TMI Blog2021 (2) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... any other law for the time being in force. Therefore, reluctance and refusal of the Respondent in sharing the copy of the Resolution Plan with the Applicants cannot be faulted. It would not be appropriate or permissible for this Authority to do anything otherwise than what is expressly provided under the Code. Section 30 of the Code provides detailed procedure for submission of the Resolution Plan to the Resolution Professional, presentation of the Plan to the CoC for its approval and approval of the Plan by the CoC by a vote of not less than 66% of the voting share after considering its feasibility and viability, the manner of distribution proposed which would take into account the order of priority among creditors as laid down in sub-section 1 of Section 53 including priority and value of the security interest of Secured Creditors. The Committee shall also examine the viability or otherwise of the Plan in terms of the conditions provided under Section 30. Upon its approval by the CoC the Resolution Plan would have to be submitted to the Adjudicating Authority for its satisfaction and approval. In view of such express provisions in relation to the Resolution Plan it is clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Member (Judicial) Shri V. Nallasenapathy, Hon ble Member (Technical) For the Applicant: Ms. Jane Cox, Advocate with Ms. Subha Nivedha, Advocate For the Respondent 1: Mr. Gaurav Joshi, Senior Advocate with Mr. Rohan Rajadhyaksha, Mr. Dhirajkumar Totala, Ms. Neeraja Balakrishnan, Mr. Nishant Upadhyay and Mr. Hardik Jain, Advocates i/b AZB Partners. For the Respondent 2: Mr. Dhananjay Kumar, Advocate with Mr. Gautam Sundaresh, Mr. Ankush Mathkar and Ms. Annie Jain, Advocates i/b Cyril Amarchand Mangaldas. ORDER Per: Janab Mohammad Ajmal, Member (Judicial) All these Applications with analogous prayers have been heard together and shall abide by the orders pass hereunder: 2. Brief facts leading to the aforesaid Applications may be stated as follows. State Bank of India, one of the Financial Creditors of Jet Airways, (hereinafter referred to as the Corporate Debtor) moved a Petition namely Company Petition No. 2205 of 2019 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code) seeking Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor for default in payment of financial debt. This Tribunal by order dated 20/06/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Resolution Plan and the Respondent by respective Emails dated 20/10/2020, 11/11/2020 and 28/10/2020 refused to supply the copy of the Resolution Plan on the ground of confidentiality. Applicant No. 2 in IA No. 2248 of 2020 however, did not get a response which essentially meant that the Respondent did not intend to supply the same. The Applicants are vitally concerned with the terms and conditions of the Resolution Plan. The same could not be considered confidential vis- -vis the Applicants. The employees of the Corporate Debtor are its assets and are interested in its successful resolution. Any revival plan, for that matter, both in terms of employment and provision for outstanding wages / dues, is vital for their sustenance and mutual benefit. Some of the employees have lingered on the rolls of the Corporate Debtor despite the financial hardships and difficulty it entailed. The Applicants are entitled to know the basis under which the Corporate Debtor is being taken over as a going concern. The Applicants otherwise are secured creditors and would have a share in the sale proceeds in the event of the Corporate Debtor getting wound up. On the other hand, the Resolution Plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion; e. Such other further reliefs that this Hon ble Tribunal may deem fit and proper in the facts and circumstances of this case. 2. IA No. 2125 of 2020: a. That this Hon ble Tribunal be pleased to pass an Order directing the Resolution Professional to furnish the Applicant with a full copy of the entire Resolution Plan approved by the Committee of Creditors on 17/10/2020 And filed in this Honourable Tribunal on 05/11/2020; b. That this Hon ble Tribunal be pleased to permit the Applicant to participate in the hearings and proceedings to be held by this Hon ble Tribunal for approval (or otherwise) of the Resolution Plan, and permit the Applicant to submit written submissions therein grant the Applicant a hearing in the same; c. That pending the hearing and final disposal of the Application, this Hon ble Tribunal may be pleased to not pass any final order for approval (or otherwise) of the Resolution Plan, until the Applicant has been furnished with a copy of the said Resolution Plan and allowed to participate in and be heard in the said proceedings; d. For costs of this Application; e. Such other further reliefs that this Hon ble Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same; e. That pending the hearing and final disposal of the Application, this Hon ble Tribunal may be pleased to not pass any final order for approval (or otherwise) of the Resolution Plan, until the Applicant has been furnished with a copy of the said Resolution Plan and allowed to participate in and be heard in the said proceedings; f. Considering the possibilities of employees and former employees making a suitable offer for taking over and running the Company with the help of investors and the bank and making revised proposals in the interest of justice and fair play as employees are the best bet in the current situation to run the organisation compared to unknown entities which have masqueraded themselves in the garb of financial suitors; g. For costs of this Application; h. Such other further reliefs that this Hon ble Tribunal may deem fit and proper in the facts and circumstances of this Case. 7. The Respondent (RP) has filed separate replies to each of the Applications in similar lines. It is contended that the Applications deserve to be dismissed at the threshold for non-joinder of the Successful Resolution Applicant as a party. The Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the said purpose they are entitled to a copy of the Resolution Plan which would enable them to place their views / opinions on the Resolution Plan. In this connection reference is made to K. I. Shephard v. Union of India: (1987) 4 SCC 431. It was held therein that exclusion of employees from hearing during the scheme of amalgamation of banks had brought about prejudice and adverse civil consequences to them. The rival contention that due to the limited time of moratorium period an opportunity of hearing could not be given was rejected by the Hon ble Court. The postdecisional hearing would not be adequate to meet the ends of justice. In H. L. Trehan and others v. Union of India: (1989) 1 SCC 764, the employees of Caltex Oil Refinery (India) Ltd. had challenged the legality and validity of the order on the basis of which their terms and conditions of services had been substantially altered, causing prejudice. The Hon ble Court struck down the circular on the principle that an opportunity of being heard was not given before altering the terms and conditions of service. It is contended that in the present case the Resolution Plan is likely to alter the terms and conditions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than 10% of the debt. The creditors who are not part of the CoC are only entitled to be informed, within 15 days of the order of the Adjudicating Authority approving the Plan, of the principle or formula for the payment of their debt under the Resolution Plan. The Applicants do not come within the parameters of the persons entitled to peruse a Resolution Plan or being privy to it before the Adjudicating Authority approves the same. In this connection reference is made to Innoventive Industries v. ICICI Bank (2018) 1 SCC 407, wherein Hon ble Apex Court held that the Code in itself is a complete legislation. Thus, rights of the Applicants have to be worked out within the limits provided thereunder. Reference is also made to the decision of this Tribunal in Mr. Anil N. Surwade and others v. Mr. Prashant Jain (IA No. 1033 of 2020 in C.P. (IB) No. 1799 of 2018 decided on 28/09/2020) which has also been confirmed by the Hon ble NCLAT. In Kotak Mahindra v. Parekh Aluminex, (MA No. 1259 of 2018 in CP No. 1262 of 2017) decided on 08.01.2019, this Tribunal held that allowing workmen to be heard at the stage of the approval of the Resolution Plan would tantamount to violation of the Code. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reto and law on the subject. In Mr. Anil N. Surwade (supra) a Bench of this Tribunal, of which one of us was a Member, in a similar matter where some of the employees of the Corporate Debtor sought copy of the Resolution Plan observed as follows: Admittedly the Applicants have been the employees of the Corporate Debtor. They have not been the Members of the Board of Directors of the Company. Their involvement in the Insolvency Resolution Process of the Corporate Debtor is limited to the satisfaction of their claims with regard to the entitlement from the Corporate Debtor. They certainly cannot have any role in the Insolvency Resolution Process nor can they have any involvement in the meeting or deliberation of the CoC. The Hon ble NCLAT in CA (AT) (Insolvency) No. 1006 of 2020 confirmed the order. The Hon ble Apex Court in Sub Inspector Rooplal v. Lieutenant Governor: (2000) 1 SCC 644 while dealing with the issue of overruling of earlier judgment of the Coordinate Bench of a Tribunal observed as follows. 12. At the outset, we must express our serious dissatisfaction in regard to the manner in which a Coordinate Bench of the Tribunal has overruled, in effect, an earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural justice and audi alteram partem. Recourse to principles of natural justice and audi alteram partem can be taken when the provisions made in a statute fall short of the requirement. The Code as already indicated in the Judgment of the Hon ble Apex Court is a complete Code in itself. The constitutional validity of the Code has also been upheld by the Hon ble Apex Court in Swiss Ribbons v. Union of India (2019) 4 SCC 17. 17. The Adjudicating Authority as opposed to a Common Law Forum or Constitutional Courts has to act within the parameters of the Statute under which it functions. The Authority could not, in our considered opinion, digress from the express provisions of the Statute and act in the manner not provided there under or sanctioned by the Statute. The Hon ble Court in Swiss Ribbons (supra) inter alia commented upon the object of the Code in the following words. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganization and insolvency resolution of corporate debtors. Unless such reorganization is effected in a time-bound manner, the value of the assets of such persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he resolution process is to take place again protects the corporate debtor s assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends. Therefore, it would not be appropriate or permissible for this Authority to do anything otherwise than what is expressly provided under the Code. Section 30 of the Code provides detailed procedure for submission of the Resolution Plan to the Resolution Professional, presentation of the Plan to the CoC for its approval and approval of the Plan by the CoC by a vote of not less than 66% of the voting share after considering its feasibility and viability, the manner of distribution proposed which would take into account the order of priority among creditors as laid down in sub-section 1 of Section 53 including priority and value of the security interest of Secured Creditors. The Committee shall also examine the viability or otherwise of the Plan in terms of the conditions provided under Section 30. Upon its approval by the CoC the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors like workmen, employees, suppliers have not been given any representation in the committee of creditors which is pivotal in whole resolution process. In this regard, one of the stakeholders has suggested that committee of creditors may contain operational creditors as well, with some thresholds. In this context, while appreciating that the operational creditors are important stakeholders in a company, the Committee took note of the rationale of not including operational creditors in the committee of creditors as indicated in notes on Clause 21 appended with the Bill which states as under: The committee has to be composed of members who have the capability to assess the commercial viability of the corporate debtor and who are willing to modify the terms of the debt contracts in negotiations between the creditors and the corporate debtor. Operational creditors are typically not able to decide on matters relating to commercial viability of the corporate debtor, nor are they typically willing to take the risk of restructuring their debts in order to make the corporate debtor a going concern. Similarly, financial creditors who are also operational creditors will be given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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