2021 (8) TMI 586 - AT - Insolvency and Bankruptcy

Approval of Resolution Plan - Appellant claims that the CoC and the Resolution Professional acted arbitrarily to suit the vested interests of creditors and in defiance of the objectives of the IBC rejected the Resolution Plan of the Appellant - HELD THAT - The Appeal itself shows that the Appellant had been participating in the CIRP and had on earlier occasion also filed revised plan. The CoC in the Minutes considered e-mail claimed by the Appellant to have been sent on 22nd January 2021 and having considered e-mail decided to proceeded to consider the Resolution Plan which had been submitted clause by clause. The CoC in its wisdom did not find it appropriate to give more time to the Appellant and discussed the Resolution Plan and rejected the same for reasons recorded. These are commercial decisions and we cannot hear the Appellant claiming that he was offering bigger amount and so the CoC should be directed to consider his plan. Section 7 Application was admitted on 8th November 2019 and the order of liquidation came to be passed on 31st May 2021. Keeping Section 12 of the IBC in view and the time frame within which CIRP should be completed we do not find the Appellant making out any case for us to entertain the Appeal if liquidation order has been passed. Appeal dismissed.

Summary

Issues:
Appeal against liquidation order passed by Adjudicating Authority - rejection of Resolution Plan by CoC - Appellant's claim of arbitrary rejection - consideration of pending I.A 1625/2021 - interference in liquidation order - time frame for CIRP completion.

Analysis:
1. The Appellant, a prospective Resolution Applicant, filed an Appeal against the order passed by the Adjudicating Authority approving the liquidation of the Corporate Debtor. The Appellant participated in the Corporate Insolvency Resolution Process (CIRP) and submitted a Resolution Plan, which was revised based on discussions with the Committee of Creditors (CoC). The Appellant claimed that the CoC and Resolution Professional acted arbitrarily in rejecting the Resolution Plan, despite the Appellant offering to pay &8377; 77 Crores against a total debt of &8377; 52 Crores of the Corporate Debtor.

2. The CoC meeting minutes revealed that the Resolution Plan submitted by the Appellant was rejected due to various reasons, including being conditional, lack of financial capability, absence of necessary documentation, and failure to meet prescribed format requirements. The CoC decided not to grant additional time to the Appellant and proceeded to discuss and reject the Resolution Plan based on commercial considerations. The Appellant's argument of offering a higher amount did not warrant interference as observed in a previous Supreme Court judgment.

3. The Appellant filed an application (I.A 1625/2021) seeking an opportunity to present the Resolution Plan before the CoC, which was pending before the Adjudicating Authority. However, the liquidation order was passed before the I.A could be decided, rendering it infructuous. The Appellate Tribunal noted the timeline from the admission of the Section 7 Application to the liquidation order and found no grounds to entertain the Appeal post-liquidation order under Section 12 of the IBC.

4. Citing the judgment in "Arcelormittal India Pvt. Ltd. vs. Satish Kumar Gupta & Ors." by the Supreme Court, the Appellate Tribunal emphasized that Resolution Applicants do not possess a vested or fundamental right to have their Resolution Plans approved. Commercial decisions made by the CoC were upheld, and the Appellant's claim of a larger offer did not justify interference in the impugned order. The Appeal was declined, and the matter was disposed of accordingly.