2023 (5) TMI 1159 - AT - Insolvency and Bankruptcy

Disqualification of resolution applicant - wilful defaulter of bank - Rejection of Resolution Plan submitted by the Applicant - Appellant submits that on the day when Resolution Plan submitted by the Appellant came for consideration before the CoC, there was no declaration by Union Bank of India as willful defaulter - disqualification under Section 29A of I&B Code - whether the Appellant was disqualified at the time when the Resolution Plan submitted by the Appellant came for consideration? - HELD THAT:- Appellant was not willful defaulter at the time he submitted the Resolution Plan and at the time his plan came for consideration, we cannot lose sight of the fact that by another order dated 20th January, 2022 in IN THE MATTER OF FANENDRA H. MUNOT LTD., WOOD PRESERVERS PRIVATE LIMITED VERSUS LB INDUSTRIES PRIVATE LIMITED [2022 (1) TMI 1370 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI] filed by the RP seeking liquidation, Adjudicating Authority has passed an order on 20th January, 2022 which has been brought on record at page 393 of the Appeal paper Book by the Appellant himself. The order dated 20.01.2022 having not been challenged has attained finality. The Corporate Debtor is in the Liquidation and Liquidation Process has commenced subsequent to the Order dated 20th January, 2022. Liquidation Process having commenced there is no occasion for issuing any direction for consideration of the Resolution Plan of the Appellant.

It is also relevant to notice that according to the Regulation 2B, compromise or arrangement proposed under Section 230 has to be completed within 90 days of order of liquidation. But we having by this order held that order of identification committee declaring the promoters/directors as willful defaulter is not in operation which we have found by order of the date, ends of justice will be served if 90 days period is allowed to the Appellant to submit a compromise or arrangement to the Liquidator.

The order of the Adjudicating Authority dated 20th January, 2022 upholding the decision of CoC declaring the Appellant as ineligible to submit a Resolution Plan under Section 29A is set aside. It is held that Appellant was eligible to submit a plan on the date of its submission as well as on the date it came up for consideration - Appeal disposed off.