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TMI Blog2025 (3) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... P, had taken back the EMD amount, and it is only as an afterthought, after nearly six months, that the Interlocutory Application was filed for consideration of the resolution plan. This clearly appears to be an attempt to delay the process of CIRP/liquidation. The CoC, in its commercial wisdom, has not accepted the resolution plan and had directed the liquidation of the Corporate Debtor. The commercial wisdom of the CoC regarding acceptance/rejection of the resolution plan is "non-justiciable".
Conclusion - The Ld. NCLT had rightly refused to intervene in the decision of the CoC and its commercial wisdom in rejecting the resolution plan of the Appellant.
There is no ground to interfere with the order of the Ld. NCLT, and accordingly, the appeal fails and is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ct this application." 3. The brief facts of this case are as under: i) The CIRP in relation to the Corporate Debtor was initiated on 17.09.2019. The appellant had submitted a resolution plan along with EMD of Rs. 25,00,000/- on 19.02.2021. ii) On 03.04.2021, the Resolution Professional (hereinafter called the 'RP') informed the Appellant, through email, that the resolution plan submitted by it has been rejected. The earnest money deposited was refunded to the Appellant on 10.05.2021 on request of the Appellant. iii) On 01.10.2021, the Appellant filed IA (I.B.C)/921(KB)2021 in which the impugned order dated 13.09.2022 was passed dismissing the said IA. 4. In its oral submissions, the Appellant stated that it was the sole bidder. It was submitted that it is the settled principle of law that liquidation should be the last resort and every effort should be made to revive the Corporate Debtor and this view is supported by the judgment in the case of 'K.N. Rajakumar Versus V. Nagarajan & Ors.', (2022) 4 SCC 617. 5. It is further submitted that Ld. NCLT failed to appreciate the fact that resolution plan was viable and compliant and its non-consideration will be resulting into liq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,00,000/- was credited in the bank account only on 03.03.2021. On 07.04.2021, the Appellant sent email with a proposal to waive the debt assignment clause in their resolution plan thereby reducing resolution plan by approximately 30%. vii) After being intimated about rejection of its resolution plan, the Appellant had made repeated requests to RP to refund the EMD amount and the relevant emails are at pages 252 to 259 of the Appeal Paper Book. The EMD was refunded on 10.05.2021 and it was only on 01.10.2021 that the Appellant approached the Ld. NCLT by filing the IA No. 921/2021. The Committee of Creditors (hereinafter called as the 'CoC') had considered the plan of the Appellant, which is apparent from the minutes of the meeting of the CoC dated 22.02.2021 (16th meeting), dated 04.03.2021 (17th meeting), dated 17.03.2021 (18th meeting), dated 20.03.2021 (19th meeting) and dated 07.04.2021 (20th meeting). The CoC concluded that the resolution plan of the Appellant was non-complaint under Section 29A of IBC, 2016 and further the Appellant had sent an email reducing the plan amount. The plan was rejected by the CoC and decision was taken by the CoC to liquidate the Corporate Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the PRA intends to address the cause of default, thus is non-complaint under Regulation 38 (3) (a); vi) The feasibility of the Resolution Plan is highly questionable, thus, it is non-complaint under Regulation 38 (3) (b). 8. On 09.04.2021, the CoC voted in favour of the liquidation of the Corporate Debtor with 100% vote. The EMD amount of Rs. 25,00,000/- paid by the Appellant, on repeated requests was refunded to the Appellant on 10.05.2021. It was almost after six months of rejection of resolution plan and after almost five months of refund of the EMD amount, the Appellant approached the Ld. NCLT for consideration of its resolution plan. The CoC requested that the Appeal be dismissed so that the liquidation process is carried out as expeditiously as possible. 9. We have heard both the sides and have perused the records. It is admitted fact that only one resolution plan was submitted in the CIRP of the Corporate Debtor. The RP has brought out that this plan was not compliant with the eligibility requirements of Section 29A of IBC, 2016. For easy reference, the provisions of Section 29A are reproduced below: "29A. Persons not eligible to be resolution applicant. - A perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority under this Code;] [(d) has been convicted for any offence punishable with imprisonment - (i) for two years or more under any Act specified under the Twelfth Schedule; or (ii) for seven years or more under any law for the time being in force: Provided that this clause shall not apply to a person after the expiry of a period of two years from the date of his release from imprisonment: Provided further that this clause shall not apply in relation to a connected person referred to in clause(iii) of Explanation I]; (e) is disqualified to act as a director under the Companies Act, 2013 (18 of 2013): [Provided that this clause shall not apply in relation to a connected person referred to in clause (iii) of Explanation I;] (f) is prohibited by the Securities and Exchange Board of India from trading in securities or accessing the securities markets; (g) has been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under this Code: [Provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial sector regulator, notify in this behalf, namely: - (a) a scheduled bank; (b) any entity regulated by a foreign central bank or a securities market regulator or other financial sector regulator of a jurisdiction outside India which jurisdiction is compliant with the Financial Action Task Force Standards and is a signatory to the International Organisation of Securities Commissions Multilateral Memorandum of Understanding; (c) any investment vehicle, registered foreign institutional investor, registered foreign portfolio investor or a foreign venture capital investor, where the terms shall have the meaning assigned to them in regulation 2 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 made under the Foreign Exchange Management Act, 1999 (42 of 1999); (d) an asset reconstruction company register with the Reserve Bank of India under section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (e) an Alternate Investment Fund registered with Securities and Exchange Board of India; (f) such categories of persons as may be notifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Applicant whose plan was also considered by the CoC in its 14th CoC meeting held on 24th May, 2023 but the plan of Respondent No. 3 was approved with 100% vote share of CoC. Appellant whose plan was also considered and not approved by the CoC cannot be said to be aggrieved by the approval of the Resolution Plan of Respondent No. 3. It is well settled that commercial wisdom of CoC in approving the resolution plan is not to be interfered by the Adjudicating Authority in its judicial review and limited ground for interference with the resolution plan is only when resolution plan violates or is in non-compliance of Section 30(2) of the Code. The Appellant has no such right that its resolution plan should be approved by the CoC which proposition has already been laid down by the Hon'ble Supreme Court in Arcelor Mittal India Pvt. Ltd. Vs. Satish Kumar Gupta, (2019) 2 SCC 1" 12. The Ld. NCLT had rightly refused to intervene in the decision of the CoC and its commercial wisdom in rejecting the resolution plan of the Appellant. In the facts and circumstances of the case, we are of the opinion that there is no ground to interfere with the order of the Ld. NCLT, and accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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