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TMI Blog2025 (3) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... oC and express their views in the meetings without however any right to vote. In the present case, there is no denial of the fact that the Appellant received notice of the CoC meetings from the RP. As the Appellant was kept informed of the CoC meetings and records show their regular participation in such meetings, they had full knowledge of the CIRP proceedings. It is an undisputed fact that the resolution plan in the present case was approved by the Adjudicating Authority beyond 330 days. Be that as it may, we also notice that the Adjudicating Authority had already approved the extension of CIRP period on 08.01.2024 which date was before 29.01.2024 when the plan was approved. In the present case, the 23rd CoC meeting on 04.12.2023 had taken note of the fact that it was in an advanced stage of considering the resolution plans before it and since the extended CIRP period was getting expired on 10.12.2023, the CoC approved seeking further extension of CIRP period. Clearly enough, CoC having taken a considered decision in this regard, this constituted sufficient grounds for the Adjudicating Authority to extend further time beyond 330 days for completion of the CIRP process. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Pooja Singh and Mr. Akash Agarwalla, Advocates JUDGMENT ( Hybrid Mode ) Per : Barun Mitra , Member ( Technical ) The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 ('IBC' in short) by the Appellant arises out of the Order dated 27.11.2024 (hereinafter referred to as 'Impugned Order') passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench-II) in IA No 6 of 2024 in CP(IB)/9(AHM)2021. By the impugned order, the Adjudicating Authority has approved the resolution plan of the Corporate Debtor as submitted by the Resolution Professional. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant-Operational Creditor. 2. The sequence of events which are necessary to be noticed for deciding the present appeal are as follows: On 07.12.2022, the CIRP of the Corporate Debtor was initiated and IRP was appointed. The IRP constituted the CoC comprising of two Secured Financial Creditors and two Unsecured Financial Creditors. The first CoC meeting was held on 13.01.2023. On 10.03.2023, the Form-G was published by the IRP inviting EOIs. On 05.06.2023, the CIRP period of 180 days had expired. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 023 only in the newspapers and not on the website of IBBI or the Corporate Debtor which amounted to non-compliance of Regulation 36-A(2) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations" in short). It is also contended that the RP did not circulate the valuation report of the Corporate Debtor either to the Appellant or to other members of the CoC but only furnished bare figures of fair value and liquidation value. In the absence of valid and detailed valuation reports, the CoC would have been handicapped to exercise its commercial wisdom judiciously. However, the Adjudicating Authority has overlooked these procedural irregularities in approving the resolution plan. 4. It was also pointed out that the RP had admitted Rs 7,40,60,531/- as against Rs 7,61,15,758/- claimed by the Appellant and that the aggregate admitted claim of all Operational Creditors put together worked out to Rs 18,34,60,969/-. However, as against a composite claim of Rs 18.34 Cr. of the Operational Creditors, the Successful Resolution Applicant has offered only Rs 60 lakhs for payment to Operational Creditors which was shockingly low. The resolution plan ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the commercial wisdom of the CoC. In any case, it was vehemently contended that the resolution plan already stands implemented and therefore cannot be reversed when the Appellant has failed to make out any ground as to how the resolution plan was non-compliant of Section 30(2) of IBC. 7. We have duly considered the arguments advanced by the Learned Counsel for both the parties and perused the records carefully. 8. The short point for our consideration is whether there were material irregularities in the exercise of powers by the RP in the CIRP proceedings; whether the claims of the Operational Creditors did not receive their dues or whether there was any contravention of the provisions of law. 9. Coming to the contentions raised by the Appellant with regard to material and procedural irregularities, we find that the Appellant has assailed the impugned order approving the resolution plan on the ground that the plan was approved by the Adjudicating Authority after expiry of 330 days of CIRP period at a time when this outer time-line could not have been breached in terms of the Essar judgment. 10. There is no doubt that in terms of Section 24(3)(c) of the IBC, it is the duty of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended by the Appellant is that though Regulation 35(2) of the CIRP Regulations makes it incumbent on the part of the RP to provide fair value, liquidation value and valuation report to every member of the CoC, the same was not done. 14. To appreciate the above allegation better, we need to look at the minutes of the 17thCoC meeting wherein this issue was discussed in details which is as extracted hereunder: "Agenda 7) Any other matters relevant to the present case subject to approval of Chairman. One of the CoC members i.e. Riddhi Siddhi GlucoBiols Limited represented by their authorised representative required and insisted the RP to provide them the Valuation Reports of the Corporate Debtor to share ahead with prospective buyers. The RP informed that he can only share the Fair Value & Liquidation Value of the Corporate Debtor. The RP drew their attention to the regulations of the IBC, 2016 that as per the Regulation 35(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 which is quoted below: "After the receipt of resolution plans in accordance with the Code and these regulations, the resolution p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere received. Further, non-publication of Form-G has a bearing on the interests of the potential resolution applicants who have not raised any such complaint. The Appellant in their capacity as Operational Creditor cannot rightfully claim that their interests were prejudicially affected on this count. Moreover, it is ironical that on the one hand the Appellant has been expressing concern over CIRP timelines having been crossed and yet a belated complaint is being thrown up pushing the plan approval process into disarray. 17. Yet another contention of the Appellant was that the plan was wrongly approved by the Adjudicating Authority without the plan conforming to the statutory provision as contained in Section 30(2)(b) of the IBC. This argument was premised on the ground that the Appellant as Operational Creditor had not been allocated amount as per their entitlement under Section 30(2)(b) of IBC. 18. To decide on the tenability of the above argument, we may first notice the provisions contained in Section 30(2)(b) of the IBC which reads as follows: Section 30: Submission of resolution plan. 30. (2) The resolution professional shall examine each resolution plan received by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been specified for Operational Creditors in terms of liquidation value. We are of therefore of the considered view that since the liquidation value in the present case is nil, the Operational Creditors including the Appellant cannot have any grievance against the amount being paid to them since the amount paid under the plan to the Operational Creditors is clearly more than the liquidation value. 21. The resolution plan has been approved with a majority of 97.36% of vote share. The plan having been approved by majority of votes, the Operational Creditor is clearly bound by the approved resolution plan. We therefore are of the considered view that the Adjudicating Authority did not commit any error while approving the resolution plan after noting its satisfaction at para 26 of the impugned order about the plan being in compliance of the provisions of the IBC in terms of Section 30(2) of the IBC. 22. It may be useful to notice that Section 30 of the IBC which deals with submission of Resolution Plan and sub-section (6) thereto states that "the resolution professional shall submit the Resolution Plan as approved by the Committee of Creditors to the Adjudicating Authority". In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statutory provisions of the IBC and the CIRP Regulations framed thereunder are complied with, it is the commercial wisdom of the requisite majority of the CoC which is to negotiate and accept a resolution plan. Once all the mandatory requirements have been duly complied with and taken care of, judicial review cannot be extended to analyse and look into the dissatisfaction evinced by any particular creditor or stakeholder. The Adjudicating Authority cannot substitute its views with the commercial wisdom of the CoC nor deal with the merits of Resolution Plan unless it is found it to be contrary to the express provisions of law and against the public interest. There is neither any material irregularity nor contravention of any provisions of law by the CoC which has been justifiably substantiated by the Appellant. In the present case when no valid grounds have been made out to challenge the approval of the resolution plan, the legislative fiat of the IBC that the Adjudicating Authority cannot trespass upon the business decision of the CoC holds ground. We have no doubts in our mind that the plan has been rightly approved by the Adjudicating Authority. 25. In result, we do not find a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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