9911796707
TMI Blog2020 (7) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... ) read with rule 11 of the National Company Law Tribunal Rules, 2016 by the M/s. IMR Metallurgical Resources AG. M/s. Ferro Alloys Corporation Ltd., is under corporate insolvency resolution process and the applicant herein is one of the resolution applicant who submitted the resolution plan. However, the committee of creditors have approved the resolution plan of M/s. Sterlite Power Transmission Ltd. Hence, the applicant is aggrieved by the decision of the committee of creditors and has filed this application before us as an intervening application. 2. The applicant submits that the resolution plan was submitted on November 7, 2019. The committee of creditors sought for revisions and modified version of the resolution plan, meeting the requirements were submitted. The resolution professional by e-mail dated November 13, 2019 at 2.38 a.m. sent an e-mail stating that the resolution plan submitted by this applicant has been rejected by the committee of creditors. The applicant submits that financial bid of this applicant was superior to the other, the committee of creditors has unfairly evaluated the resolution plan, of the other party, contrary to the well accepted objective of maxi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex court in ArcelorMittal India P. Ltd. v. Satish Kumar Gupta [2018] 211 Comp Cas 369 (SC) ; [2019] 2 SCC 1, the hon'ble Supreme Court held that the resolution applicant has no vested right to insist that his resolution plan must be considered. The applicant has further narrated, how their resolution plan is superior in many aspects compared to that of the approved resolution plan of M/s. Sterlite Power Transmission Ltd. The applicant has also cited the judgment of the hon'ble Supreme Court in K. Sashidhar v. Indian Overseas Bank [2019] 213 Comp Cas 356 (SC) ; [2019] SCC Online SC 257 read as follows (page 398) : "On a bare reading of the provisions of the I and B Code, it would appear that the remedy of appeal under section 61(1) is against an 'order passed by the Adjudicating Authority (National Company Law Tribunal)'-which we will assume may also pertain to recording of the fact that the proposed resolution plan has been rejected or not approved by a vote of not less than 75 per cent. of voting share of the financial creditors. Indubitably, the remedy of appeal including the width of jurisdiction of the Appellate Authority and the grounds of appeal, is a creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business as a going concern. Thus, it is clear that when the committee of creditors exercises its commercial wisdom to arrive at a business decision to revive the corporate debtor, it must necessarily take into account these key features of the Code before it arrives at a commercial decision to pay off the dues of financial and operational creditors. There is no doubt whatsoever that the ultimate discretion of what to pay and how much to pay each class or sub-class of creditors is with the committee of creditors, but, the decision of such Committee must reflect the fact that it has taken into account maximising the value of the assets of the corporate debtor and the fact that it has adequately balanced the interests of all stakeholders including operational creditors. This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the committee of creditors has met the requirements referred to in section 30(2) would include judicial review that is mentioned in section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Comp Cas 356 (SC) ; [2019] SCC Online SC 257, the hon'ble apex court has clearly held that the Adjudicating Authority is not empowered to evaluate or interfere with the commercial decision of the committee of creditors, to accept/reject a resolution plan. The relevant paragraphs of the said decision are extracted hereunder (page 394 of 213 Comp Cas) : "As aforesaid, upon receipt of a 'rejected' resolution plan the Adjudicating Authority (National Company Law Tribunal) is not expected to do anything more ; but is obligated to initiate liquidation process under section 33(1) of the I and B Code. The Legislature has not endowed the Adjudicating Authority (National Company Law Tribunal) with the jurisdiction or authority to analyse or evaluate the commercial decision of the CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors . . . Besides, the commercial wisdom of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by the I and B Code. There is an intrinsic assumption that financial creditors are full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under section 30(4) of the I and B Code . . . The provisions investing jurisdiction and authority in the National Company Law Tribunal or National Company Law Appellate Tribunal as noticed earlier, has not made the commercial decision exercised by the CoC of not approving the resolution plan or rejecting the same justiciable. This position is reinforced from the limited grounds specified for instituting an appeal that too against an order 'approving a resolution plan' under section 31 . . . Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resolution professional under section 30(2) of the I and B Code or, at best, by the Adjudicating Authority (National Company Law Tribunal) under section 31(2) read with 31( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned, there is no provision in the I and B Code which empowers the Adjudicating Authority (National Company Law Tribunal) to oversee the justness of the approach of the dissenting financial creditors in rejecting the proposed resolution plan or to engage in judicial review thereof. Concededly, the inquiry by the resolution professional precedes the consideration of the resolution plan by the CoC. The resolution professional is not required to express his opinion on matters within the domain of the financial creditor(s), to approve or reject the resolution plan, under section 30(4) of the I and B Code. At best, the Adjudicating Authority (National Company Law Tribunal) may cause an enquiry into the 'approved' resolution plan on limited grounds referred to in section 30(2) read with section 31(1) of the I and B Code. It cannot make any other inquiry nor is competent to issue any direction in relation to the exercise of commercial wisdom of the financial creditors-be it for approving, rejecting or abstaining, as the case may be." 5. Further, the legal position to the effect that the commercial decision of the committee of creditors is paramount and the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the stand of the applicant, the applicant was given opportunities to revise and submit better plan. Both the resolution applicant were treated at par. In fact, this resolution applicant wanted to participate and submit its resolution plan after the deadline. The committee of creditors has allowed the same and has accepted the plan of the applicant for evaluation. Hence, from the records it is clear that the scoring of the successful applicant is more than that of the applicant. Hence, the allegation of this applicant that there is error in marking of score by the committee of creditors is not correct and not acceptable. The evaluation matrix applied was same for both the parties. The opportunities to submit revised resolution plan was given to both the parties. Both the resolution applicants participated in the meeting. Hence, no discrimination apparently on the face of it. The hon'ble Supreme Court have held time and again that the decision of the committee of creditors in the approval of the resolution plan is paramount and the Adjudicating Authority does not have power to go into the evaluation aspects of the resolution plan. We are satisfied that both the resolution app ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
