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2021 (5) TMI 712 - Tri - Insolvency and BankruptcyWithdrawal of Resolution Plan after approval of the plan by CoC and pending approval by this Tribunal - Whether the EMD and the Performance Bank Guarantee deposited by the Resolution Applicant to participate in the resolution process of the Corporate Debtor, be returned to the Resolution Applicant or forfeited due to loss caused for withdrawing from the process at this juncture? - HELD THAT:- It is seen in the case at hand that the Resolution Applicant proposed a resolution plan on an understanding that the land required for generating 20 million saleable units annually was as mentioned in the IM. However, he was informed by the erstwhile Promoters that there was an additional 4th parcel of land, covering 42 acres, in use for the project and which was essential for generating 20 million saleable units. He was informed that 100 acres of land was required for this level of production and 58 acres was not sufficient. The erstwhile CD demanded ₹ 7.50 crore to hand over the 4th parcel of land. This was not brought to his notice earlier in the IM or otherwise. The Resolution plan being based on the details made available to the Applicant under the Information Memorandum, any new discovery that would affect the interests of the Applicant adversely, and entitles the Applicant to decide his participation afresh, bearing in mind the changed situation and the possibility of future losses. The Resolution Applicant cannot be compelled to participate in resolution plan jeopardising its own interest. Even if the information provided by the erstwhile Promoter is incorrect, as mentioned by the RP in his objections, if a doubt is created in the mind of the Applicant with regard to the possibility of losses from the project, backed by an independent consultant's report, we are of the view that he would justifiably not be inclined to carry on as a Resolution Applicant. The Resolution Professional admits in his objections that the erstwhile Promoter had not provided accurate information, as mentioned in the IM and had refused to cooperate, and that he was interested in blocking his efforts to complete the CIRP. In fact it is seen from his objections that in all parcels of land, the information provided is at variance, though he contests the contentions of the erstwhile Promoter. Whatever may have been the reason, either lacuna in estimating the requirement as well as availability of land for generation of power in a manner that is beneficial to the Applicant, or the lack of full and correct information provided by the erstwhile Promoters to the RP, the fact remains that there was a considerable disparity in what was represented to the Applicant regarding the area of land required for generating 20 million saleable units of power, which is required to maintain the Corporate Debtor as a going concern and what is actually required/made available. The Resolution Applicant cannot be compelled to perform and execute the Resolution Plan when he apprehends huge losses, and should be permitted to withdraw the Plan submitted by him for approval of this Adjudicating Authority - Application allowed.
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