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2022 (1) TMI 910 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHIValidity of Resolution Plan - Eligibility of Resolution Professional to place the Resolution Plan before the CoC for voting - eligibility of CoC to vote on such plan in the absence of ascertaining compliance with the mandatory provisions of the Code - exclusive security/charge over the trademarks - criteria for FCs category A and B is based on sound principle - Resolution Plan is discriminatory and in violation of the IBC - questioning resolution plan after getting approved - challenge to subsequent order dated 03.06.2019 whereby the Resolution Plan has been approved. Whether the Appellant has an exclusive security/charge over the trademarks? - HELD THAT:- The effective date of the MOU is 30.05.2014 and the validity of this MOU for 12 months means 29.05.2015. It is not pleaded by the Respondents that after 12 months the validity of MOU was extended by the parties. In the MOU there is no condition that all six parties shall share 1/6th of the sale proceeds. Whereas clause (e) provides that “Wherein it was decided that the parties can jointly proceed with the sale of trademarks and the sale proceeds so realised shall be deposited into a designated escrow account in the manner as provided in this MOU and then shared amongst the parties based on a mutually agreed sharing ratio - No document on record that pursuant to the aforesaid term it was agreed between the parties that they will share the sale proceeds of trademarks equally i.e. 1/6th. The MOU is valid only for one year i.e. 29.05.2015 whereas the resolution plan was approved by the CoC in the 20th CoC meeting held on 10.12.2018. As per the hypothecation deed dated 03.09.2012 the Appellant has an exclusive charge over the trademarks of the Corporate Debtor. Whether the criteria for FCs category A and B is based on sound principle? - HELD THAT:- Admittedly, the Resolution Applicant has divided the Financial Creditors into two categories i.e. category A and B, this categorization was made on the basis of core-assets and non-core assets of the Corporate Debtor over which the Financial Creditors have got some security interest. Category A are those assets which are required for the Corporate Debtor for running the business and non-core assets are those assets which are not required for running the business - The Resolution Applicant unable to justify the basis of categorization of the Financial Creditors in category A and B. It is undisputed that when this resolution plan was submitted before the CoC at that time the Appellant has raised a serious objection in regard to categorization. The Resolution Applicant is unable to convince us that the categorization is based on sound principle. Whether the Resolution Plan is discriminatory and in violation of the IBC? - HELD THAT:- It is a settled law, the resolution plan cannot discriminate between two sets of creditors similarly situated. The Respondents are unable to convince that on pro-rata basis why the Canara Bank is getting more amount in comparison to the Appellant. Therefore, we hold that the resolution plan is discriminatory between two set of creditors similarly situated and is in violation of the IBC. Whether once the Resolution Plan is approved by the CoC, it cannot be questioned even if it discriminates between two sets of creditors who are similarly situated? - HELD THAT:- The criteria of categorization of the FCs is not based on sound principal. The Appellant has an exclusive security/charge over the trademarks of the Corporate Debtor. The Resolution plan is discriminate between two Financial Creditors who are similarly situated. In such a situation the Appellant can question the Resolution plan even it is approved by the CoC. Whether the Appellant was required to challenge the subsequent order dated 03.06.2019 whereby the Resolution Plan has been approved by the Adjudicating Authority? - HELD THAT:- In this case, the Appellant is a dissenting Financial Creditor and he did not vote in favour of the resolution plan. In the resolution plan, the resolution amount has not been distributed as per the aforesaid amended provisions i.e. the priority and value of the security interest of a secured creditor has not been considered and as per the Regulation 38, the Appellant being a dissenting Financial Creditor shall be paid in priority over the Financial Creditor who voted in favour of the resolution plan - the resolution plan is not in conformity with the amended section 30(4) of the IBC and Regulation 38 (1) of IBBI (Insolvency Resolution Process for Corporate Persons), Regulations, 2016. Therefore, the impugned order is not sustainable in law as well as on facts. The approval of resolution plan by the CoC and subsequently approval of resolution plan by the Adjudicating Authority vide order dated 03.06.2019 is not sustainable in law. The Appellant was not required to challenge the subsequent order dated 03.06.2019. Thus, the impugned order as well as the order dated 03.06.2019 are hereby set aside - matter is remitted back to the CoC with the direction to distribute the resolution amount in conformity with the Section 30(4) r/w Regulation 38 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - Appeal allowed by way of remand.
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