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TMI Blog2025 (4) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... w Tribunal, Ahmedabad, Division Bench, Court - 1 (in short ' Tribunal') by which an application bearing I.A No. 09 of 2024 filed under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 (in short ' Code') by the RP for the liquidation of the Corporate Debtor, namely, M/s Sintex Plastics Technologies Ltd. has been allowed and Mr. Bimal Ashok Desai has been appointed as the liquidator of the CD. 2. M/s Asset Reconstruction Company (India) Pvt. Ltd. filed a petition under Section 7 of the Code bearing CP (IB) No. 175/Ahm/2022 against the CD which was admitted on 21.02.2023 and Mr. Kshitiz Chhawchharia was appointed as the Interim Resolution Professional (IRP) of the CD. 3. IRP made public announcement in Form A on 01.03.2023 in financial express (English language), All India Edition and Financial Express (Gujarati language) Ahmedabad Edition for submission of proof of claims till 13.03.2023. 4. After collating the claims received from the creditors, the IRP constituted the Committee of Creditors (CoC) on 22.03.2023 of only one financial creditor, namely, RBL Bank Limited. 5. The CoC in its second meeting held on 03.07.2023 appointed Mr. Nimai Guatam Shah as the RP of the CD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted the request of the Appellant and stated that plan may be submitted by it before 02.12.2023. The Appellant alleged to have submitted its final resolution plan on 02.12.2023 with a financial proposal of Rs. 8 Cr. to be paid within four months from the date of approval of resolution plan by the Tribunal. 16. It is also alleged by the Appellant that it once again took initiative and submitted another addendum to the resolution plan through an email dated 21.02.2024 and made two proposals (i) to acquire the CD with its brand named for an amount of Rs. 8 Cr. (ii) to acquire the CD without its brand name for an amount of Rs. 4,50,00,000/-. 17. It is alleged that the RP put all the three compliant resolution plans for voting through e-voting window which closed on 26.03.2024 wherein the CoC abstained from voting on either of the resolution plans which were neither approved nor rejected. 18. However, the RP on 26.03.2024 intimated the Appellant that resolution plan has not been approved by the CoC and asked to provide the bank account details for refund of EMD. 19. The Appellant has alleged that in response to the email received on 26.03.2024, requested the RP to apprise about th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CoC was not in favour of the resolution plans, therefore, in its commercial wisdom it has abstained from voting. It is also submitted that on 27.03.2024 the RP informed the CoC that he was proceedings to file a petition for liquidation. He has also suggested CA Bimal Ashok Desai as the liquidator. He sought consent of the Bank/CoC latest by 27.03.2024. On the same day, the sole member of the CoC gave consent for the name suggested by the RP as the liquidator. Thereafter, since CIRP period had expired on 30.03.2024, therefore, the application was filed bearing I.A No. 6 of 2024, however, the said application was dismissed on 09.04.2024 granting liberty to file fresh application for liquidation with copy of Form H. It is alleged that in compliance of order dated 09.04.2024, RP filed the application with Form H bearing IA No. 09 of 2024. The application was filed for liquidation because the CoC did not approve any of the resolution plans and the CIRP period of the CD was over on 30.03.2024 which was inconformity with the provisions of Section 33 of the Code. It is also alleged that vide order dated 24.04.2024 the Applicant sought time to amend the cause title as well as to file rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion plan it could have exercised the option of conducting swiss challenge method amongst the PRAs. 32. It is further submitted that absence of the CoC from the voting on the resolution plan cannot be deemed to be rejection and in this regard, referred to an order passed by the Karnataka High court in the case of Kirloskar Electric Co. Ltd. Vs. Unknown, C.P No. 97 of 2022 decided on 13.02.2023 to contend that a member present and voting may remain neutral, indifferent, unbiased, or impartial i.e. not engaged on either side. One is not supposed to write anything except putting yes or no either in favour of or against the proposition. A vote casted without indicating the mind of the voter either for or against the resolution, is no voting at all. 33. It is submitted that the sole CoC abstained from voting neither decided to cast its vote in favour or against the resolution, therefore, it cannot be counted as voting at all. It is further submitted that even if the Bank is the sole member of the CoC having 100% vote right, who had abstained form voting, it cannot be considered to be commercial wisdom of the CoC against the resolution plan submitted by the Appellant. 34. In the end, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Dr. Abraham Patani of Mumbai & Anr. Vs. The State of Maharashtra & Ors., (Civil Appeal No. 5929 of 2022) in which the Hon'ble Supreme Court expounded upon the doctrine of substantial compliance and held that a procedural requirement is not strictly adhered to yet the essential purpose underlying the requirement is fulfilled then the action in question may nonetheless be deemed valid. This argument has been raised on the submissions that the CoC gave consent on 27.03.2024 for filing the liquidation application and nomination of Respondent No. 3 as the liquidator. 41. He has also highlighted the subsequent events which took place in this case contending that when the appeal was listed for hearing on 31.05.2024 it was brought to the notice of the Court that e-auction notice had been issued on 23.05.2024 scheduling the e-auction of the CD as a going concern on 21.06.2024 with a reserve price fixed at Rs. 20.61 Cr. This Court did not grant any interim stay on the auction but recorded that the Appellant shall have the right to participate in the auction process, however, the Appellant did not participate in the auction process from which it is apparent that it has no genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of this discussion, the CoC also sought recommendation for the nomination of liquidator. It is also submitted that with the extended CIRP period ending on 31.03.2024 and no approved resolution plan was there, therefore, the R2 was duty bound to file the application seeking liquidation and in terms thereof, he sought consent of the CoC which was accordingly granted, therefore, it is argued that filing of the application for liquidation was not erroneous as has been projected by the Appellant. 48. It is further submitted that there is a huge difference in the liquidation value of the CD to the value offered by the PRAs in its plan because he had only offered Rs. 8 Cr. whereas the CD as a going concern has fetched Rs.21 Cr. which was much higher than the capital sought to be injected by the Appellant in the CD. 49. We have heard Counsel for the parties and perused the record. 50. There is no dispute to the fact that RBL Bank is the sole member of the CoC with 100% voting right. It is also not in dispute that there were three resolution plans before the CoC in which one of the resolution plan was submitted by the Appellant and the sole member of the CoC abstained from voti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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