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2021 (3) TMI 1047 - Tri - Insolvency and BankruptcySeeking to withdraw resolution plan after approval - EMD and the Performance Bank Guarantee deposited by the Resolution Applicant to participate in the resolution process of the Corporate Debtor, to be returned or to be forfeited - HELD THAT:- The Resolution Applicant prepares a plan mainly based on the information provided in the information memorandum prepared by the Resolution Professional. The Resolution Professional is required to prepare the Information Memorandum very diligently ensuring that all the information necessary for the Resolution Applicant to prepare a commercially viable and feasible resolution plan suitable to the corporate Debtor be made available in the information memorandum. Therefore, although due diligence is also conducted by the Applicant on its own and the plan prepared is on an "as is where is" basis, unless the information provided in the IM is accurate and up to date, a true and fair evaluation of the status of the Corporate Debtor cannot be made by the Resolution Applicant and he cannot prepare a commercially viable Resolution plan. For this reason the Applicant has kept an option to exit in the Plan itself at sl. No. 5.1.1, reserving a right to withdraw from the Plan. 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. EMD in the form of Bank Guarantee and the Performance Bank Guarantee - HELD THAT:- With the withdrawal of the Plan by the Applicant and the entire CIRP coming to nought, the Applicant should bear a part of the burden of expenses incurred during the CIRP. Also some amount may be lost as the liquidation value of the project may be very low, though however the Applicant has submitted that there is a small gap between what was offered in the Plan and the estimated liquidation value, ie of about ₹ 13 lakh only. - it would meet the interests of justice if an amount of ₹ 75,00,000/- is forfeited in total and the balance amount of ₹ 2,76,32,780/-, is refunded to the Resolution Applicant. Application allowed in part.
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