TMI Blog2020 (7) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... iscrimination apparently on the face of it. Both the resolution applicants were treated at par and equal opportunities were given to submit the plan/revised the plan and to participate in the meetings. There is no discrimination per se - The decision of the committee of creditors to approve the resolution plan of the M/s. Sterlite Power Transmission Ltd., is upheld. Application dismissed. - C. A. (I. B.) No. 160/CTB/2019 connected with T. P. No. 42/CTB/2019 arising out of C. P. (I. B.) No. 251/KB/2017. - - - Dated:- 30-1-2020 - Ms. Sucharitha (R.) (Judicial Member) And Satya Ranjan Prasad (Technical Member) For the Resolution Professional : D. Basu, for REC Ltd. Saurav Panda, Ms. Charu Bansal and Raj Mohanty For the Sterlite Power : Prasenjeet Mohapatra and Junior Standing Counsel, GST for C. A. No. 162 and I. A. No. 176 of 2019. A. N. Das, N. Sarkar and Aamir Khan for the intervenor in C. A. (I. B.) No. 160/CTB/2019. K. C. Satapathy for financial creditor, BOI. Jishnu Saha, Senior Advocate, Rajarshi Dutta, N. S. Auluwalia, Saswat Acharya, Adhish Sharma, A. Mohanty and A. K. Dey for the erstwhile promoters. Lalatendu Mohanty for C. A. No. 92/CTB/2019. Diwakar Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subjective content of the plan. Hence, the subjective reality ought to be looked by the Adjudicating Authority and it is beyond the scope of the committee of creditors. The applicant further states that, resolution plan submitted by the applicant is far superior to that of M/s. Sterlite Power Transmission Ltd. This applicant has shown considerable weightage for payment of operational creditor's dues. However, in the plan of M/s. Sterlite Power Transmission Ltd., there is no such allocation of fund. In support of the claim, the applicant cites Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [2020] 219 Comp Cas 97 (SC), Civil Appeal Nos. 8766-67 of 2019 also known as Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [2020] 219 Comp Cas 97 (SC), sets out the principle of decision of the committee of creditors in approving the resolution plan is paramount is misconstrued. While recognizing that it is the committee of creditors which has to decide, does not set out the principle that this would mean that the committee of creditors can do whatever it prefers. On the contrary, the decision itself shall clarifies the same. Further, the judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to all other debts. Fifth, the resolution plan does not comply with any other criteria specified by the Board. Significantly, the matters or grounds, be it under section 30(2) or under section 61(3) of the I and B Code-are regarding testing the validity of the 'approved' resolution plan by the CoC ; and not for approving the resolution plan which has been disapproved or deemed to have been rejected by the CoC in exercise of its business decision. The hon'ble Supreme Court of India in its judgment in the matter of Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [2020] 219 Comp Cas 97 (SC) held as follows (page 157) : This is the reason why regulation 38(1A) speaks of a resolution plan including a statement as to how it has dealt with the interests of all stakeholders, including operational creditors of the corporate debtor. Regulation 38(1) also states that the amount due to operational creditors under a resolution plan shall be given priority in payment over financial creditors. If nothing is to be paid to operational creditors, the minimum, being liquidation value-which in most cases would amount to nil after secured creditors have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes that this application is only an attempt of an unsuccessful resolution applicant to thwart the corporate insolvency resolution process. The committee of creditors has admitted the resolution plan of Sterlite Power Transmission Ltd. (SPTL) with 95.15 per cent. majority voting share in the committee of creditors 31st meeting. Thereafter, the resolution professional has also presented the said plan for approval under section 31 of the Code before this Adjudicating Authority. The respondent further states that decision of ArcelorMittal India P. Ltd. v. Satish Kumar Gupta [2018] 211 Comp Cas 369 (SC) ; [2019] 2 SCC 1. The resolution applicant does not have any vested right that his resolution plan must be considered. The relevant paragraphs of the hon'ble Supreme Court decisions are as under (page 460 of 211 Comp Cas) : Given the timeline referred to above, and given the fact that a resolution applicant has not vested right that his resolution plan be considered, it is clear that no challenge can be preferred to the Adjudicating Authority at this stage. 4. The respondent further submits that before taking the decision, the viability and feasibility of the resolution plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in section 30(2), when the resolution plan does not conform to the stated requirements. Reverting to section 30(2), the enquiry to be done is in respect of whether the resolution plan provides : (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. The Board referred to is established under section 188 of the I and B Code. The powers and functions of the Board have been delineated in section 196 of the I and B Code. None of the specified functions of the Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution plan under section 30(4) of the I and B Code. The subjective satisfaction of the financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the minority-financial creditors. The fact that substantial or majority per cent. of the financial creditors have accorded approval to the resolution plan would be of no avail, unless the approval is by a vote of not less than 75 per cent. (after amendment of 2018 with effect from June 6, 2018, 66 per cent.) of voting share of the financial creditors. To put it differently, the action of liquidation process postulated in Chapter III of the I and B Code, is avoidable, only if approval of the resolution plan is by a vote of not less than 75 per cent. (as in October, 2017) of voting share of the financial creditors. Conversely, the legislative intent is to uphold the opinion or hypothesis of the minority dissenting financial creditors. That must prevail, if it is not less than the specified per cent. (25 per cent. in October, 2017 ; and now after the amendment with effect from June 6, 2018, 44 per cent.). The inevitable outcome of voting by not less than requisite per cent. of voting share of financial creditors to disapprove the proposed resolution plan, de jure, entails in its deemed rejection . . . Suffice it to observe that in the I and B Code and the Regulations framed thereu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions to be determined as follows : 'Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the committee of creditors, has to be within the four corners of section 30(2) of the Code, in so far as the Adjudicating Authority is concerned, and section 32 read with section 61(3) of the Code, in so far as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar v. Indian Overseas Bank [2019] 213 Comp Cas 356 (SC) ; [2019] SCC Online SC 257'. 6. Further, the respondent submits that the unsuccessful resolution applicant has no locus standi to file intervening application and this application ought to be dismissed. The corporate insolvency resolution process was conducted as per the Insolvency and Bankruptcy Code, 2016 and Regulations therein. The respondent further states that opportunity was given to both the resolution applicants to revise and modify the plan and submit for final approval. Thereafter, the committee of creditors in its prudent commercial wisdom has voted in favour of SPTL with 95.15 per cent. of voting shares. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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