TMI Blog2020 (8) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... d viable. We are not interfering with the commercial wisdom of the COC but what appears to us from the record is that the COC did not consider feasibility and viability of the Resolution Plan in case the plant and machinery are taken away by the Respondent No.3. The Respondent No.3 is still insisting on taking away the plant and machinery and there is already judicial Order in view of Respondent No.3 in this regard - Apparently the Corporate Debtor cannot function without the Ethanol plant machinery. Thus, there was compromise of confidentiality regarding liquidation value which appears to have been known to the Respondent No.2 before submitting the Resolution Plan. Apart from this the plant and machinery were not owned by the Corporate Debtor, and the Resolution Plan submitted on the hypothesis that the plant and machinery would be available for business and explanation is clearly a Plan which is not feasible and viable. Thus, the CIRP suffered from material irregularities and the Resolution Plan approved suffers from feasibility and viability. For such reasons, the Resolution Plan as approved deserves to be set aside - matter remitted back to the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution Plan, issued Public Notice for outright sale of Corporate Debtor as a going concern. The Appellant had also tried to submit his Resolution Plan in the course of CIRP. The Ethanol Plant installed in the premises of Corporate Debtor is owned by Respondent No.3 M/s. Sarvadnya Industries Pvt. Ltd. COC was aware of this as on 12th October, 2018 in 4th meeting, Appellant was not allowed to restart the ethanol plant on the pretext that it is owned by third party who is searching buyer for the plant. On 12th January, 2019, COC shortlisted prospective Resolution Plans. The Resolution Plan of Respondent No.2 SRA was received on 9th February, 2019 and that the Resolution Professional without examining the same, had taken up with COC which was approved on the same date of 9th February, 2019 in the 8th COC meeting and the Plan suffers from feasibility and viability. The Respondent No.5 (RP) committed various irregularities which are material irregularities and hence the Plan should not have been accepted. 5. The Appellant claims that there was no publication inviting Expression of Interest (EOI in short). The Resolution Plan was not examined by the RP as required under Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e/non-executable. It is argued that it is necessary for Adjudicating Authority to be satisfied that the plan has provision for effective implementation. It is added by this Respondent that the SRA has not complied with terms of payment as envisaged in the approved Plan and already MA 3943 of 2019 has been filed by the workers/employees for non-payment of their dues under the Plan and Section 33(4) of IBC has been attracted. It is argued by Respondent No.3 that on 09.02.2019 within a span of two and half hours, the exercise of examining and acceptance of the Resolution Plan under Section 30(2) and 30(4) of IBC was carried out by RP and COC. Thus, feasibility was not there, was not noticed. 8. The Respondent No.5 Resolution Professional has argued to defend the CIRP conducted. According to him, the COC has approved the Resolution Plan and there can be no interference in the commercial wisdom of COC as held in the matters of Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta Ors. (2019 SCC OnLine SC 1478) and K. Sashidhar v. Indian Overseas Bank and Ors. (2019 SCC Online SC 257). The RP claims that there was compliance of Section 30(2) of IBC. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 2019. According to the record, COC appointed two Valuers on 27th March, 2018 for getting the liquidation value and fair value. As per procedure, when such value is received, the average of both is taken as fair value or liquidation value (as the case may be). Form H (Page 394) mentions liquidation value as ₹ 13.53 Crores. Resolution Plan Annexure A-34 (Page 314 @ Page 332) shows SRA calculating Payment Terms with liquidation value exactly as ₹ 13.53 Crores. Apparently SRA knew it. We find it difficult to digest the argument of the Resolution Professional that the exact liquidation value stated by the SRA is mere coincidence. We reject the argument of SRA that it got its own valuation done. No material is shown in this regard. As regards the photocopy of email copied in the written submission by RP, it is not supported by Affidavit. Apart from that, we have doubts with regard to the manner in which the Plan was processed and put up. The Resolution Plan (Annexure A-34 on 1st Page, Page 314) has printed date of 7th February, 2019. The self-declaration of the Resolution Applicants who are the two partners of Respondent No.2 at Page 342 shows the date as 9th F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding liquidation value which appears to have been known to the Respondent No.2 before submitting the Resolution Plan. Apart from this the plant and machinery were not owned by the Corporate Debtor, and the Resolution Plan submitted on the hypothesis that the plant and machinery would be available for business and explanation is clearly a Plan which is not feasible and viable. The 8th meeting of COC started at 11 A.M. and the Plan had been approved by 2.00 P.M. and there is absence of material of compliance of Section 30(2) of IBC and in the facts of the matter, there is serious doubt of the RP examining it before putting up the same before COC. On the face of record, COC has not considered the feasibility and viability while accepting Resolution Plan having fundamental defect with regard to the backbone itself of factory i.e. the Ethanol Plant Machinery. 13. Apart from the material irregularity of failure of maintaining confidentiality regarding confidentiality of liquidation value, there is another irregularity in the CIRP. This is with regard to non-publication of Notice inviting expression of interest. Regulation 36A as applicable at the concerned time, required issuing a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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