2022 (5) TMI 1440 - Tri - Insolvency and Bankruptcy

Seeking approval of the Resolution Plan - Section 31 of the Code read with Regulation 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016 - HELD THAT - The objections raised by just three home buyers out of 26 home buyers have no merit as the time limit was fixed by this Tribunal and in view of which the RP carried out the process within the framework of the Code. Further all the requirements of Section 30 (2) are fulfilled and no provision of the law for the time being in force appears to have been contravened. The Adjudicating Authority is not expected to substitute its view with the commercial wisdom of the CoC. nor should it deal with the technical complexity and merits of the Resolution Plan unless it is found contrary to express provisions of law and goes against public interest - Accepting the Resolution Plan is advantageous to all the stakeholders and amounts to maximization of the assets of the Corporate Debtor and promotes entrepreneurship and ensures that the Company continues to function as a going concern. The right of rejection or approval of a plan is with the CoC. In a particular case what should be the percentage of claim amount payable to one or other Financial Creditor or Operational Creditor or Secured Creditor or Unsecured Creditor can be decided by the Committee of Creditors based on facts and circumstances of each case. It is a well settled proposition of law that commercial and business decisions of CoC are not open to judicial review. The Adjudicating Authority cannot enquire into the commercial wisdom of CoC. The ground for rejection is limited to the matter specified under Section 30(2). It is however reiterated that the resolution plan in question meets the requirements specified in Section 30(2) of the Code and the reasoned commercial decision of CoC is neither discriminatory nor perverse. The requirements as per the Code and the relevant Regulations have been complied with. Moreover the Resolution Plan has been approved by 98.58% of the voting share of the members of CoC and has been submitted in compliance with Section 30 of the Code for approval - there are no infirmity has been brought out upon screening of the Resolution Plan. The Resolution Plan is approved - application allowed.

Summary

Issues Involved:
1. Approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with procedural requirements under the Code and CIRP Regulations.
3. Objections raised by dissenting homebuyers regarding the voting process and preliminary views.
4. Reliefs and concessions sought by the Resolution Applicant.

Detailed Analysis:

1. Approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016:
The application was filed by the Resolution Professional seeking approval of the Resolution Plan submitted by M/s. Adani Infrastructure and Developers Pvt. Ltd. (AIDPL) under Section 31 of the Code. The Resolution Plan was approved by the Committee of Creditors (CoC) with a 98.58% voting share. The Tribunal emphasized that the commercial wisdom of the CoC should not be interfered with unless the plan is contrary to the provisions of law or public interest, citing the Supreme Court's decision in Kalparaj Dhraramshi v. Kotak Investment Advisors Ltd.

2. Compliance with procedural requirements under the Code and CIRP Regulations:
The Tribunal examined the compliance of the Resolution Plan with Section 30(2) of the Code. The Resolution Professional confirmed that the plan provided for the payment of Insolvency Resolution Process costs, debts of operational creditors, management of the corporate debtor's affairs, implementation, and supervision of the plan. The plan did not contravene any provisions of law and complied with all applicable regulations. The Resolution Professional also submitted a compliance certificate in Form H.

3. Objections raised by dissenting homebuyers regarding the voting process and preliminary views:
Three homebuyers raised objections alleging procedural irregularities, including the failure to seek preliminary views and the use of email for voting instead of an electronic voting portal. The Tribunal found that the objections lacked merit as the voting by email satisfied the requirements of Regulation 26 and no prejudice was caused to the objectors. The Tribunal noted that the process was carried out within the framework of the Code and all requirements of Section 30(2) were fulfilled.

4. Reliefs and concessions sought by the Resolution Applicant:
The Resolution Applicant sought various reliefs and concessions, including exemptions from registration charges, stamp duty, taxes, and fees. The Tribunal declined these exemptions but granted reliefs related to offenses committed prior to the commencement of CIRP as stipulated under Section 32A of the Code. Other reliefs and concessions were either subsumed within the granted reliefs or not granted if they violated any law in force.

Conclusion:
The Tribunal approved the Resolution Plan under Section 31(1) of the Code, noting that it met all statutory requirements and received overwhelming support from the CoC. The plan was deemed advantageous to stakeholders, promoting asset maximization and ensuring the corporate debtor's continued operation as a going concern. The moratorium order ceased to have effect from the date of the order, and the Resolution Professional was directed to forward all records to the Insolvency and Bankruptcy Board of India (IBBI). The application IA. 324/2022 was allowed, and IA. 572/2022 was dismissed.