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TMI Blog2022 (1) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the Appellant and the 3rd Respondent herein are Resolution Applicants for the Corporate Debtor, having submitted their Resolution Plans pursuant to the expression of interest issued by the Resolution Professional. While so, the promoters of the 3rd Respondent were found disqualified under Section 29A of the Code, on account of the Judgment of the Hon'ble NCLT, Hyderabad Bench, dated 18.08.2020. 3) Aggrieved by the said disqualification, the 3rd Respondent filed IA/968/2020 before the Adjudicating Authority. The Adjudicating Authority vide Impugned order dated 25.03.2021 directed the COC to take a call on the ineligibility of the 3rd Respondent under Section 29A (e)of the Code and also to consider the revised plan to be submitted by the 3rd Respondent. 4) The Learned Counsel for the Appellant contended that the Impugned Order passed by the Adjudicating Authority without considering the fact that the Appellants Application in IA/119/2021 challenging the rejection of its (Appellant) Resolution Plan by the COC is pending before the Adjudicating Authority. 5) In the meeting of the COC dated 30th March 2021 the SBI, the Lead Financial Creditor with 90.98% of the voting ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Resolution Plan submitted by Respondent No.3 10) However, this Respondent placed before the members of the COC the revised Resolution Plan submitted by the Appellant at the 11th meeting of COC held on 26.02.2021 for its consideration. However, the SBI one of the members of the COC having majority voting rights of 90.98% rejected the Resolution Plan submitted by the Appellant and directed Respondent No.1 herein to file an application before the Adjudicating Authority to initiate the process of liquidation of the Corporate Debtor. In view of the direction of COC this Respondent filed an application in IA/99/2021 to initiate the liquidation proceedings of the Corporate Debtor under Section 33 of the Code. 11) While so, the 3rd Respondent whose Resolution plan was declared as ineligible by this Respondent filed an IA/968/2020 before the Adjudicating Authority challenging the decision of this Respondent and the Hon'ble Adjudicating Authority on 25.03.2021 disposed of the said Application directing the COC to take a call whether the 3rd Respondent is really ineligible under Section 29A(e) of IBC. 12) The Learned Counsel further submitted that as per the directions of the Adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has been submitted by the Company represented by its Authorized Representative i.e. whomsoever the Company authorises to file its Plan. Since the Resolution plan was submitted by the Company and none of the ineligibility criteria as adumbrated under Section 29A of the Code is attracted and hence the decision of the RP was illegal. The mere observation by the NCLT in proceedings before it under Section 397, 398 of the Companies Act, 1956 does not fall within the ambit of Section 29A of the IBC so as to disentitle this Respondent from being considered. If the RP given any notice to this Respondent with regard to any defect, this Respondent would have cured the said defect. 17) The Hon'ble Adjudicating Authority rightly directed the 2nd Respondent to consider the ineligibility of this Respondent's Plan and the 2nd Respondent considered this Respondent's Plan as eligible SRA. It is further submitted that the Resolution Professional has no power or jurisdiction to decide the ineligibility criteria. The Learned Counsel reiterated the stand, that the Appellant's application seeking impleadment has been dismissed and became final therefore, the Appellant has no locus standi to file this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o consider the objections as taken by the RP. Further, the Learned Adjudicating Authority also directed the COC and RP to consider the revised Plan to be submitted by the 3rd Respondent. We do not find any infirmity or illegality in the order. 20) The stand of the appellant is that the COC has no power to consider the ineligibility of the persons and the Learned Adjudicating Authority ought not to have directed the COC to consider the ineligibility of the 3rd Respondent. In this regard, this Tribunal would like to refer to the applicable Provisions of Law. 21) Section 30 of I&B Code, 2016 empowers for submission of Resolution Plan. Sub Section 1 of Section 30 reads as under: "A Resolution Applicant may submit a resolution plan (along with an affidavit stating that he is eligible under Section 29A) to the Resolution Professional prepared on the basis of the information Memorandum. Sub Section 2 of Section 30 states that "the Resolution Professional shall examine each Resolution Plan received by him to confirm that each Resolution Plan (a) provides for the payment of Insolvency Resolution Process cause in a manner specified by the Board in priority to the (payment) of other debts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a compliance certificate in (Form H of the schedule and the evidence of receipt of performance security required under sub regulation (4A) of Regulation 36B)." FINDINGS: 23) From the above Provisions of Law, it is clear that the Code (IBC, 2016) and the Regulations empowers the Committee of Creditors approving the Resolution Plan and also empowers that it shall not approve a Resolution Plan where the Resolution Applicant is ineligible under Section 29A. In this case, the Adjudicating Authority directed the COC to consider whether the 3rd Respondent is really ineligible under Section 29A(e) of the IBC and therefore directed the COC, which has the power to approve the Resolution Plan and also consider the Resolution Applicant's ineligibility under Section 29A. In accordance with the above Provisions of Law and the Regulations made thereunder, the COC has the power to consider the eligibility/ineligibility of the Resolution Applicant whether they are eligible/ineligible under Section 29A(e) of the Code. The stand of the 3rd Respondent is that the Resolution Professional did not afford any opportunity to cure the defect and Suo moto rejected on the ground of ineligibility which is m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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