9911796707
TMI Blog2024 (12) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... Note dated 12.10.2023? - HELD THAT:- After receipt of the Resolution Plans, the CoC decided to hold a Challenge Process. The Resolution Professional issued a Challenge Process Document on 12.10.2023 containing Rules of the Challenge Process. Resolution Professional also asked by email dated 12.10.2023 to the Resolution Applicants asking them to submit undertaking before commencement of the Challenge Process. As per Annexure 1, the details pertain to financial bid in Challenge Process, base price, increment and other relevant clauses were mentioned. Clause 5(h) provided that value submitted by highest bidder of each round will be disclosed at the end of each round during the meeting to all the participating Resolution Applicants. There are no error in the Challenge Process insofar as consortium was exited after 2nd round. In the 3rd round, SRA has given a bid of Rs.251 Crores which was with increment of Rs.10 Crores to its earlier bid which was Rs.241 Crores. In the 3rd round, highest bid was Rs.251 Crores and there are no other Resolution Applicants. The Challenge Process was rightly closed - the Challenge Process was conducted by the Resolution Professional in accordance with Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional list and the final list, the Resolution Applicants are to be treated eligible to participate in the process and in the process, no objection can be taken regarding eligibility. However, when the Resolution Plan came for approval before the Adjudicating Authority, in a case where it is found that Resolution Applicant is not eligible and does not fulfil any requirement of eligibility, the Adjudicating Authority in no manner is deprived from considering the said question regarding eligibility. The objection regarding eligibility of Resolution Applicant, thus, can very well be considered by the Adjudicating Authority while considering the approval of the Resolution Plan - regarding eligibility of the Resolution Applicant, the same can very well be considered and examined by the Adjudicating Authority when the application to approve the Resolution Plan comes for consideration. The CoC which consists of financial institutions is well versed with the financials of all Resolution Applicants. The CoC under whose direction the Resolution Professional has issued Invitation for Expression of Interest is well aware of the clauses and eligibility provided. As noted above, the Resolution Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents : Mr. Neeraj Kishan Kaul, Sr. Advocate with Ms. Pooja Mahajan, Ms. Mahima Singh, Ms. Shreya Mahalwan, Mr. Raghav Agarwal, Mr. Saurabh Bacchawat, Advocates for R-1/RP. Mr. Sudhir K. Makkar, Sr. Advocate with Mr. Divij Kumar, Mr. Varun Tandon and Mr. Shivang Mukherjee, Advocates for R-2/CoC. Mr. Ardhendmauli Kumar Prasad Mr. Anupam Lal Das, Sr. Advocate with Mr. SP Singh Chawla, Mr. Sinha Shrey Nikhilesh, Mr. S. Shishir, Mr. Parth Davar, Mr. Rohit H. Nair, Ms. Sarakshi Asarsa, Mr. Swastik Verma, Ms. Shivali Singh, Advocates for R-3/SRA. Mr. Ramji Srinivasan, Sr. Advocate with Ms. Mahima Singh and Ms. Pooja Mahajan , Advocates for RP JUDGMENT ASHOK BHUSHAN, J. These five Appeal(s) arise out of Corporate Insolvency Resolution Process ( CIRP ) of the Corporate Debtor ( CD ) Reliance Broadcast Network Limited. Abhijit Realtors Infraventure Pvt. Ltd. and Creative Channel Advertising Marketing Pvt. Ltd., the unsuccessful Resolution Applicants have filed these five Appeal(s) challenging the orders passed by National Company Law Tribunal, Mumbai Bench dated 06.05.2024 in different IAs. The Adjudicating Authority by the impugned order dated 06.05.2024 has approved the Resolution Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Marketing Pvt. Ltd. gave a bid of Rs.100 crores, Entertainment Network (India) Limited ( ENIL ) gave bid of Rs.37.17 crores and Sapphire Media Ltd. gave a bid of Rs.104.28 crores. The Committee of Creditors ( CoC ) decided to hold Challenge Process as per the RFRP. On 12.10.2023, the RP issued Challenge Process Document (Process Note) containing key terms for conduct of Challenge Process. Base price of INR 240 crores was set for start of the Bid Process. At the end of each round, the bid with highest value will be the Threshold Bid Amount for the next round. The Resolution Applicant was required to either match or exceed the Threshold Bid amount for the respective round in order to continue participating in the Challenge Process. Each incremental bid of the Resolution Applicants was to be in multiple of Rs.10 crores. Abhijit Realtors Infraventure Pvt. Ltd. and ENIL came together and informed that they wish to participate as a Consortium. (iv) On 27.10.2023 during the 10th CoC Meeting Challenge Process was conducted and three round of bidding was conducted. In round one, Sapphire Media Ltd. gave a bid of Rs.241 crores, which was the highest bid received for first round. In the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... participate in the challenge process, however, participated in the negotiation process, filed IA No.290 of 2024 seeking declaration that SRA - Sapphire Media Ltd. was ineligible to submit its Resolution Plan. It was also prayed that IA No.5391 of 2023 seeking approval of the Resolution Plan be rejected. Direction was also sought to start de novo process for the examination of the Resolution Plans of other existing qualified PRAs. (ix) The Adjudicating Authority heard both the parties in IAs filed by the Consortium as well as Creative Channel Advertising Marketing Pvt. Ltd. and by order dated 06.05.2024 dismissed IA No.5572 of 2023 filed by the Consortium. By a separate order dated 06.05.2024, IA No.614 of 2024 filed by Consortium and IA No.290 of 2024 filed by Creative Channel Advertising Marketing Pvt. Ltd. were rejected. By a separate order of the same date i.e. 06.05.2024, IA No.5391 of 2023 filed by the RP for approval of Resolution Plan was allowed and the Resolution Plan submitted by Sapphire Media Ltd. was approved. (x) Company Appeal (AT) (Insolvency) Nos. 925 and 981 of 2024 have been filed by Consortium and Creative Channel Advertising Marketing Pvt. Ltd. respectively, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Process. The illegal process adopted by the Resolution Professional goes to the root of the entire process which was ex facie contrary to the IBC and Regulations. No Resolution Plan in pursuance of such process could have been approved. The mere participation in the Resolution Process by the consortium or giving an undertaking cannot stop the consortium from bringing to the notice of the Tribunal illegalities in the Resolution Process which go to the root of the matter vitiating the entire process. The entire process commencing from issuance of process note is materially irregular, contrary to the IBC and no such Resolution Plan can pass muster. Clause 7 of the process note contemplate that at the end of each round, Resolution Applicants must match or exceed the threshold bid amount for the next round. The bid of the Appellant was Rs.242 Crores (more than Rs.241 Crores of the threshold bid) which is more than matching the threshold bid. The Appellant could not have been exited the process. In round three, SRA gave a bid of Rs.251 Crores. Appellant had option to not bid in round three given the fact that its bid of Rs.242 Crores was the highest bid. Resolution Professiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its Resolution Plan in a consortium. Resolution Professional and CoC cannot be allowed to take shelter of commercial wisdom to conceal the frauds in the CIRP leading to approval of the Resolution Plan of an ineligible Resolution Applicant. The mere fact that no objection was raised by consortium when the final list of eligible PRA was published cannot stop the consortium from raising objection before the Adjudicating Authority when the plan approval application came up for consideration. An SRA who is ineligible cannot be allowed to implement the Resolution Plan nor any such Resolution Plan of an ineligible SRA can be approved by the Adjudicating Authority. CA Certificate dated 04.11.2023 has been referred by the Adjudicating Authority which obviously could not have been there at the time when plan was submitted by SRA in May, 2023. Under the guidelines issued by MIB (Ministry of Information and Broadcasting) only a company incorporated is eligible to run the business of F.M Radio. It is further submitted that as per Note (d) of EOI, the SRA was ineligible to participate in the process it having been blacklisted by Indian Oil Corporation. It is submitted that the approval of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eative gave Rs.240 Crores. On 06.11.2023, in the 12th CoC meeting where the revised proposals were opened in the presence of the relevant Resolution Applicants, the representatives of the consortium have expressed their satisfaction with the negotiation by the CoC. The CoC deliberated on the feasibility and viability of the Resolution Plans and evaluated them as per the evaluation matrix and by vote share of 88.97% approved the Resolution Plan of SRA. The submission of the consortium that they were wrongly exited after Round 2 is incorrect. During the challenge process, there were objections by e-mail raised by consortium which was duly replied by the Resolution Professional clarifying the process. All Resolution Applicants had given undertaking that they accept the challenge process. All Resolution Applicants were explained the steps in challenge process by the Resolution Professional. Challenge process was conducted as per the CIRP Regulations and Process Note. It is submitted that as per the CIRP Regulations, objections can be raised by the Resolution Applicants on the eligibility within five days from publication of list of Prospective Resolution Applicants. List of Prospective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.11.2023 with an updated CA Certificate signed by Garima Grover, which has been referred to and noted by the Adjudicating Authority which has shown increase in the financials. The CA Certificate by one Sachin which is relied by Appellant was not certificate given by the SRA but was certificate obtained by Creative, another Resolution Applicant which did not reflect the correct financial position of the SRA. Resolution Professional has conducted due-diligence on the basis of materials on record and was satisfied about the eligibility of SRA and other Resolution Applicants. It is submitted that the documents which are sought to be introduced by IA Nos.4691 of 2024 and 4692 of 2024 needs no consideration and those documents need not be permitted to be taken on record. GST Returns and Income Tax assessments were not required to be filed as per the Invitation for Expression of Interest and RFRP. What relevant certificates were required to prove the turnover and net worth were already filed. 10. Counsel for the CoC contends that SRA was fully eligible to submit a Resolution Plan. The expression entity as occurring in definition of group can also be an individual. The submission of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover of 12 group companies also fulfilled the threshold. Blacklisting by the IOC has been set aside by the Lucknow Bench of Allahabad High Court by its final judgment, however, the blacklisting by IOC is not covered by clause 8(d). The Income Tax Returns and GST Returns which are sought to be filed by IA No.4691 of 2024 and IA No.4692 of 2024 cannot be accepted. There is a clear bar on the appellants under Section 151 of the Central Goods and Services Tax Act, 2017 and Section 138 of the Income Tax Act, 1961 to produce or rely on to the returns. Appellant has not disclosed the source from which it has received the said documents. Appellant cannot be permitted to rely on the said documents nor the said document can be accepted on record. Both the applications filed by the Appellants deserve to be rejected. Counsel for the SRA submits that the SRA s plan has been approved by the CoC. CoC which consist of the financial institutions who are well versed with the financials of all applicants and have taken their commercial decision in the commercial wisdom cannot be interfered with, which is law well settled by the Hon ble Supreme Court. 12. From the submissions made by Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g process, open challenge or Swiss challenge process and each Resolution Applicant shall be bound by the terms goverming such a process, which shall be decided by the CoC in its commercial wisdom. The timelines and process for the negotiation shall be determined and/or communicated if considered necessary, at a later date. The Resolution Applicant shall not object to, and must participate in, the implementation of such negotiation process. By submitting the Resolution Plan, the Resolution Applicant shall be deemed to have unequivocally agreed that any process of negotiation adopted by the Committee of Creditors shall be binding on them and that they have no objection in following any such process. The Resolution Professional/Committee of Creditors shall also have the right to disclose the financials and scores of any Resolution Applicant (basis Evaluation Matrix) to other Resolution Applicant, pursuant to any challenge mechanism adopted by them. Provided however that the Resolution Professional or the CoC shall not be bound to disclose the commercials or scores of any Resolution Applicant or disclose the methodology adopted in arriving at such scores. It is further clarified that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound. Provided further that where all the active participating Resolution Applicants are at the Threshold Bid Amount, all such Resolution Applicants shall be required to participate in the next round ( in such a case it would be conveyed to the Resolution Applicant ) 15. Clause 9 deals with the elimination/ exit which is to the following effect:- 9. Elimination/Exit. In the event a Resolution Applicant does not match or exceed the Threshold Bid Amount for a particular round, the highest Financial Proposal of such Resolution Applicant shall be considered as the final bid of the Resolution Applicant and such Resolution Applicant shall be deemed to have exited the Challenge Process and such Resolution Applicant shall not be allowed to participate in the next round of bidding unless otherwise decided by CoC. 16. Post Challenge Process, Resolution Applicants were required to submit a draft of its Resolution Plan to incorporate the highest bid amount submitted by such Resolution Applicant in the Challenge Process to the Resolution Professional within a period of 24 Hrs. from the conclusion of the Challenge Process. 17. After communicating the Rules of Challenge Process to all Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it will be their last bid in this case the bid of the RA who has given the bid of Rs. 241 crores should be taken as the last bid and not allowed to bid further. However, in the meeting you allowed him to bid further. This is in contravention to the challenge process mechanism. Kindly either announce that this was his last bid or strap the process and redo the entire process again. Regards Vijay Lulla 19. The Resolution Professional immediately replied e-mail dated 27.10.2023 at 13:34:25 PM informing that the process is conducted as per the Challenge Process document. INR 240 Crores was the base price and there was no requirement for the initial bid to be in the increment of Rs.10 Crores which could have been of any value higher than the base price. E- mail of the Resolution Professional is as follows:- Subject: Re: Objection to Bid of Rs. 241 crores in Round 1 of RBNL From Rohit Mehra-RBNL To: Vijay P Lulla Cc: ***** Dear Sir. Please note that the process is being conducted as per the Challenge Process document. INR 240 Crore was the base price as specified in Clause, of the Rules for Challenge Process. As per the challenge process document, there was no requirement for the init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d round illegally. It is submitted that the Consortium was entitled to match the last threshold bid, in Round 1 Rs.241 Crores was highest bid and the bid which was to be given of Rs.242 Crores was higher than the last threshold bid. Consortium could not have been exited from the Challenge Process. It is relevant to note that the Resolution Professional s reply was sent immediately that bid in 2nd round given by consortium is not in accordance with the process document. We need to look into Clause 7 of the Challenge Process Document. The first part of Clause 7 is as follows:- 7. Increment. At the end of each round, the bid with highest value will be the Threshold Bid Amount for the next round. The Resolution Applicants must match or exceed the Threshold Bid Amount for the respective round in order to continue participating in the Challenge Process. Resolution Applicants will have to improve their bid in each round in multiple of Rs. 10 Crores. 23. The above clause provide that the Resolution Applicant must match or exceed the threshold bid amount for the respective round in order to continue participating in the Challenge Process. The next sentence in Clause 7 is Resolution Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to conduct various rounds of negotiations with the Prospective Resolution Applicants in the interest of value maximisation. Clause 2.3.11 is as follows:- 2.3.11 Further, notwithstanding anything stated herein, there shall be no restriction on the right of the Committee of Creditors to conduct various rounds of negotiations with the Prospective Resolution Applicants in the interest of value maximization. 27. Thus, negotiations after Challenge Process is fully permissible. Counsel for the Respondent has rightly placed reliance on the judgment of this Tribunal in Vistra ITCL (India) Ltd. vs. Torrent Investments Pvt. Ltd. Ors.-Company Appeal (AT) (Ins.) Nos.132, 133 and 134 of 2023 in which judgment, paragraphs 60 and 61 following was held:- 60. In view of the foregoing discussions, we, thus conclude that even after completion of Challenge Mechanism under Regulation 39(1A)(b), the CoC retain its jurisdiction to negotiate with one or other Resolution Applicants, or to annul the Resolution Process and embark on to re-issue RFRP. Regulation 39(1A) cannot be read as a fetter on the powers of the CoC to discuss and deliberate and take further steps of negotiations with the Resolution Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the CoC to negotiate with the Resolution Applicants. CoC took note of the same and requested representatives of RA were asked to leave the meeting. 29. The Consortium participated in the negotiation process and also gave increased bid. Negotiation process was conducted by the CoC for the value maximisation as is permitted by the RFRP. We do not find any error in the negotiation process conducted by the Resolution Professional under the decision of the CoC. From the above discussions, we are of the considered opinion that there is no error in the Challenge Process conducted by the Resolution Professional on 27.10.2023 as well as negotiation process which was undertaken by the CoC after challenge process. We answer Question (I) (II) accordingly. (I) Challenge Process dated 27.10.2023 was conducted in accordance with the CIRP Regulations as well as the Process Note dated 12.10.2023. (II) The CoC was fully competent to conduct Negotiation Process for value maximisation after completing the Challenge Process which Negotiation Process was conducted in accordance with RFRP and Process Note. Question No. III 30. The Appellant has challenged the eligibility of SRA and has filed appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Resolution Plan. Thus, we are not persuaded to accept the submission of the Respondent that since in the process no objection was raised to the eligibility of SRA, the same question cannot be raised before the Adjudicating Authority. We are of the view that regarding eligibility of the Resolution Applicant, the same can very well be considered and examined by the Adjudicating Authority when the application to approve the Resolution Plan comes for consideration. 33. Now we come to the grounds of challenge raised by the Appellant regarding eligibility. The Invitation for Expression of Interest issued by the Resolution Professional provided for eligibility of the Resolution Applicants in Clause 3. Clause 3 which deals with eligibility criteria under Section 25(2)(H) of the IBC is as follows:- 3. ELIGIBILITY CRITERIA UNDER SECTION 25 (2)(H) Pursuant to the provisions of Section 25(2)(h) of Code, read with Regulation 36A of the CIRP Regulations, the RP, hereby issues this IEOI inviting EOIs for submission of resolution plan(s) for the Corporate Debtor from prospective resolution applicants ( Prospective Resolution Applicants PRAS ) who fulfils the following eligibility criteria. A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, the net worth and turnover has to be considered at a group level. Group has been defined in Notes 5(a) of Invitation for Expression of Interest which provides as follows:- a) For the purpose of this Invitation for EoI, please note the following definitions : Group shall mean and include (i) an entity, which, directly or indirectly, holds 26% (twenty six percent) or more of the share capital of the Prospective Resolution Applicant or (ii) an entity in which the Prospective Resolution Applicant, directly or indirectly, holds 26% (twenty six percent) or more of the share capital or (iii) an entity in which the Prospective Resolution Applicant, directly or indirectly, has the power to direct or cause to be directed the management and policies of such entity whether through the ownership of securities of agreement or any other arrangement or otherwise or (iv) an entity which, directly or indirectly, has the power to direct or cause to be directed the management and policies of the Prospective Resolution Applicant whether through the ownership of securities or agreement or any other arrangement or otherwise or (v) an entity which is under common Control with the Prospective Resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holder is at least 51% of the total equity, excluding the equity held by, Scheduled Banks and Public Financial Institutions as defined in Section 4A of the Companies Act, 1956. The term largest Indian shareholder, used in this clause, will include any or a combination of the following: (1) In the case of an individual shareholder, (a) The individual shareholder. (b) A relative of the shareholder within the meaning of Section 6 of the Companies Act, 1956. (c) A company group of companies in which the individual shareholder HUF to which he belongs has management and controlling interest. (2) In the case of an Indian company. (a) The Indian company (b) A group of Indian companies under the same management and ownership control. For the purpose of this Clause, Indian company shall be a company, which must have a resident Indian or a relative as defined under Section 6 of the Companies Act, 1956/ HUF, either singly or in combination holding at least 51% of the shares. Provided that in case of a combination of all or any of the entities mentioned in Sub Clause (1) and (2) above, each of the parties shall have entered into a legally binding agreement to act as a single unit in managing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptable to the constitutional court, that, by itself, would not be a reason for interfering with the interpretation given. 40. This Tribunal has also occasion to take the above view in the judgment of this Tribunal in Authum Investment and Infrastructure Ltd. Vs. Rajneesh Sharma Administrator of SREI Equipment Finance Ltd. and SREI Infrastructure Finance Ltd. Ors.- 2024 SCC OnLine NCLAT 29 where in paragraph 22, following was held: 22. The determination of NPV of the Respondent No.2 as per final Resolution Plan as done by the Consolidated CoC and its advisors, thus, has to be treated as final and cannot be allowed to be challenged by any other Resolution Applicants. Present is a case where Appellant is challenging the determination of NPV by CoC and its Process Advisors contrary to the aforesaid Clause 2(ii) which is impermissible. 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 document and apply it for evaluation of NPV of the Resolution Applicants. The Hon ble Supreme Court in Silppi Constructions vs. Union of India- (2020) 16 SCC 489 held that the author of a document is a best judge as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below. (a) Net Worth Criteria. This test requires a PRA to have a minimum net worth of at least INR 50 Crores at a group level. While considering the net worth of the SRA, the net worth of INR 85.04 Crores of Mr. Sahil Mangla (being 99.99% shareholder and promoter of SRA) was also considered. Hence, at a group level, the minimum net worth requirement of INR 50 Crores was met. It is submitted that narrow interpretation of the term 'group' as canvassed by unsuccessful resolution applicants cannot be accepted as the intention was not to limit the meaning of 'group' to only corporate entities. The IEOI was intended to also cover promoter and promoter group. Hence, while the person submitting the IEOl was restricted to corporate entities (SRA was a corporate entity at the time of submission), the definition of the term 'group' in the IEOl was not meant to restrict the same to companies alone and could include the promoter that was holding/ owning 99.99% of the SRA (b) Turnover Criteria: As per this test, a PRA, which is a corporate entity, must have consolidated turnover at a group level which averages at least INR 75 Crores or more for the three immediately pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d given by SRA, hence, the said certificate is not relevant for determining the net worth or turnover of the SRA. 43. The CoC which consists of financial institutions is well versed with the financials of all Resolution Applicants. The CoC under whose direction the Resolution Professional has issued Invitation for Expression of Interest is well aware of the clauses and eligibility provided. As noted above, the Resolution Plan has placed before the CoC, while computing the net worth and turnover of the SRA, net worth and turnover of the promoter has been included. We have already held that in Clause 3, the definition of entity as occurring in Note 5 group also includes an individual. We are not persuaded to accept the submission of the Appellant that expression entity occurring in clause 3 has to be read as corporate entity . We find that the SRA was fully eligible to submit Resolution Plan it having complied with the eligibility as prescribed in Clause 3. 44. Appellant has filed IA No.4691 of 2024 in Company Appeal (AT) (Ins.) No.925 of 2024 and IA No.4692 of 2024 in Company Appeal (AT) (Ins.) No.924 of 2024 praying for acceptance of additional documents on record which documents i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons of the PRAs (including of each member of the Consortium), as defined under Section 29A of the Code. j) A statement showing how the PRA meets the conditions laid down in the eligibility criteria along with documents to substantiate the same. k) A statement giving details if the PRA or any of its related parties has withdrawn from or failed to implement or contributed to the failure of implementation of any other resolution plan. l) Any additional document information asked by RP or CoC must be furnished by PRA m) EOl shall be submitted in the following manner: i. Electronically at ip.rbnltd@ gmail.com with a copy to [email protected] ii. Hard copy EOI shall be submitted to following address: Unit No. 503, 5th Floor, ARC Plaza Industrial Estate. 48 Oshiwara Village, Jogeshwari (West). Mumbai 400102 45. The documents which are required to be filed along with the submissions of the EoI having already been prescribed and there is no requirement of Income Tax assessment or GST Returns, we are of the view that the additional documents sought to be brought on record by the Appellant need no consideration. The decision of the Resolution Professional and the CoC regarding eligibility of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds relating to Big FM Trade Marks. The said document was subsequently put on VDR after challenge process. The above letters were written to the Resolution Professional and by Resolution Professional respectively. With regard to subject matter as referred to in the letter, we fail to see how non-receipt of the letter by Appellant prior to challenge mechanism has prejudiced the Appellant in submitting its bid. The Resolution Plans were submitted on as is where is basis . No extra information was provided to the SRA and on the basis of same information all Resolution Applicants including SRA has submitted their bids. We, thus, are of the view that the mere fact that above two letters were put on VDR subsequently on 03.11.2023 in no manner has any effect on challenge process. 49. It is also relevant to notice that the Resolution Plan submitted by SRA has been approved by the CoC. The CoC in its commercial wisdom after deliberating on the feasibility and viability of the Resolution Plan and after evaluating the plan, has approved the Resolution Plan. The commercial wisdom of the CoC in approval of the Resolution Plan cannot be interfered with by the Adjudicating Authority or this Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable. 55. Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolution plan as approved by the requisite per cent 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. Reverting to Section 30(2), the enquiry to be done is in respect of whether the resolution plan provides : (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditors, for re-submission after satisfying the parameters delineated by the Code and exposited by this Court. 51. We answer the Question No.III as follows : - The SRA was eligible to submit a Resolution Plan as per Clause 3 of Invitation for Expression of Interest and the net worth and turnover of the promoter Mr. Sahil Mangla could be included for purposes of net worth of a group it being entity within the meaning of Clause 3 of Invitation for Expression of Interest. Question No. IV 52. In the foregoing discussions, we have considered the submissions of the Appellant alleging material irregularity in the process adopted by the Resolution Professional. We have already found that the challenge mechanism as well as negotiation conducted by the Resolution Professional is in accordance with the CIRP Regulations and Process Note. In evaluation of eligibility of the SRA also there is no irregularity committed by the Resolution Professional. We, thus, do not find any tenable ground raised within the meaning of Section 61(3)(ii) of the IBC, to interfere with the order approving the Resolution Plan. Question No.(IV) is answered accordingly. 53. In view of the foregoing discussions and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
