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TMI Blog2025 (3) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Resolution Professional ("RP" in short) filed an application before the Adjudicating Authority for extension of CIRP period for 90 days which was allowed on 19.06.2023. In the 14th CoC meeting held on 29.08.2023, the CoC resolved to extend the CIRP period beyond 270 days. This was allowed by the Adjudicating Authority on 06.10.2023. On 19.10.2023, the 17th CoC meeting directed the RP to file application for extension of CIRP period as it wanted to discuss the resolution plan submitted by Mercury Terra Firma. On 30.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,949/- 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. The resolution plan therefore prejudiced the interests of Operational Creditors and amounted to non-compliance with Section 30(2)(b) of IBC. 5. Refuting the contentions raised by the Appellant, the Ld. Counsel for the Respondent submitted that the resolution plan could have been challenged only on the grounds laid down under Section 61(3) of the IBC but no such grounds have been substantiated by the Appellant in the present appeal. On the contention that the RP had only shared naked figures of fair value and liquidation value instead of providing the detailed valuation report, it was submitted that the 17th CoC meeting had after due deliberations recorded the reasons for not sharing the full valuation report with the Appellant. In any case, the Appellant being an Operational Creditor having no voting rights it was of no consequence whether the detailed va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority after expiry of 330 days of CIRP period. There is no doubt that in terms of Section 24(3)(c) of the IBC, it is the duty of the RP to give notice to the Operational Creditors or their representatives regarding the CoC meetings if the amount of their aggregate due is not less than 10% of the debt. It is also well settled that such Operational Creditors whose aggregate due is not less than 10% of the debt have a right to watch the proceedings of the CoC 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. They were therefore equally aware of the extensions of CIRP time-lines approved by the CoC but these extensions by the CoC were not questioned by them at the appropriate time. The issue was neither agitated before the Adjudicating Authority at the right point of time and is now being raked up belatedly. 9. Further when we look at the material on record, it is an undisp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulation 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 professional shall provide the fair values and the liquidation value to every member of the committee in electronic form, on receiving an undertaking from the member to the effect that such member shall maintain confidentiality of the fair value and the liquidation value and shall not use such values to cause an undue gain or undue lass to itself or any other person and comply with the requirements under sub-section (2) of section 29" The RP even informed the CoC members that such liquidation value and fair value were already sent and shared with all the CoC members. He further informed that CoC members also cannot share the values with anyone as they have provided the undertaking as per the Regulation 35(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and Section 29 of the Insolvency & Bankruptcy Code, 2016." 13. When we look at the above 17th C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 him to confirm that each resolution plan- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor; (b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than- (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section(1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals 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 present case, the RP after approval of the plan by the CoC with 97.36% vote share filed an application before the Adjudicating Authority seeking approval of the Resolution Plan under Section 31 of the Code. Section 31 deals with approval of Resolution Plan. Section 31(1) provides that if the Adjudicating Authority is satisfied that the Resolution Plan as approved by the CoC under Section 30(4) meets the requirements as referred to in Section 30(2), it shall by order approve the resolution plan which shall be binding on the Corporate Debtor and other stakeholders involved in the Resolution Plan. It is also pertinent to note that the Adjudicating Authority has noted at para 20 of the impugned order that the CoC has satisfied itself that the resolution plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. That the CoC also expressed its satisfaction that the plan was in accordance with Section 30 of the IBC and compliant with C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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