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TMI Blog2019 (11) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in the year 2012, was engaged in the business of solar power generation. As per the Power Purchase Agreement (PPA) with GRIDCO, the Corporate Debtor supplied its entire production of power generated at GRIDCO. While so, the control room and inverter room of the Corporate Debtor Company was damaged due to a storm and became non operational. The Corporate Debtor could not restore the plant and hence, the Company was not a going concern and thereby, was not able to pay its debts to its creditors. It is at this juncture, the Application was filed by Mr. Hemant Khaitan under section 9 of the Code. 3. This Application was allowed vide Order dated 18-02-2019, by appointing Mr. Surya Kant Satapathy, as IRP. His name was subsequently approved by the Committee of Creditors as the resolution professional (RP) and the Resolution Professional continued the CIRP process by issuing public announcement on 21-02-2019. He issued publication for inviting of EOI twice, firstly, on 04-05-2019 and subsequently, on 31-08-2019 and also called for Resolution Plan from the list of eligible prospective Resolution Applicants, firstly, on 08-06-2019 and secondly, on 28-09-2019 by fixing last date of subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Fortis Chemicals Private Limited, offered Rs. 11.07 Crores (Rupees Eleven Crores Seven Lakh only) as the resolution bid amount. On getting the plan bid amount from Fortis Chemicals Private Limited, who was ranked as H2, the Committee of Creditors called the H1 bidder, YK Dalmia, for negotiation. The H1 bidder did not agree for raising its financial bid from Rs. 11.06 crores, submitted to the Committee of Creditors on 29-10-2019, and thereby, the offer of H2 bidder, Fortis Chemicals Private Limited, became the highest bid amongst the three and the CoC further discussed with Fortis Chemicals Pvt. Ltd. in regard to terms and conditions and regarding the payment of upfront amount and other amount due to the stakeholders. 7. The Resolution Plan of Fortis Chemicals Pvt. Ltd., was finally considered by the CoC in the evening on 04-11-2019, and the Plan was placed for its approval in the meeting of the Committee of Creditors held on 08-11-2019. After detailed discussions, the CoC with 100% voting by both the Financial Creditors deferred the approval of the Resolution Plan and the terms of the Resolution Applicant to the next CoC meeting and in the 14th CoC meeting held on 11-11-2019, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows :- Step - III: Presentation of Resolution Plans by Resolution Applicants whose compliant Resolution Plans have been submitted by the Resolution Professional to CoC as may be deemed necessary and as advised by the COC. 11. The Ld. Counsel for the RP submits that Step-III is a deemed provision provided in the Resolution Plan Evaluation Process. Complying Step III is at the discretion of the Committee of Creditors and it depends on the choice of the CoC to proceed to negotiate with which Resolution Applicants and the CoC having decided to negotiate with top three Resolution Applicants, as per Step-IV of the Evaluation Process non-compliance Step III doesn't violate any of the evaluation process. As per Steps IV read below the CoC can restrict negotiations with the top three (3) resolution applicants whose resolution plans were rated as highest evaluated compliant Resolution Plans. Step-IV: Negotiations by CoC with Resolution Applicant(s) having the top three (3) Highest Evaluated Compliant Resolution Plan. Top Three Resolution Highest Evaluated Compliant Resolution Plan will be communicated their individual scores. Resolution Applicant(s) will not be communicated sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss before considering our value. Regards Kartik Jain" 15. The RP immediately sent a reply to the said E-mail addressed to the RP, by about 7-29 pm., informing the Applicant that as per the RPEP, the chances for negotiation has been given to top three Resolution Applicants. It is this e-mail reply of the RP is under challenge, contending that the bids have not been open and transparent without giving an opportunity to negotiate or without granting an opportunity of being heard before declaring that the Resolution Applicant is not eligible to participate in the further resolution process. 16. It is argued on the side of the ld. Counsel, appearing for the RP, that the E-mail addressed to him was informed to the CoC but the CoC was unwilling to reopen the process because the willingness expressed on the side of the Applicant is vague and the resolution bid amount even, has not been suggested either orally or in writing. 17. The RP also admits that on 05-11-2019, the very same Applicant issued another E-mail objecting to the Evaluation Process and that E-mail has been replied also by the RP on 07-11-2019. It is significant to note here that the RP has to work in time-bound manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idder in participating the bidding process which it is otherwise entitled to compete" is found unjust and found denied an opportunity to the applicant who had offered much more than the bid amount offered by the H1 bidder. The process was not complete in the said case when the offer was made by the applicant and in the said circumstances this Bench ignoring the highest bid of the applicant is unjust and improper and against the objective of the Code. 20. Truly, scoring not as an H1 bidder is not a disqualification in participating the bidding process by below ranked prospective Resolution Applicant. Here, in this case, the Applicant, Kundan Care products Ltd., is not found a bona fide prospective Resolution Applicant. It has come out in evidence that it had offered half the offer of the three top Resolution Applicants who were ranked first to third. Therefore, non-consideration of the request of the Resolution Applicant/Kundan Care Products Ltd.is found, not at all violative of any of the provisions of the Code and the Regulation, and the RP acted in accordance with the mandate already approved by the CoC and evaluated the plans as per the RPEP. In the above said circumstances it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances above discussed, let me now examine the Resolution Plan of the Corporate Debtor approved by the CoC. The successful Resolution Applicant, Fortis Chemicals Pvt. Ltd., is a Company incorporated in the year 2009, engaged in manufacturing and supplying of synthetic resins, specialty chemicals and alternate fuels to steel plant, automobile industries, refractories industries, foundries, graphite, infrastructure project (Road sector) etc. It is also argued on the side of the RP that the Resolution Applicant is a reputed Company known for its quality, health and safety standards and is a competent bidder who has proved that it is capable of taking over of the stressed assets of the Corporate Debtor. None of the Objectors, other than the unsuccessful Resolution Applicant/Kundan Care products Ltd., came forward challenging the approval of the Resolution Plan. On an overall screening of the Resolution Plan, it is understood that it is a Plan wherein the Operational Creditors have been given 100% of their claim and the Financial Creditors have agreed for 39.50% of their claim. On perusal of the Resolution Plan, inclusive of form H and the compliance certificates of the ld. RP, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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