TMI Blog2021 (7) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, keeping in view the various aspects such as feasibility, viability, credit worthiness of the concerned applicant and the source of funds thereto, etc. There are no irregularity, in the decision of the COC in rejecting the resolution plan of the applicant and approving the resolution plan of the third respondent. It is further to be seen that the applicant was very much invited to all the COC meetings upto 18th COC whereunder his plan was discussed, deliberated and the applicant was asked to improve the same. There are no merits in the application - application dismissed. - IA Nos. 201/JPR/2019 in CP (IB) No. 86(ND)/2017 and T.A. No. 83(ND)/2018 - - - Dated:- 16-7-2021 - Ajay Kumar Vatsavayi, Member (J) And Raghu Nayyar , Member (T) For the Appellant : Mahima Singh, Advocate For the Respondents : Abhishek Anand, Advocate, Party-in-Person, Swadeep Singh Hora and Shivangshu Naval, Advocates ORDER Per : Ajay Kumar Vatsavayi , Member ( Judicial ) IA No. 201/JPR/2019 M/s. Som Distilleries Private Limited has filed this application, mainly seeking to set-aside the decision of the Committee of Creditors (COC) of the corporate debtor M/s. Mount Shival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s being not acceptable to the COC. Thereafter, the COC decided to publish another EOI, based on the same eligibility criteria as earlier. 5. It is further stated in the application that on 31.12.2018 the RP issued another advertisement inviting EOIs from PRAs, for submission of resolution plans. The last date for submission of EOIs was 16.01.2019 and the last date for submission of resolution plans was 26.02.2019. As no EOIs were received during this period, on 21.01.2019, the RP issued another advertisement inviting EOIs from PRAs for submission of resolution plans. The last date for submission of EOIs was kept as 30.01.2019 and for submission of resolution plans was kept as 08.02.2019. On 28.01.2019, the applicant once again submitted its EOI. On 02.02.2019, the RP issued another list of eligible PRAs, which included the applicant, SNJ Distillers Private Limited and Wave Distilleries and Breweries Limited. Even during this stage i.e. third issuance of Invitation EOI, third respondent-Kals Distilleries Private Limited did not submit its EOI. On 06.02.2019, the RP issued the RFRP, including a new Evaluation Matrix, to the applicant. Under the new Evaluation Matrix, the quantitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, to discuss its resolution plan, which was attended by the authorized representative of the applicant. In the said meeting, the RP/COC asked the applicant to once again revise its financial bid. The authorized representative of the applicant sought time for the same and subsequently, the applicant again asked for some more time and an e-mail in this respect was sent on 16.05.2019. The applicant's request was turned down vide e-mail dated 18.05.2019 and on 20.05.2019, the applicant submitted its revised financial bid, wherein the financial outlay was increased to ₹ 32.03 crores. On 25.05.2019, the applicant sent an e-mail stating that even after multiple rounds of negotiations, the COC was negotiating with both the bidders without considering their scores as per the Evaluation Matrix and without declaring any H1. As per the discussions held in the 16th COC meeting, the applicant submitted a revised resolution plan dated 27.05.2019. 9. It is also stated in the application that on 01.06.2019, the COC in its 18th meeting, once again declared the applicant as the H1 bidder. By e-mail dated 02.06.2019, the applicant was asked to submit its final resolution plan by 03.06.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their respective replies and opposed the IA. 13. Heard Ms. Mahima Singh, the learned counsel for the applicant, Mr. Abhishek Anand, the learned counsel for the first respondent-RP of the corporate debtor, Mr. Raunak Bapna, the learned counsel for the third respondent Successful Resolution Applicant and Mr. Shivangshu Naval, the learned counsel for the respondents No. 2, 4 to 7 and perused the pleadings on record. 14. Ms. Mahima Singh, the learned counsel appearing for the applicant-Som Distilleries Private Limited in support of the IA averments, inter alia, raised the following grounds:- (i) The RP and the COC contravened the provisions of the Code and the Regulations made thereunder and rejected the H1 bid of the applicant and approved the H2 bid of the third respondent, illegally, arbitrarily with malafide intentions, bias, collusion. (ii)(a) The fifth respondent M/s. Mahalaxmi Traders which is one of the COC members and having a voting share of 22.24% in the COC, acted in collusion with the third respondent and accordingly, the H1 bid of the applicant was rejected and H2 bid of the third respondent was approved by the COC. (b) Mr. Ashok Chawla is the Proprie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raders, against which the applicant levelled allegations of collusion, malafide intention, conflict of interest, etc., with the successful resolution applicant, still the resolution plan of the applicant could have been rejected with 77.76% and the resolution plan of the third respondent could have been approved with same percentage which is more than the required 66% of voting share either for rejecting or approving a resolution plan. Therefore, the said contention of the applicant need not be considered at all. 17. The learned counsel for the respondent-RP further submits that the commercial wisdom of the COC is paramount in rejecting the resolution plan or approving a resolution plan and the only requirement is that the resolution plan which was approved by the COC should be inconformity with Section 30(2) of the Code, which will be examined by this Adjudicating Authority while considering the application filed by the RP seeking approval of the plan. 18. The applicant has not challenged the order of this Adjudicating Authority dated 04.04.2019 in IA No. 98/JPR/2019 wherein the third respondent-Kals Distilleries Private Limited was permitted to participate in the CIRP and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the CoC muchless of the dissenting financial creditors for not supporting the proposed resolution plan. Whereas, from the legislative history there is contra indication that the commercial or business decisions of the financial creditors are not open to any judicial review by the adjudicating authority or the appellate authority. 22. A bare perusal of the decision in K. Sashidhar (Supra), made it clear that while rejecting or approving a resolution plan, the commercial wisdom of the COC cannot be interfered or modified by the Adjudicating Authority, as long as the resolution plan approved by the COC satisfies the requirements under Section 30(2) of the Code. The Hon'ble Apex Court in K. Sashidhar (Supra) and in various subsequent decisions and also the Hon'ble NCLAT have categorically held that the COC while exercising its commercial wisdom can reject the resolution plan of an H1 bidder and can accept the resolution plan of other bidders, keeping in view the various aspects such as feasibility, viability, credit worthiness of the concerned applicant and the source of funds thereto, etc. It cannot also be said that the terms of RFRP cannot be changed, as long as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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