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TMI Blog2025 (3) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... kash, Ms. Kirti Talreja and Ms. Alina Merin, Advocates for R-1 to 16 Mr. Vaijayant Paliwal, Ms. Kirti Gupta, Mr. Devansh Rathi, Advocates with Mr. Udayraj Patwardhan, RP for RP. ORDER ASHOK BHUSHAN, J. This appeal has been filed challenging the order dated 06.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal, Court - II, Mumbai Bench) rejecting I.A. No.1956/2024 filed by the appellant and allowing I.A. No.2520/2024 filed by the Respondent/Union Bank of India (UBI). Both the orders are under challenged in these two appeals. 2. Brief facts of the case necessary to be noticed for deciding these appeals are : i. On an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for short 'the Code' or 'the IBC'), the CorporateDebtor - Lavasa Corporation Limited was admitted to insolvency resolution process by order dated 30.08.2018. ii. In the Corporate Insolvency Resolution Process (CIRP) of the corporate debtor, resolution plans were invited. iii. The appellant submitted its resolution plan on 20.11.2021. In the Committee of Creditors (CoC) meeting held on 13.12.2021. The resolution plan of the appellant was approved with 96.41% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed an appeal on 11.09.2023 and UBI filed an application before NCLT for recall of the order on 16.09.2023. Financial creditor having started questioning the approval of the plan, stage of uncertainty was set in and it was not possible for the SRA to implement the resolution plan. There was absolute non-cooperation on part of the lenders to the appellant. Appellant agreed to all terms and conditions concerning the commercial aspect of the plan. Appellant submitted PBG well within the time. Appellant has always been ready to implement the plan. Adjudicating Authority ought to have allowed the application filed by the appellant and permitted him to deposit the amount. The invocation of the Bank Guarantee by UBI on 08.04.2024 was uncalled for. In the meeting held on 19.03.2024, the Resolution Applicant (RA) expressed his willingness to implement the plan, post 20.04.2024. 5. Learned Counsel appearing for the CoC refuting the submissions of the appellant submits that as per the timeline for the payment under the resolution plan, SRA was to infuse Rs.100 crore within 90 days. In the Monitoring Committee, meetings held from time to time. SRA was asked to implement the plan and it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red financial creditors. ***AS per para 18 of the Plan Approval Order: "18. In relation to Dissenting Financial Creditors, the Resolution Plan clarifies that financial creditors, who do not vote in favour of this Resolution Plan, will be entitled to receive at least the amount that they would have received in i:Jccordance with sub-section (1) of Section 53 of the Code in the event of a liquidation of the Corporate Debtor, in priority to the payments being made to the financial creditors who vote in favour of the Resolution Plan, in compliance with Section 30 of the Code and Regulation 38 of the CIRP Regulations. " Note: RA has filed an IA 4863 of 2023 wherein they has sought an exclusion for the period from 6.10.2023 till the disposal of IA 4340/2023 filed by UBI. The said application is still sub-judice and is listed before Hon'ble NCLT on April 26, 2024. The Chair apprised the MC members that the abovementioned amount was required to be paid by the RA within 90 days of the effective date in terms of the resolution plan, however on account of various issues and ongoing litigations, it has not been paid even though there was no stay on the approval of the resolution p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and willing to implement the Resolution Plan subject to the lender banks and home buyers giving an assurance that they will not prosecute and/or initiate any proceedings challenging the Resolution Plan. It is only a conditional prayer without a clear timeframe for making payments including the upfront payment. Thus, we are of the considered view that the facts and circumstances of the present case, the applicant Jacks the bona fides to justify an extension of timelines under the Resolution Plan. 35.1 Having come to the conclusion that the SRA has failed to implement the approved Resolution Plan, the question which now arises for consideration is as to whether the CIRP can be restored or not. While the Union Banlc on behalf of secured creditors of the Corporate Debtor has sought restoration of CIRP as well as exclusion of period from the date of submission of the resolution plan to the date of the filing of the application for approval to the Tribunal, and dissolution of the Monitoring Committee, the SRA, however has submitted that in the event of failure of an approved resolution plan, the only consequence permissible under the Code is liquidation." 11. Although, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regulation, "performance security" shall mean security of such nature, value, duration and source, as may be specified in the request for resolution plans with the approval of the committee, having regard to the nature of resolution plan and business of the corporate debtor. Explanation II. - A performance security may be specified in absolute terms such as guarantee from a bank for Rs. X for Y years or in relation to one or more variables such as the term of the resolution plan, amount payable to creditors under the resolution plan, etc.]" 12. Learned counsel for the CoC has rightly contended that not a single penny has been paid by the SRA, although, more than 409 days have been elapsed. The CIRP process has to be completed in a timeline and timeline of the CIRP process has to be adhered by all, including the SRA. In this context, we may refer to the judgment of the Hon'ble Supreme Court in the matter of 'State Bank of India & Ors.' Vs. 'Consortium of Murari Lal Jalan and Florian Fritsch & Anr.' reported in 2024 SCC OnLine SC 3187. Timely implementation of the resolution plan is also one of the underlying objectives of the IBC as was held by the Hon'ble Supreme Court in 'State B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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