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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 ..... pugned order has also noticed that SRA has failed to deposit the amount within 90 days as per the resolution plan. The invocation of Bank Guarantee with the UBI on 08.04.2024 was taken, which was noticed and Adjudicating Authority has observed that with consent of majority lenders of the corporate debtor, the Bank Guarantee was invoked. Letter dated 08.04.2024 invoking the Bank Guarantee itself clearly mentions that SRA failed to implement the approved resolution plan. Although, the appellant has referred to filing of the application by the UBI to recall of the approval order and filing of the appeal by the SBI, it is relevant to notice that even after dismissal of the appeal on 13.02.2024 and rejection of IA filed by the UBI on 10.11.2023, no amount was infused by the SRA. The litigation which was initiated with respect to approval of the resolution plan could not be a reason to appellant to not adhere to the timelines as provided in the resolution plan regarding the infusion of fund upfront payment of Rs.100 crore, which was required to be paid within 90 days admittedly has not been paid by the SRA. Effective date having been achieved on 25.07.2023, it is not even contested - In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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% vote shares. iv. Adjudicating Authority also passed an order approving the resolution plan vide its order dated 23.12.2021. v. Appellant gave a Performance Bank Guarantee (PBG) of Rs.25 crore on 31.12.2021. vi. Under the orders of Adjudicating Authority, certain modification in the resolution plan was approved by the CoC and the addendum submitted by appellant was approved. vii. Subsequently, Adjudicating Authority passed an order on 21.07.2023, approving the resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin 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 then JLM was held on 06.04.2024. JLM opined that SRA has failed to implement the plan. Decision was taken to invoke the PBG by majority of lenders. In the application filed by the UBI, as well as, the appeal filed by the SBI, there was no interim order restraining the SRA to implement the plan or to infuse the amount, more than 409 days have been elapsed, but the plan has not been implemented. Plan having not been implemented by the SRA, no error has been committed by the Adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 plan. Therefore, the MC members may discuss on the way forward in this regard." 9. SRA was obliged to pay Rs.100 crore within 90 days. Adjudicating Authority in the impugned order has also noticed that SRA has failed to deposit the amount within 90 days as per the resolution plan. The invocation of Bank Guarantee with the UBI on 08.04.2024 was taken, which was noticed and Adjudicating Authority has observed that with consent of majority lenders of the corporate debtor, the Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 has referred to filing of the application by the UBI to recall of the approval order and filing of the appeal by the SBI, it is relevant to notice that even after dismissal of the appeal on 13.02.2024 and rejection of IA filed by the UBI on 10.11.2023, no amount was infused by the SRA. The litigation which was initiated with respect to approval of the resolution plan could not be a reason to appellant to not adhere to the timelines as provided in the resolution plan regarding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 Bank of India & Ors.' (Supra) in paragraph 154, which is as follows: "154. Several decisions of this court have highlighted the importance of a speedy resolution process under the Insolvency and Bankruptcy Code, 2016 in the context of either completing the corporate insolvency resolution process in a time-bound manner as per section 12 of the Insolvency and Bankruptcy Code, 2016 or ensuring that the liquidator does not cause unnecessary delay or inefficiency in the liquidation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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