TMI Blog2020 (3) TMI 1390X X X X Extracts X X X X X X X X Extracts X X X X ..... atrix figures are there, that being the special subject, as long as there is no objection from any of the Committee of Creditors over the process of evaluation, if the evaluation matrix discloses marks identifying the best plan, the CoC will have to opt for the best plan provided it is viable and feasible. That is the subject matter of the CoC - In Regulation 39(3), when it comes to second clause, since approval is required to be given to the plan shortlisted, it was approved by the CoC with requisite majority. At this juncture, SSG subsequently coming with an unsolicited plan cannot become an impediment to proceed with the shortlisted plan. Merely by having an open discussion in the CoC meeting and asking about SSG plan by some CoC Members having minority voting in the CoC cannot become a reason to invalidate the plan approved. Moreover, none of the CoC Members who abstained to the voting of CoC have filed any objection before this Bench. The point to be noted, these Applicants have not stated that D P Report is factually incorrect - Once plans are submitted, it is the CoC to take a decision thereafter it is only an intimation to the plan Applicants as to whether their plan i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposing of MA 1785/2019, MA 1770/2019 MA 1750/2019. The points of difference are as follows:- 2. In MA 1785/2019, one of the Resolution Plan Applicants namely SSG Group has assailed the decision of the RP for not short listing its Resolution Plan despite its plan is in compliance with Section 30(2) of the Insolvency and Bankruptcy Code, 2016 (for brevity Code ) and the decision of RP for short listing and approving the CarVal s Resolution Plan as successful Resolution Plan. B) MA 1770/2019 3. In MA 1770/2019, one of the Operational Creditors namely Noble Resources International Pte Limited (in short Noble), having more than 10% of the total debt payable by the Corporate Debtor, assailed the approval of CarVal Resolution Plan dated 19.04.2019 by the CoC on the premise the approval of CarVal plan is in violation of the procedure set out under the Code. 4. On these two applications, the Learned Judicial Member of Bench-II of NCLT, Mumbai allowed both the applications with a direction to the Resolution Professional to convene a meeting of Committee of Creditors afresh on 18.12.2019 and put up both the plans (SSG Group plan and CarVal Group plan) for due diligence an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revise its bid in the first round, when SSG failed in revising its plan to the satisfaction the CoC, the CoC has rightly reissued RFRP so as to invite fresh bids hoping that new bidders would participate in the bidding process, - Incidentally CarVal Group has for the first time participated and submitted better plan showing a quantum jump of more than ₹1000Crore to the earlier plan submitted by SSG Group, of course soon after CarVal filed its plan with a quantum jump over the earlier plans, SSG Group had for the first time increased to match the plan given by the CarVal Group. But that increase also could not match with the plan submitted by Carval. When SSG plan after revision also, has remained inferior to the CarVal plan, the CoC has rightly short listed CarVal plan and rightly informed even SSG that its plan has not been shortlisted. 7. As to application MA 1770/2019 filed by Noble, one of the Operational Creditors, the Learned Judicial Member held that - this applicant having representation rights in Committee of Creditors meeting, the right to attend Committee of Creditors meeting is not a mere procedural formality but an essential safeguard to ensure fairn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Member. To say that I agree with the order of the learned Technical Member, I need not reiterate the reasoning given by the learned Technical Member in dismissing the applications. 10. I hereby further hold that it is not the case of SSG group that the plan presented by them before the CoC on 28.03.2019 is superior to Carval Plan. The only case they canvass is, after their plan not being shortlisted on 29.03.2019, for they have on 16.04.2019 provided another plan far superior to Carval Plan shortlisted on 29.03.2019, which is before approval of Carval Plan on 21.04.2019, their plan subsequently filed being superior, they say, should have been considered and approved instead of approving the Carval Plan. 11. This point has no merit, because by that time, Carval Plan was shortlisted and SSG Group was officially informed that their plan was not shortlisted, therefore question of repeating the process will not arise. It all depends upon the decision of the CoC which plan is viable and which one is not viable, because money coming in via plan and its viability will make difference in payment to them. Moreover it is not to hold out every detail to everybody and take their approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor to insist upon the CoC to allow it to revise its plan until it is accepted by the CoC. If this is the approach there will not be any end for revision of the plans. In the past, though SSG Group was twice asked to revise its plan, it kept on changing figures from one slot to other slot, but whereas when CarVal Plan has come with a quantum jump of ₹1000cr over and above the earlier plan of SSG against first RFRP. Against second RFRP, SSG came out with a plan increasing its plan value, but that is also not superior to the plan of Carval. 16. Once plan is shortlisted, if at all any remedy is assumed to be present, it is only with regard to the procedure, as to the procedure is concerned, in Regulation 39 of the CIRP Regulations it has been categorically mentioned that the Committee of Creditors shall evaluate the resolution plan received under Regulation 39 strictly as per the evaluation matrix to identify the best resolution plan, when evaluation matrix figures are there, that being the special subject, as long as there is no objection from any of the Committee of Creditors over the process of evaluation, if the evaluation matrix discloses marks identify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the same, the objection raised by SSG over not short listing its plan is unsustainable. Once plans are submitted, it is the CoC to take a decision thereafter it is only an intimation to the plan Applicants as to whether their plan is shortlisted or not, it is nowhere mentioned in the Code that Plan Applicants have right to participate in short listing the plan applications. Learned Technical Member has already held in its order that the Committee of Creditors has to record its deliberations on the feasibility and viability of the plans. It has recorded that CarVal plan is feasible and viable for the reasons mentioned there. Notwithstanding the fact that there is no provision of assigning reasons for not short listing; the CoC through its RP has categorically mentioned that the Resolution Plan of SSG is comparatively inferior to the plan of the CarVal. Therefore, the reason for not short listing the plan of SSG is evident in the email intimation. 20. Moreover this Adjudicating Authority is only limited to see as to whether Section 30(2) of the Code is complied with or not. In this case it is true that both the plans are in compliance with Section 30(2) of the Code. When b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Carval Plan, Noble, itself stated that RP on 4th of April 2019 supplied Carval and SSG Resolution Plans to Noble, therefore it could not be said that material papers were not provided to Noble before the meeting dated 9.4.2019. It is a known practice minutes of meeting will be circulated post meeting because there could not be minutes unless meeting is held. It is not the case of Noble that Resolution Plan was not supplied to it and it is not the case of Noble that evaluation matrix was not provided to the Operational Creditor. Noble only complains that evaluation matrix and other details certified by Delph and Phelps (D P) have not been provided to it. Moreover the money i.e. coming into the Company is not even sufficient to the Financial Creditors. Though 2-3 Financial Creditors who are Members of CoC abstained to the voting to the approval of the plan, they have not come before this Bench saying that they are aggrieved either by the approval of the plan or in not short listing SSG plan. 24. In view of the same I am of the view that Operational Creditor is not aggrieved of any of the actions of the CoC. Thumb rule i.e. followed in dealing with civil remedies is, when a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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