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TMI Blog2024 (12) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... egulation 39(1A) does not prohibit CoC from negotiating with Resolution Applicants or asking Resolution Applicants to further increase the Plan value. Any such step taken by the CoC to follow the Swiss Challenge Method cannot be said to be arbitrary or in violation of any statutory provisions of the IBC - The CoC had noted that the process has been carried on by the RP and his team in a completely fair and transparent manner which process was also well explained to all the PRAs. The declaration of the Anchor Bidder was also made in a transparent manner and all the other PRAs were given opportunity to improve the consideration in two rounds of discussions held in the COC meeting on 09.05.2024. This contention of the Appellant questioning Swiss Challenge method clearly lacks merit as the adoption of Swiss Challenge for value maximization was the outcome of the commercial wisdom of COC. The Adjudicating Authority has not committed any error in holding at para 30 of the impugned order that a perusal of the 52nd CoC Meeting reveals that the agenda qua adoption of the Swiss Challenge Method and the Anchor Bidding system were duly approved by the CoC in its commercial wisdom. Denial of ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge under Section 30(2) or Section 61(3) of IBC. The Hon ble Supreme Court has consistently held that it is not open to the Adjudicating Authority or the Appellate Authority under IBC to take into consideration any other factor other than the ones specified in Section 30(2) or Section 61(3) IBC in questioning the decision of the CoC - No sufficient ground has been made out within meaning of Section 61(3) of the IBC to interfere with the decision of the Adjudicating Authority approving the Resolution Plan of the SRA. The Adjudicating Authority did not err in approving the resolution plan of the SRA. We are also of the considered view that the Adjudicating Authority did not commit any error in rejecting the interlocutory application of the Appellant objecting to the approval by the CoC of the resolution plan of the SRA. In result, the impugned order does not warrant any interference. Appeal being devoid of merit is dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellant : Mr. Suraj Prakash , Mr. Mrinal Litoria , Ms. Priyanka Solanki , Advocates For the Respondent : Mr. Prakul Khurana , Mr. Yash Tandon , Mr. Gourav Asati , Mr. Nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SRA was in the form of an unsigned word document which was therefore not a valid resolution plan submission. Moreover, since the financial proposal was only screenshared by the RP in the CoC meeting, no real and meaningful discussion could have been held on the viability and feasibility of the resolution plan. The suspended management had also not been supplied a copy of the resolution plan and valuation reports. This was clearly in contravention of the well settled law laid down by the Hon ble Supreme Court in Vijay Kumar Jain Vs Standard Charted Bank and Ors. (2019) 20 SCC 455 that the suspended management is entitled to entitled to have a copy of the resolution plan of the PRAs to effectively participate in the CoC meetings. 3. Pointing out some of the other irregularities, it has also been submitted that the CoC had wrongfully adopted the Swiss Challenge Method. Moreover, the scoring of quantitative parameters as per the evaluation matrix was carried out by the RP and not by the CoC. Submission was pressed that that when the resolution plans received from PRAs were put up for voting in the 54th CoC meeting, RP had hastily conducted the voting on the resolution plan. It was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected. Having subjected themselves to the process of submission of resolution plans and having participated as a competing party with other PRAs, it does not behove of the Appellant to assail the resolution plan of other competing parties. It was asserted that the RP had been fair and transparent in the conduct of the CIRP and made complete disclosure of all relevant information to all the relevant stakeholders on the resolution plans of all PRAs for proper conduct of voting process. On the contrary, the Appellant had wilfully violated the CIRP Regulations while submitting their resolution plan by not depositing EMD and for not having filed any Expression of Interest which led to rejection of their resolution plan. Thus, they have no right to point fingers at the RP/CoC on the manner of conduct of CIRP. It was vehemently contended that the Appellant was only trying to derail and drag the CIRP process by raising technical pleas. The CIRP process for approval of resolution plan and the voting was run in a fair and transparent manner which had led to substantially revised offer from the anchor bidder. It was fervently contended that the Appellant being the suspended management, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have a copy of the resolution plan of all the PRAs. However, their participation was stymied by the RP as they were denied access to a copy of the resolution plan of SRA. Buttressing their argument, the Appellant stated that they had sent an e-mail to the RP demanding the resolution plan of the SRA. However, the RP did not share the plan prior to the commencement of voting which displays a clear intention on their part to prevent the suspended management from effectively participating in the discussion on the resolution plan. The email containing the final revised resolution plan of SRA-Respondent No. 3 was received by RP on the evening of 22.05.2024 by e-mail in the form of a word document sent as an attachment. Clauses 11(i) and 11(ii) of the RFRP required the SRA to sign each page of the submitted resolution plan which has not been done. As this document was unsigned, it was not even a valid resolution plan submission. It was also mentioned that even the CoC was not supplied copy of the plan of the PRA and that it was merely screen-shared during the CoC meeting. Further, the manner in which the resolution plan was approved in the 54th CoC meeting casts a serious doubt on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Method is concerned, it is relevant to mention that Clause 10(i) of the Request for Resolution Plan ('RFRP') categorically provided for adoption of the challenge mechanism by the CoC at its discretion. The relevant extract of the RFRP is reproduced hereunder: - The CoC may also use a challenge mechanism to enable resolution applicants to improve their plans in terms of Regulation 39(1A)(b) of the CIRP Regulations, 2016. 10. The contention of the Appellant that the CoC had wrongfully adopted the Swiss Challenge Method goes against the teeth of CIRP Regulation 39(1A) which allows the Swiss Challenge Method as one of the options which can be adopted by the CoC in requesting for resolution plan. It may be useful to notice Regulation 39(1A) which is as extracted below: 39(1A) The resolution professional may, if envisaged in the request for resolution plan- (a) allow modification of the resolution plan received under subregulation (1), but not more than once; or (b) use a challenge mechanism to enable resolution applicants to improve their plans. Thus, in terms of the above regulatory framework of IBC, we cannot read any fetters on the power of the CoC to take a decision to emba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 54th meetings held on 17.05.2024 and 22.05.2024 respectively. At the outset we must add that the RP took the roll call of all the participants including the Financial Creditors and suspended directors who attended the CoC meeting. Wherever required the PRAs were also invited to the meetings and admitted for discussion with CoC members. In the given circumstances, we are not impressed by the contention of the Appellant that there was violation of the CIRP Regulations 21 and 24. 14. When we peruse the minutes of the 53rd CoC meeting, we find that all the PRAs were given a chance to submit their best proposal in terms of the Swiss Challenge method pursuant to which 2 applicants had submitted their revised plans. Thereafter, the anchor bidder-Truflair Buildwell was allowed to revise its offer. On receipt of final revised resolution plans from the PRAs, the same were put for discussion before the CoC in the first session of the 54th CoC meeting, wherein all the PRAs were invited to participate and present their respective plans. During this meeting, one of the PRAs abstained from participating while the plan of the other PRA (who decided not to revise their plan value) could not be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Interestingly, we notice that the Appellant had not volunteered information on his own that he was also one of the Resolution Applicants. This was vociferously contended by the SRA and asserted that the Appellant could not have claimed access to the resolution plans of other PRAs as it would tantamount to breach of the confidentiality and commercial sensitivity of the plans submitted by the other PRAs. On a pointed query made by this Bench, the Appellant admitted that it had also wanted to submit a plan but their request was rejected. A closer look at the minutes of the 53rd CoC meeting shows that a password protected resolution plan was submitted belatedly by the Appellant which was not considered as they had failed to submit EOI within the prescribed timeline in Form G and also failed to submit earnest money. Thus, when the Appellant had themselves submitted password protected resolution plan without any protestation, they cannot now contend that this procedure suffered from irregularities. Furthermore, when the Appellant was callous, negligent and failed to adhere to the CIRP Regulations in the submission of their own resolution plan, it does not lie in their mouth to nit-pick ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asibility and viability of the Resolution Plan of the SRA which had scored 95 out of 100 on qualitative parameters of resolution plan. Reliance has been placed by the Respondents on the judgment of this Tribunal in PNC Infratech Limited Vs Deepak Maini in CA(AT)(Ins)No. 143 of 2020 wherein it has been held that there is no such mechanism under the IBC that gives the right to the Unsuccessful Resolution Applicant to challenge the score granted as per the evaluation matrix prepared by the CoC and the RP. The evaluation matrix and Process Document are documents which have been issued by the CoC and the CoC is the best judge to interpret its own documents and apply it for evaluation of the plan of the Resolution Applicants. Since the RFRP document has been approved by the CoC and the RFRP document provides for the evaluation matrix, the scoring done by the RP with the approval of the CoC cannot be questioned as arbitrary or unreasonable. CoC is the best judge to decide on how the evaluation matrix contained in the RFRP can be applied. The Appellant therefore cannot go into the technical issues with regard to evaluation and score matrix which is in the exclusive domain of the CoC. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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