thus, are of the view that the Adjudicating Authority did not commit any error in rejecting the application filed by the Appellant. 9. Learned counsel for the Respondent has relied on judgment of Hon ble Supreme Court in Ramkrishna Forgings Limited vs. Ravindra Loonkar, Resolution Professional of ACIL Ltd. Anr., Civil Appeal No.1527 of 2022 decided on 21.11.2023. In the said case, after approval of the Resolution Plan question of valuation was sought to be raised and the Adjudicating Authority has directed for valuation, which order was set aside by the Hon ble Supreme Court. The said judgment fully supports the submission of learned counsel for the Respondent. 10. We, thus, are of the view that no error has been committed by the Adjudicating Authority in rejecting application filed by the Appellant. Appeal is dismissed. 13. Counsel for the Respondent has further submitted the commercial wisdom of the CoC is paramount and sacrosanct and in this regard, relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the NCLAT was right in observing that such amendment to sub-section (4) of Section 30 only amplified the considerations for the CoC while exercising its commercial wisdom so as to take an informed decision in regard to the viability and feasibility of resolution plan with fairness of distribution amongst similarly situated creditors and the business decision taken in exercise of the commercial wisdom of CoC does not call for interference unless creditors belonging to a class being similarly situated are denied fair and equitable treatment. It further held that :- 14.2. The extent of value receivable by the appellant is distinctly given out in the resolution plan i.e., a sum of INR 2.026 crores which is in the same proportion and percentage as provided to the other secured financial creditors with reference to their respective admitted claims. Repeated reference on behalf of the appellant to the value of security at about INR 12 crores is wholly inapt and is rather ill-conceived. 15. The limitation on the extent of the amount receivable by a dissenting financial creditor is innate in Section 30(2)(b) of the Code and has been further exposited in the decisions aforesaid. It has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake into account the order of priority amongst creditors under sub-section (1) to Section 53, including the priority and value of the security interest of the secured creditors, and other requirements as may be specified by the Board. These are the aspects that the CoC has to consider. It is not necessary for the CoC to provide each assenting party with liquidation value. However, a secured creditor not satisfied with the proposed pay- out can vote against the resolution plan or the distribution of proceeds, in which case it is entitled to full liquidation value of the security payable in terms of Section 53(1) on liquidation of the corporate debtor. The conflict with sub-clause (ii) to clause (b) to sub-section (2) to Section 30 does not arise as it relates to the minimum payment which is to be made to an operational creditor or a dissenting financial creditor. A dissenting financial creditor does not vote in favour of the scheme. Operational creditors do not have the right to vote. 49. In view of the aforesaid discussion, and as we are taking a different view and ratio from India Resurgence ARC Private Limited (supra) on interpretation of Section 30(2)(b)(ii) of the IBC, we feel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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