TMI Blog2018 (6) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. When he was asked why he appointed 22 representatives to monitor the corporate debtor he would say that when he took over the company the management and workmen were not responsive to provide information and to ascertain the correctness of the information he appointed them. The above said discussions leads to a conclusion that ld. RP not taken any care to ensure that such resolution costs are not unreasonable as per Regulation 27. So also not strictly followed Reg. 21(3) of IBBI(IRP for Corporate Persons) Regulations, 2016 in respect of issuing notice of meetings and in violation of the circular outsourced most of his works to his interested persons. This point is answered accordingly. Whether non-consideration of revised offer of resolution applicant Ultra Tech amount to violation of any of the provisions of the I&B Code and Regulations and against the objects of the Code? - Held that:- The revised offer of the Ultra tech is to be considered by the CoC and non-consideration of the revised offer is found not legally sustainable and is against objective of maximization of value as provide in the Code and is in violation of the provisions of the Code and Regulations as discu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he objective of the Code. Order - The period of duration of litigation on account of CA 227/18 and other applications filed after the date of CA 227/2018 stands excluded. The CIR Process is to be concluded expeditiously before 24.06.2018. (ii) The resolution professional is directed to accept the revised offer quoting the bid amount ₹ 1021.70 crores from UltraTech within 3 days from the date of this order and place it along with the resolution plan of Ultra Tech before the CoC. (iii) The CoC is directed to consider the revised offer along with the resolution plan of Ultra Tech by giving an opportunity to have hearing if any for further modification is found necessary and to take appropriate decision bear in mind the object of the Code. (iv) The CoC is also directed to reconsider the resolution plan of RPPL, if the resolution applicant is willing to raise the offer above the offer of Ultra Tech to be placed before it by the RP along with the resolution plan of Ultra Tech. (v) RP is also directed to comply the provisions of the Code and regulations in submitting the revised offer before CoC and in issuing notice to the director of the suspended board of the corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Professional by causing wrongful losses to the Corporate Debtor. He contents that the valuation of the assets of the Company was not properly done. The Resolution Professional acted mala fide and in contravention of the provisions of the I B Code. Despite directions given to the Resolution Professional vide Order in CA (AT) (insolvency) No. 82/2018, dated 09.03.2018 of NCLAT he was not allowed to participate in the CoC meeting from the beginning till the conclusion of the meeting. Whenever certain crucial points affecting the Corporate Debtor arise for deliberation, he was directed to leave the meeting room and to wait outside. Therefore, Section 24 of the Code is violated as well as Regulation 21(3)(a) of the Insolvency and Bankruptcy Regulations for Corporate Persons Regulations 2016. One another serious contention raised by the applicant herein is that the Resolution Professional did not done any work of his own. He delegated all his powers to representatives and appointed so many adviser, legal counsels and evaluators so as to burden the resolution applicant to pay a resolution cost. Majority work of the Resolution Professional has been outsourced so as to claim exorbitant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t CoC and Resolution Professional not to fix the evaluation criteria without applying natural justice and not in fair play. The evaluation process is made known and clearly a sense of fair play in action is demonstrated. The applicant prays for issuing direction to the CoC and Resolution Professional to provide the applicants with the manner of application of the evaluation criteria that form the basis for CoC to take the decision on the H1 in the CIRP of the Corporate Debtor so also prays for ordering investigation against cartelization and even to disclose how a Resolution Professional and CoC has dealt with this disclosure and if not disclosed how Resolution Professional and the CoC has dealt with such non-disclosure and other incidental prayers. CA (IB) No.227/KB/2018 IN CA (IB)No. 210/KB/2018 6. This is an application filed by Ultratech Cement Limited under Section 60 (5) of the Insolvency and Bankruptcy Code 2016 contending that CoC and Resolution Professional are refusing to consider a revised offer which has been made while the process is under way within the period prescribed under Section 12 and that the Resolution Professional would not call for a fresh expres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the various stakeholders of the Corporate Debtor and acted unfairly and arbitrarily ignoring the Applicant who is an eligible competing bidder. 8. Upon the above said grounds the applicant prays for declaring that the entire process adopted by the CoC and Resolution Professional is vitiated that they have acted against the objective of the Code against the interest of various stakeholders of the Corporate Debtor and also acted unfairly, arbitrarily and against the interest of the applicants who is an eligible competing bidder. CA(IB) No. 223/KB/2018. 9. This is an application filed by the State Bank of India, Hong Kong Branch under sub-section 5 of Section 60 of the I B Code with Rule 11 of the NCLT Rules challenging inequality in considering the claim of the applicants at par with the approval of claim of financial creditors. The applicant alleged that 10% of the verified claim by giving a haircut of 90% of the regular valid claim of the arbitrator is highly illegal and challenged the allotment of claim as per the resolution plan submitted for the approval and prays for issuing direction to allow the claim of the applicant bank at par with other similarly placed fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ims have been ignored bypassing the benefit of resolution to the financial creditors of the corporate debtor. The applicants further contends that they were denied of information/documents in respect of bids/resolution plans received by the Resolution Professional and not allowed to participate in the CIRP, not allowed to put their suggestions on the CIRP and not allowed to interact with bidders. The affairs of the Company is dealt with by Deloittee and the CoC and a total of ₹ 37.02 crores is the outstanding debt due to the applicants in total on account of supply of goods, materials and services provided to the Corporate Debtor though the applicant repeatedly demands the Resolution Professional to upload the verified claims admitted by the Resolution Professional of the applicants. He has not bothered to honour the claims of the Operational Creditors of the Corporate Debtor including the applicant and, therefore, the applicants are aggrieved by the action of the Resolution Professional. Resolution Professional is outsourcing most of his work by causing financial burden on the corporate debtor. Upon the aforesaid contentions, the applicants pray for allowing them to interven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gures than the amounts stated in the affidavit filed by them dated 26.03.2018. The applicant further contends that the Resolution Professional did not have a uniform terminology regarding the admission as well as the verification of the claim. The applicant further contends that their claim has not been finally verified and the claim admitted seem not based on the claim of the applicants and that no opportunity to justify the claim of the applicant have been given by the Resolution Professional and, therefore, the plan without providing provision for clearing their dues cannot be approved. The applicant filed this application so as to permit them to intervene in the proceedings and also seeking information from the Resolution Professional regarding the Resolution Plan and in respect of further directions directing the Resolution Professional to permit them to participate in the CIR process. CA(IB)246/KB/2018 14. This is an application filed by the Resolution Professional Mr. Vijaykumar V. Iyer under Sections 30 and 31 of the Insolvency and Bankruptcy Code, 2016 (in short I B Code) read with Regulation 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as per the evaluation criteria and after getting advice from the advisers and legal counsel appointed by the CoC and after due deliberation and interaction with prospective resolution applicants, CoC in the meeting held on 27.02.2018 was able to identify one among the six Resolution Plans submitted before the CoC for consideration by the Resolution Professional as the resolution plan scored the highest in terms of the evaluative parameters set out and finalized by the CoC in the evaluation matrix. Accordingly, as per the meeting of the CoC convened on 27.02.2018, CoC desired to continue the process with the Resolution Plan of Rajputana Properties Private Limited (RPPL). The CoC had extensive negotiation and consultation with the H1 Resolution Applicant and after getting clarification from the applicants, after due deliberation, the H1 Resolution Plan put for voting in the meeting held on 14th March 2018. The CoC with voting percentage of 99.43% approved the Resolution Plan of H1 applicant. 10.53% of the CoC which voted in favour of the Resolution Plan also recorded a protest note alleging that they had not been dealt with equitably when compared with other financial creditors w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the revised offer not being considered by the Resolution Professional and the CoC not at all deserve any merits. So-called substantial revised bid offer by the Ultratech Cement Ltd. dated 8th March 2018 could not have been considered as a valid bid. The applicant has been heard while his Resolution Plan has been taken into consideration by the CoC on 23.02.2018. CoC had discussed the plan of all applicants in the meeting held on 23.02.2018 in the presence of respective resolution applicants and in the meeting held on 27.02.2018 the 2nd respondent's Resolution Plan (RPPL) has been declared as H1 by the CoC in terms of the process document and the evaluation criteria issued as per CVC guidelines and the IBA Circular. 23. As per the decision of the CoC, there could not have been any negotiation with any other resolution applicant other than H1 Resolution Applicant which can be deployed for voting under Section 24 of the Code and that the Resolution Plan has been tabled for voting and approved with a majority of 99.43%. In such a situation, only if the Letter of Intent is not accepted by the R2 and it fails to give a Performance Bank Guarantee can, therefore, put in action fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de a resolution plan but was merely an e-mail as sent with an offer; Second, that the offer was not made in accordance with the process document and to consider it would be a deviation of the process laid down in the process document by the CoC. Third, that the offer was beyond the time as stipulated under the IBC. Upon the said reasons, the CoC decided not to consider the revised offer. The RP has complied all the provisions of the IBC while dealing with the applicant and therefore there cannot be any grievance of the applicant in respect of non-consideration of revised offer. The contentions raised by the applicant is mala fide. 25. The resolution professional also filed detail reply affidavit in CA(IB) 201/KB/2018 challenging maintainability of the application filed by the applicant and that the applicant who is a member of the suspended board of directors of the corporate debtor filed the application with mala fide, without merit and has been made to derail the entire CIRP. The resolution professional contends that he safeguard the enterprise value of the corporate debtor and uphold the interest of all the stakeholder as an ongoing concern and have discharged his duties as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution professional, its contentions in brief is the following:- 28. The H1 Resolution Applicant namely Rajputana Properties Private Limited challenged the application filed by Ultratech Cement Limited. Ultratech filed the application so as to protract the process. All the applications filed by Ultratech Cement Limited contained false and frivolous contentions are liable to be dismissed in limine. The respondent denies all the averments raised by the Ultratech Cement Ltd., in this application. The applicant is only attempting to push the Corporate Debtor in the liquidation by creating obstructions in completion of the Corporate Insolvency Resolution Process of the Corporate Debtor. The RPPL is a successful bidder in the already concluded bidding process carried on for resolution applicants for the Corporate Debtor in terms of the provisions of the Code 2016. The application filed by Ultratech Cement Limited contains false and frivolous contentions and for the said reason alone it is liable to be dismissed in limine. The contentions of the Resolution Applicant that its revised offer not being considered by the Resolution Professional and the CoC not at all deserve any merits. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It is not open to the Applicant under the IBC to seek judicial review of the commercial decisions of the CoC taken during the course of the insolvency resolution process. Besides, IBC does not permit a resolution applicant any right to interfere in the CIRP and thus the Applicant has no locus standi to question the decision of the CoC and also call for records of the RPs and CoC. The CoC took a majority decision in declaring Respondent No. 2 as H1 bidder which can now not be called into question by the Applicant. The entire bidding process undertaken by the Respondent No. 1 is in accordance with law and all procedural norms. It is in compliance with the Process Document and guidelines prescribed by the Central Vigilance Commission (CVC) and Indian Bank Association and therefore, the Applicant is acting in mala fide manner in objecting to the negotiations already undertaken. The Respondent No. 2 has received the approval of the Competition Commission of India on 7th March, 2018 for completing the CIRP which authenticates the resolution process considered by the CoC. It is also submitted that the Applicant had not challenged any part of the evaluation criteria issued on February 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and applicable provisions of the I B Code and Regulations the points that arise for our determination are the following:- i) Whether the resolution professional exceeds his power in appointing professionals, outsourced the work in violation of circular No. IP/003/2018 issued by the IBBI and incurred exemplary cost in violation of any of the provisions of the Code and Regulations and circular? ii) Whether non-consideration of revised offer of resolution applicant Ultra Tech amount to violation of any of the provisions of the I B Code and Regulations and against the objects of the Code? iii) Whether there is any discrimination against the unsecured financial creditors at par with other financial creditors and the Resolution Plan submitted for the approval is contrary to the scheme of the I B Code 2016? iv) Whether the resolution professional ignored any of the operational creditors claim and not honoured their claims as alleged by the Operational Creditors? Point No (i). 35. One of the directors of the corporate debtor filed three applications [CA(IB) No. 201/KB/2018, CA(IB) No. 245/KB/2018 and CA(IB) No. 234/KB/2018) mainly alleging mismanagement of the Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such meeting. (5) . Regulation 21(3) (3) The notice of the meeting shall- (a) contain an agenda of the meeting with the following: (i) a list of the matters to be discussed at the meeting; (ii) a list of the issues to be voted upon at the meeting; and (iii) copies of all documents relevant to the matters to be discussed and the issues to be voted upon at the meeting; and (b) state that a vote of the members of the committee shall not be taken at the meeting unless all members are present at such meeting. 37. A reading of Section 24(4) of the Code shows that it provides right of participation to the directors in the meeting of CoC. As per the proviso to section 24(4) despite notice if a director did not attend the meeting his absence shall not invalidate proceedings of such meetings. Here in this case, the director approached the Bench and to the Hon'ble NCLAT alleging denial of opportunity to attend in the meeting of CoC and vide order in CA(AT) (Insolvency) No. 82 of 2018 the Hon'ble NCLAT allowed him to participate in the meeting of CoC. Vide Regulation 21(3) (a) of IBBI (IRP for Corporate Persons) Regulations, 2016 the notice to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the corporate debtor raised serious objections against the RP from the inception of the CIRP till the conclusion of CoC meeting held on 14.03.2018. The Director challenges the valuation of the assets of the Company, appointment of legal advisors at an exorbitant fees, appointment of Deloitte LLP firm for auditing the daily cash flow of the corporate debtor company, appointment of Deloittes persons, who are his related partners, as his representatives for the management of the company, outsourcing of most of the work to persons from Deloitte, delegation of all his work to other interested persons. He further submits that RP gets insured his life for huge amount for no life threat existing. RP appointed legal counsels for exorbitant fees, appointed facilitators and Evaluators for the work he has to do in persons at the approval of the CoC. The applicant demonstrated some of the payment which according to the applicant causes wrongful loss to the corporate debtor and gain to himself. The table below would demonstrate some of the rate of cost and fees spent by the RP. It is pertinent to note here that CoC approved all the expenses. Name of the Consultant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10K/hr per lawyer Managing Partner ₹ 15k/hr involved since December 2017 16/1/2018 8th CoC - Agenda 12 Holtech technical consultant (3 people) Plant operations mktg 14.5 14.5 Alvares Marshall Evaluation of bids 200 16/1/2018 8th CoC - Agenda 11 Luthra Luthra - Legal Consultant Assistance with submission to the NCLT 11.5 11.5 Rs.57.5 lakhs for 5 months (Rs. 11.5 lakhs per month subject to cap of 100 hrs) Tuesday - 22/8/2017 - Agenda Hari Bhakti Forensic 17 17 Onetime 17/11/17 - 5th CoC - Agenda 8 RP facilitator Deloitte TTILLP 240 240 4/10/2017 - 4th CoC Agenda 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the expense of the Government to facilitate the insolvency resolution process; and (e) any other costs as may be specified by the Board; 28. As per 5(13) (a) any other costs as may be specified by the board. Now it is also specified as per the following Regulations in Sh. 1 of IBBI (Insolvency Professionals) Regulations, 2016. 25. An insolvency professional must provide services for remuneration which is charged in a transparent manner, is a reasonable reflection of the work necessarily and properly undertaken, and is not inconsistent with the applicable regulations. 26. An insolvency professional shall not accept any fees or charges other than those which are disclosed to and approved by the persons fixing his remuneration. 27. An insolvency professional shall disclose all costs towards the insolvency resolution process costs, liquidation costs, or costs of the bankruptcy process, as applicable, to all relevant stakeholders, and must endeavour to ensure that such costs are not unreasonable. 41. It is also good to read Sub. reg. 7 of Sh. 1 of IBBI (insolvency professionals) Regulations. It reads as follows:- An insolvency professional shall not take up an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure that such resolution costs are not unreasonable as per Regulation 27 referred to above. So also not strictly followed Reg. 21(3) of IBBI(IRP for Corporate Persons) Regulations, 2016 in respect of issuing notice of meetings and in violation of the circular outsourced most of his works to his interested persons. This point is answered accordingly. Point No ii. 43. Ultra Tech Cement Limited a resolution applicant who has submitted its resolution plan for participating in the bidding process rushed to this Tribunal with three applications, CA (IB) 210/KB/2018, CA(IB) 227/KB/2018 and CA(IB) 233/KB/2018. The very challenge of applicant in CA(IB) No. 210/KB/2018 is that the evaluation criteria as applied were to result in more than one resolution applicant coming close in scoring is not permitted to participating in the bidding process amount to violation of the mandate of maximizing the value. ld. Sr. Counsel appearing for the applicant submits that the resolution plan of Ultra Tech Cement Limited not considered by the RP and reason for non-consideration of the plan not communicated to the applicant. According to him shortlisting of the resolution plan was done not in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the evidence that even after 06.03.2018 negotiation has been undertaken in respect of H1 resolution applicant and the H1 resolution applicant revised its offer on 07.03.2018 and submitted a revised resolution plan. That plan was approved by the CoC in the meeting held on 14.03.2018 despite pendency of the said CA as well as one another CA(IB) 227/KB/2018. Moreover, it has come out in evidence that Ultra Tech revised offer is much more the bid amount approved by the CoC in the resolution applicant's plan under challenge. Then how can it be viewed that Ultra Tech attempt is to see that the corporate debtor is to push to liquidation? 47. According to the ld. Sr. Counsel Mr. Mukul Rohatgi for the applicant what the applicant submitted is a substantially revised bid offer on 8th March 2018 and the Resolution Professional did not consider the revised offer and thereby caused great prejudice to the applicant. Pending the CA(IB) No. 210/KB/2018, the resolution applicant filed CA(IB) No. 227/KB/2018 challenging non-consideration of the revised offer which has been filed 43 days before the date of expiry of the CIRP and filed CA(IB) No. 233/KB/2018 on 16.03.2018 for setting aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvanced by ld. Sr. Counsel for the Ultra Tech, submitted that there is no merit in the arguments advanced on the side of the Ultra Tech and referred the evaluation scoring given to the resolution applicants. According to him as per the clarifications, qualitative parameters 4/6 the Ultra Tech applicant did not produce proof to prove that no adverse regulatory order has been passed against it by any regulatory authority within the last 5 years and thereby scored less 1 marks than that of the H1 applicant and that the bid amount is less than that of the H1 applicant and therefore there is no irregularity or arbitrariness in classifying Ultra Tech below the rank given to H1 applicant. 51. In reply to the said submission, ld. Sr. Counsel for the applicant submits that it has got Competition commission of India (CCI) approval and that the order of CCI refereed to in the scoring was stayed and therefore said classification doesn't arise at the time of submission of revised offer. Admittedly at the time of classification of resolution applicants application as not H1 on 27.02.2018 an adverse order of regulatory authority was in force. So also bid amount offered by the Ultra Tech in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the RP submits that upon the following objections the CoC decided not to consider the revised offer of Ultra Tech. The objections as given in his reply affidavit read as follows: (i) That the revised offer was sent by way of merely an e-mail; (ii) (ii) That the offer was not made in accordance with the process documents and to consider it would be a deviation of the process laid down in the process document by the CoC. (iii) That the offer was beyond the time stipulated under the IBC 54. None of the above objections are substantive objections which can be raised in a case of this nature where the RP as well as CoC is duty-bound to ensure maximization of value within the time frame prescribed by the code. Such an object in finding out a bidder who can offer maximum bid amount so as to safeguard the interest of all stakeholders of the corporate debtor is lacking in the case in hand from the side of the RP as well as from the side of the CoC. The first objection for non-consideration of revised offer is because it was offered through an e-mail. Mode of submission of revised offer by way of e-mail not at all prohibited by the Code, Regulations and the Rules. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is sufficient time left to convene a special meeting of CoC. It is also significant to note here that EXIM bank demands for convening a meeting for taking a decision about the revised offer of UltraTech. In the light of the said discussion, we have no hesitation in holding that non-consideration of revised offer by the RP because it was sent by e-mail violate the object of the Code and absence of taking an independent decision in this regard by RP is in violation of Regulations. 56. Coming to the second objection in not considering the revised offer of the applicant that the offer was not made in accordance with the process document and to consider it would be a deviation of the process laid down in the process document by the CoC does not inspire our confidence. The resolution plan by the applicant has been submitted in time and admittedly all the resolution applicants were given liberty to rectify certain errors in order to come within the purview of the provisions of the Code and Regulations. It is thereafter the CoC considered all the resolution plans of the resolution applicants at a meeting held on 23rd February, 2018 and in that meeting, truly, all the resolution applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence it filed the CA. It is in the said background let us see any merit in the second objection submitted by the ld. Counsel for the RP. 58. The reason that the process document does not permit the resolution professional and the CoC in considering the revised offer of the applicant have no legal force at all. Even if the process document restricts CoC and the Resolution Professional which has been made by the CoC for their own convenience and for guidelines to the resolution applicant as well as to the Resolution Professional that is not a ground to deny a participant right in participating in the bidding process. Even if it is a document give rise certain guidelines it may not supersedes the provisions of the code and regulations. The process document referred to us even if considered as a valid document it does not entirely restrict the CoC from reconsidering a resolution plan which according to it not ranked first. There is no provisions in the Process Document or in the clarification matrix that its makers cannot amend it if necessity arises. 59. The clarification matrix is fixed based on the terms in the process documents. The preface of the Clarifications to Resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause 1.6.1 provides that the CoC have right to accept or reject in or all plans prior to approval of the same by the Adjudicating Authority. A reading of clause 1.6.1 it cannot be held that the CoC's hand is fettered so as to avoid a resolution applicants plan from revising its offers only because it was ranked below H1 applicant. It can accept or reject any plan at any time before the approval of the plan submitted to the adjudicating authority. It is also good to read clause 1.6.2(a) in the process document . It reads as follows: 1.6.2 (a) On receipt of a Resolution Plan submitted by a Resolution Applicant, the Resolution Professional shall review the same for compliance under the IB Code in consultation with his legal advisors and have deliberations with the CoC in relation to the same. Where Resolution Applicant(s) are found to have submitted a Resolution Plan which is not a Compliant Resolution Plan, that is, one which does not meet the provisions of the IB Code or the CIRP Regulations, the Resolution Professional may request the Resolution Applicant(s) to remedy the deficiencies in the Resolution Plan submitted, and submit a Revised Resolution Plan. The Revised Reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y similar to this case. The Hon'ble Principal Bench has held that: The Resolution Plan with Liberty House shall not be rejected on the ground of delay emanating from process document or any other document entirely circulated by the Resolution Professional or the CoC. The rejection shall be on substantive ground as against flimsy work. 65. This proposition is squarely applicable in the case in hand. One among the three objections of the RP is that consideration of the revised proposal would be a deviation of the process document. Such a decision is not at all legally sustainable as held in the above cited decision. The said ground for non-consideration is not a substantive ground but is a flimsy ground. Much argued by the ld. Sr. Counsel for the H1 bidder and CoC that process document deviation by the CoC may call for litigation and to avoid the possibility of complaint and for upholding its transparency the process document was framed. We do not find any merit in the said submission upon the reason already led in. In view of the abovesaid discussion we also hold that the second objection for non-consideration of revised offer is devoid of any merit. 66. The third o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prescribed on the basis of CVC and IBA is followed by the RP in disregards to the provisions of the code and Regulations. None of these applications could have filed by them provided RP and the CoC taken care in following the process as mandated under the Code. The RP forget his fiduciary duty owed by the lenders to stakeholders without any discrimination. His name as an RP is proposed by the applicant in the CP who is a lender. Can he is loyal to the lenders because of his name was proposed by a lender? Here in this case the RP not taken any independent decision of his own before placing the plans before the CoC. It cannot be ruled out that there is undue influence over him by the lenders who has larger voting share. 68. The very object of the Code is on revival and rehabilitation of the Corporate Debtor who is sinking for reason of non-payment of dues in time. The object of the Code is not to liquidate the business of the Corporate Debtor. What we expected from the Resolution Professional and also from CoC is fair and transparent process in finding out a bidder who can satisfy all the claims of the lenders and operational creditors in a transparent manner without giving a ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing in the Code or Regulations to prevent the CoC from considering a revised offer of another applicant. It is significant to note that on 14.03.2018 when the Ultra Techs application came up for consideration before this Adjudicating Authority the CoC passed the disputed resolution plan disregards to the outcome of the application. 71. In this regard, it is also good to look into the minutes of the CoC in the meeting held on 14.03.2018. Some of the financial creditors, namely, EXIM Bank, Canara Bank as well as SBI Hong Kong requested the CoC to consider the revised offer of Ultra Tech received by all of its members of the CoC by email dated 08.03.2018. Though their request has been discussed in detail, no decision regarding the rejection or reconsideration of the application of the Resolution Applicant, Ultra Tech had been taken out. The Canara Bank stated before the CoC that if money is coming high, one must try. The representative of the Canara Bank further stated that process is not that important that outcome has been forgotten. If there is a value addition by INR 700 crores, (vide revised offer the Ultra Tech offered INR 700 crores in addition to the offer already made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plan proposes only 72.59% of its verified claim and arbitrarily gave a haircut of 27.41% of the legal and verified claim of the applicant. The 'applicant claims that the liquidation value payable to unsecured financial creditors is nil and upon subrogation would not be sufficient to recover amounts paid to the applicant. The Resolution applicant proposed to make 52% payment in the initial plan and 72.5% payment in the later plan. The applicant further contends that there is no concrete basis for such discrimination against the applicant at par with other financial creditors and the Resolution Plan is contrary to the scheme of the I B Code 2016. According to the ld. Counsel the practice of allotment of claim raised serious doubts about the process and, therefore, the applicant filed this application seeking directions. According to ld. Counsel the Ultratech Cement Limited also given revised proposal which may satisfy all the stakeholders but the CoC did not consider its request to negotiate with the Ultra Tech and since if it vote it would be an economical loss to the Bank and hence opted for vote fearing descenting creditors would get nil as per the Code. 75. Both Banks are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y impugned order. The said withdrawal order was on 08.03.2018. At this juncture, ld. Counsel for the EXIM Bank cited a decision of Hon'ble Supreme Court in Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association [1992] 3 SCC 1 Cinod Secretariat, Madras for highlighting an argument that when an appeal challenging an order is withdrawn recoding that right of appellant in raising the very same challenge against the impugned order is barred, its effect is restoration of the order under 'challenge and this Adjudicating Authority's order become in force as if there is no challenge. It is good to read the following observation in the above cited decision. It read as follows:- While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 30(4) of the Code. Any resolution applicant who can satisfy the claim of EARC and IDBI can get an approval of its plan by a majority of votes share is a fact brought to our notice and no consideration of very similar financial creditors at par with IDBI add strength to the submission of the ld. Counsel for the above referred Banks that practice of allotment of claim is not based on any concrete basis or norms. So no doubt it amount to discrimination against the above refereed two banks. In the above said view we find some force in the argument advanced on the side of the Banks and satisfied that the plan under dispute requires modification. This point is answered accordingly. Point No. V 78. By filing CA(IB) No. 248/KB/18, eight(8) operational creditors jointly challenged the plan alleging that their claim was totally ignored by the RP and no attempt was made from the side of the RP to provide proportionate benefit to the operational creditors. According to the ld. Counsel, Mr. Jishnu Chowdhury restructuring of the debt as per the plan only passes the benefit to the financial creditors and therefore no equitable consideration in respect of all the claims of al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Professional has no force at all. According to ld. Sr. Counsel for the R.P., all the admitted claims of Operational Creditors were considered by the Resolution Professional. However, on a reference to the resolution plan the clarifications submitted on the side of the Resolution Professional seems to be not true. However, the ld. Sr. Counsel appearing for the RPPL, the resolution applicant submits that the resolution applicant has been furnished data regarding admitted verified amount of 2,980 Operational Creditors and that 2941 operational creditors whose dues have been verified by the Resolution Professional not exceeds Rupees One Crore is offered 100% payment and those Operational Creditors' dues varied from ₹ 1 crore to ₹ 5 crores offered maximum 40% of verified amount of ₹ 1 crore and operational creditors, whose dues exceeded ₹ 5 crores and less than ₹ 10 crores maximum 25% of verified amount of ₹ 2 crores are offered and that those dues exceeding an amount of more than ₹ 10 crores, maximum 5% of value of ₹ 2.5 crores are proposed. As per the plan, the total verified amounts of Operational Creditors not exceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 79. The above provision must be read along with Reg. 37(1) and 38(1) (b) of IBBI(IRP for Corporate Persons) Regulations,2016. Reg. 37(1)(f) provides reduction in the amount payable to the creditors . 38(1)(b) says liquidation value due to operational creditors and provide for such payments in priority to my financial creditor which shall in any event be made before the expiry of 30 days after the approval of a resolution plan by the Adjudicating Authority . 80. Thus RP is bound to see that all these requirements meets by a resolution applicant before the plan is placed before the CoC. It is good to read Reg. 39(2). it read as follows: (2) The resolution professional shall present all resolution plans that meet the requirements of the code and these Regulations to the committee for its consideration. 81. A reading of above referred provision shows that a resolution plan can be accepted even if there is reduction in the amount payable to the creditors. It is significant to note that the said reduction is in general applicable to all class of creditors. So reduction in regarding restructuring of debt is applicable to financial creditors, unsecured creditors and operational c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the RP by referring to the resolution plan submits that out of the said total claim undisputed amount of ₹ 240635112/- is admitted by the RP and that amount is included in the plan for clearance. According to the ld. Sr. Counsel for the RP the remaining amount is disputed and an appeal is pending before the appellate authority and it is why the entire claim is not included. So it appears to us that statutory dues due to the Dy. Commissioner of Income Tax seen taken care of by RP. 83. To sum up, we find the following proved factors:- The representatives of suspended board of directors were not allowed to attend some of the meetings where issues regarding the corporate debtor was discussed. Though as per the directions from NCLAT and this Bench directors were permitted to attend the meeting under section 24(3) of the code, they were not permitted to attend the meeting till the meeting is completed. RP also violated section 21(3) of the code. In regards resolution cost it appears to us that Reg. 25 of Sh.1 of IBBI (Insolvency Professionals) Regulations, 2016 is violated. So also Reg.27 is not strictly followed. No effort seems to have taken by the RP so as to ensure th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s moved for sanctioning such a scheme which might have got the requisite majority support of the creditors or members or any class of them for whom the scheme is mooted by the concerned company has to act merely as a rubber stamp and must almost automatically put its seal of approval on such a scheme. It is trite to say that once the scheme gets sanctioned by the Court it would bind even the dissenting minority shareholders or creditors. Therefore, the fairness of the scheme qua them also has to be kept in view by the Company Court while putting its seal of approval on the concerned scheme placed for its sanction . 85. The above said proposition is squirely applicable in the case in hand. Approval of the plan of RPPL doesn't satisfy larger claim of operational creditors and not satisfy some of the unsecured financial creditors claim. On the other hand the revised offer of Ultra Tech if approved by the CoC it would satisfy the claim of all the stakeholders. For the said reason also we are not bound to approve a resolution plan when we are satisfied upon relevant material regarding availability of a better resolution if RP is directed to have reconsideration of both plans und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure balancing the interest of all the stakeholders and order of priority of payment of Government dues. The adjudicating Authority is facing too much interruptions from various stakeholders. Till date we never come across any frivolous applications. All comes with some genuine grievance. All challenges the independence of the resolution professional and lack of transparency, competency and arbitrariness in the matter of resolution process. In the case in hand 12 applicants come forward challenging the process only for not following the process mandated under the Code by the resolution professional. The arbitrary way of dealing with the cases has always led to interruptions and also causes delay in disposal of like case. Here, in this case the resolution professional is a chartered account by profession. However he failed to take business decisions so as to run the corporate debtor by his own. He managed to run the company by appointing about 22 representative who are from his own partnership. Truly running an insolvent company pending exploration of a resolution process by him alone is not an easy task. A resolution professional like the RP in a case of this nature need some bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to raise the offer above the offer of Ultra Tech to be placed before it by the RP along with the resolution plan of Ultra Tech. It is made clear that if both resolution applicants if willing to participate in the bidding process CoC is expected to allow both resolution applicants in the bidding process and which is best for revival of the corporate debtor is to be decided by the CoC. (v) RP is also directed to comply the provisions of the Code and regulations in submitting the revised offer before CoC and in issuing notice to the director of the suspended board of the corporate debtor and notice also is to be issued one among the operational creditor who filed the above referred application as a representative if the requirement of section 24 (3)(c) of the Code is satisfied. 2. Since we are inclined to allow the above applications, we are dismissing CA(IB) No. 245/KB/2018 filed by the director praying for issuing injunction restraining EARC from making any claim in excess of ₹ 2594.24 crores on the strength of master restructuring agreement evidently recalled by the EARC as it is also not maintainable. 3. CA(IB) No. 246/KB/2018 is dismissed. 4. In view of directi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The applicant contends that none of the parties in the main application will be prejudicially affected if direction for impleadment as sought by the CoC are allowed. Upon the said contentions it prays for impleading the CoC members as an additional respondent to the CP (IB) No.359/KB/2017. We have given ample opportunity to the ld. Counsel appearing for EARC and the CoC for submission of their arguments in respect of hearing of all the CAs and considered their arguments. Accordingly, this CA for impleading them so as to contest the CAs doesn't arise. Therefore, this CA is dismissed. However, no order as to cost. CA (IB) No.244/KB/2018 This is an application filed by Mrs. Visalakshmi Sridhar the Company Secretary of the applicant/Binani Industries Limited under Sub-Section 5 of Section 60 of I B Code, 2016 read with Rule 11 of the NCLT Rules, 2016 challenging the resolution process initiating at the instance of the Resolution Professional and the CoC. The applicant challenged that the Directors of the CoC has not been given proper access to the CoC meeting so as to avoid him in respect of taki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under any of the provisions of the code in recalling order of admission upon settlement of the dues liable to be paid by the corporate debtor and this Adjudicating Authority under inherent power can recall the order of admission. We are not at all convinced by the argument advanced on the side of the applicant. Applicant is a holding company of the corporate debtor. Its attempt to settle the dues by attempting to approach the Hon'ble NCLAT and lastly before the Hon'ble Supreme Court was failed. We too also had given opportunity to explore the possibility of settlement out of this Tribunal by approaching superior Courts. The relief pressed for is settlement by recalling the order of admission. It appears to us that settlement proposal does not fall under the purview of any of the provisions of the code or Regulations. It is a matter which requires to be settled in-between the parties involved. That is even left open to them. But its attempts to settle was become futile may be due to disagreement with some of the lenders. The Adjudicating Authority has expressed that it has no role to play in the matter of settlement process. We have taken judicial notice of granting approv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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