TMI Blog2022 (4) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 with a majority of 96.07% votes in the 12th CoC Meeting. The contention of the Learned Counsel for the Appellant is that the Resolution Plan was never communicated to the Appellant herein and that it was sent to the wrong email Id. - HELD THAT:- A brief perusal of the Form B reproduced in para 8 shows that email Id is upavp_emogzb@rediffmail.com. It is also seen from the record that the emails were sent to the Appellant on 26/12/2019, 15/01/2020, 20/01/2020, 22/01/2020, 21/02/2020, 04/03/2020 and 12/03/2020. On 11/08/2020, the Resolution Professional informed the Appellant about the approval of the Resolution Plan vide Order dated 04/08/2020. In a catena of Judgments, the Hon ble Supreme Court has laid down that the commercial wisdom of the CoC is non-justiciable unless it does not comply with the provisions of Section 30(2) of the Code - reliance can be placed in the case of K Sashidhar Vs. Indian Overseas Bank Ors. [ 2019 (2) TMI 1043 - SUPREME COURT ] - The Hon ble Supreme Court in the aforenoted Judgement has observed that commercial decision of the CoC is non-justiciable unless it is in violation of any law for the time being in force. The Adjudicating Authority h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Resolution Professional before the Adjudicating Authority, seeking approval of the Resolution Plan, under Section 31 of the Code r/w Regulation 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Adjudicating Authority approved their Resolution Plan submitted by the Successful Resolution Applicant/M/s. Gautam Builders in consortium with M/s. Rapid Contracts Private Limited. 2. Facts in brief are that Section 7 Application for initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. JNC Construction Private Limited/the Corporate Debtor was admitted by the Adjudicating Authority on 30/05/2019 and Mr. Ajay Kumar Jain was appointed as IRP. As per Regulation 27 of the CIRP Regulations, 2016, the Resolution Professional (RP) appointed registered valuers for valuation of the Security/Financial Assets of the Corporate Debtor and for determination of the fair value and Liquidation Value. The average fair value as per Valuation Report is ₹ 142,70,61,257/- and the Liquidation Value is ₹ 99,89,42,880/-. In the 11th Meeting of the CoC held on 17/03/2019, the Resolution Plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Counsel appearing for the Appellant/ Uttar Pradesh Awas Evam Vikash Parishad, (UP Housing and Development Board) strenuously contended that the Adjudicating Authority has erroneously approved the Resolution Plan without considering the issue whether a property not belonging to the Corporate Debtor can be treated as part of the property for preparation of Resolution Plan in violation of Sections 18(f) (g) of the Code and whether such property which belongs to the Appellant and governed by the Uttar Pradesh Housing and Development Board can be construed to be the property of Corporate Debtor , especially in the light of the fact that there is Higher Purchase Agreement executed between Appellant and Corporate Debtor on 14/12/2009 and the Corporate Debtor had defaulted the payments. There was no service of Notice on the Appellant regarding the CoC Meeting and the Resolution Plan copy was not supplied to the Appellant adversely affecting the rights and interests of the Appellant herein. The Corporate Debtor was liable to pay the quarterly instalment of ₹ 2,07,83,225/- under the Higher Purchase Agreement for a period of 21 quarters, but the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate Debtor vide representation dated 16/02/2019. Even after submitting their Claim which was admitted by the erstwhile IRP, the Appellant continued to pursue their remedies before the District Magistrate and got the said property attached and initiated the recovery proceedings against the Corporate Debtor being fully aware of the moratorium imposed under Section 14 of the Code. RP had to approach the Adjudicating Authority seeking de-sealing of the said property, which relief was granted by the Adjudicating Authority vide Order dated 11/03/2020. The Appellant admitted to exercising multiple remedies despite imposition of the moratorium and in complete disregard of the CIRP Process. RP was constrained to file IA 3688/PB/2020, seeking compliance of the Order dated 11/03/2020 wherein the Appellant has also been made a party. 12 CoC Meetings were held and 4 Resolution Plans were received and after due deliberation and balancing the interest of all stakeholders, the Resolution Plan was approved by the CoC. The Adjudicating Authority has rightly observed that the Resolution Plan has given equal treatment to all the class of Creditors. The reliance placed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unfairly dealt with regarding the settlement of its Claim , under the subject Resolution Plan. 7. At the outset, we address to the contention of the Learned Counsel for the Appellant that the said property does not belong to the Corporate Debtor and therefore could not have been included in the pool of assets. A brief perusal of the record shows that the Appellant had issued an Allotment Letter No. 1206 dated 11/04/2008 in favour of the Corporate Debtor and subsequently another Allotment Letter No. 2974 dated 02/12/2009 with respect to the subject plot. Thereafter a Higher Purchase Agreement dated 14/12/2009 was also entered into between the parties creating an interest of the Corporate Debtor in the said plot. Clause 10 of the Higher Purchase Agreement, relied upon by the Appellant, pertains to selling, transferring, assigning of the plot by the Corporate Debtor in favour of a third party. Sl. No. Date Event 1. 11.04.2008 Allotment Letter issued by the Appellant in favor of the Corporate Debtor for lease of ₹ 9051/- per sq. mt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2018 filed by the Corporate Debtor, where the Hon ble Court recorded the statement of the Corporate Debtor to deposit the principal amount and half of the interest due. 13. 02.08.2018 Order of the Hon ble Supreme Court in SLP (C) No. 2151/2018 dismissing the SLP as withdrawn. 14. 16.02.2019 Letter of the Appellant to the District Magistrate, Ghaziabad intimating it about the large defaulters and requesting the District Magistrate to take appropriate action. 15. 30.05.2019 CIRP of the Corporate Debtor commenced by the NCLT. 16. 15.11.2019 NCLT directed the District Magistrate, Ghaziabad to not sell the land in view of the moratorium. 17. 20.12.2019 NCLT directed the RP to file an affidavit regarding the project of the Corporate Debtor. 18. 11.03.2020 NCLT directed de-sealing of the Project Land. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant on 26/12/2019, 15/01/2020, 20/01/2020, 22/01/2020, 21/02/2020, 04/03/2020 and 12/03/2020. On 11/08/2020, the Resolution Professional informed the Appellant about the approval of the Resolution Plan vide Order dated 04/08/2020. 11. In a catena of Judgments, the Hon ble Supreme Court has laid down that the commercial wisdom of the CoC is non-justiciable unless it does not comply with the provisions of Section 30(2) of the Code. The Hon ble Supreme Court in K Sashidhar Vs. Indian Overseas Bank Ors. 2019 12 SCC 150, has observed as follows: 57. ...Indubitably, the remedy of appeal including the width of jurisdiction of the appellate authority and the grounds of appeal, is a creature of statute. The provisions investing jurisdiction and authority in NCLT or NCLAT as noticed earlier, have not made the commercial decision exercised by CoC of not approving the resolution plan or rejecting the same, justiciable. This position is reinforced from the limited grounds specified for instituting an appeal that too against an order approving a resolution plan under Section 31. First, that the approved resolution plan is in contravention of the provisions of any law for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insofar as the Adjudicating Authority is concerned, and Section 32 read with Section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Sashidhar 153. It can thus be seen, that this Court has clarified, that the limited judicial review, which is available, can in no circumstance trespass upon a business decision arrived at by the majority of CoC. 154. In the case of Maharashtra Seamless Limited (supra), NCLT had approved the plan of appellant therein with regard to CIRP of United Seamless Tubulaar (P) Ltd. In appeal, NCLAT directed, that the appellant therein should increase upfront payment to ₹ 597.54 crore to the financial creditors , operational creditors and other creditors by paying an additional amount of ₹ 120.54 crore. NCLAT further directed, that in the event the resolution applicant failed to undertake the payment of additional amount of ₹ 120.54 crore in addition to ₹ 477 crore and deposit the said amount in escrow account within 30 days, the order of approval of the resolution plan was to be treated to be set aside. While allowing the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in violation of any law for the time being in force. The Adjudicating Authority has a very limited jurisdiction and should only examine whether the Resolution Plan meets the essential requirements as provided for under Section 30(2) of the Code. 14. Subsequent to the RP admitting the Claim of ₹ 1,23,07,52,746/-, the said Claim was included in the information memorandum and the Successful Resolution Applicant proposed an amount of ₹ 12,30,75,275/- which is 10% of the admitted Claim towards satisfaction of the Appellant dues, even though the Liquidation value due to the Appellant under Section 30(2)(b) of the Code was NIL. The Hon ble Supreme Court has time and again observed that it is the CoC which has to decide the percentage of haircut, the sub classes between Operational Creditors and the manner in which the amount is to be distributed. Therefore, for all the foregoing reasons this Tribunal is of the considered view that there is no illegality or infirmity in the approval of the Resolution Plan by the Adjudicating Authority. 15. At the cost of repetition, it is significant to mention that the Resolution Plan was approved by 96.07% votes way back on 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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