TMI Blog2022 (4) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... per pleadings of the Resolution Professional came to end on 26.09.2021. Application for approval of the Resolution Plan was already filed and pending consideration before the Adjudicating Authority. The CoC in its meeting dated 18.12.2021 has clearly refused to consider the plan of Respondent No.3 after over of CIRP which fact was communicated by the Resolution Professional to the Respondent No.3. A perusal of the order of the Adjudicating Authority impugned in the present Appeal indicate that the Respondent No.3 has represented before the Adjudicating Authority that CoC is of the view that it could be taken into consideration subject to the outcome of this Application and directions issued by this Bench . The CoC could not as per existing law, consider the Resolution Plan of Respondent No.3 after approval of the plan of the Appellant and after over of the CIRP. The CoC having approved the plan of the Appellant had rightly taken a decision on 18.12.2021 to communicate the Respondent No.3 that plan of Respondent No.3 cannot be considered. There is no valid reason given by the Adjudicating Authority for permitting the consideration of plan of Respondent No.3. The considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Respondent No.1 that CoC has decided to consider the Resolution Plan of the Appellant and CoC has granted one-time opportunity to all the Prospective Resolution Applicants in the final list to submit Resolution Plan or a revised Resolution Plan till 09.05.2021. Further extension of 60 days time was allowed beyond 270 days. On 26.07.2021, the Adjudicating Authority allowed eight weeks time to complete the CIRP. The Appellant submitted its revised Resolution Plan on 24.04.2021 with addendum of 27.08.2021. In the CoC meeting dated 21.09.2021, the Resolution Plan of the Appellant was considered and voting was conducted from 28.08.2021 till 21.09.2021. The Appellant s plan was approved by the CoC with 98.55% voting share. The Letter of Intent was issued by Respondent No.1 to the Appellant on 21.09.2021. In pursuance of which, the Appellant submitted the Bank Guarantee of ₹ 20 Crores on 23.09.2021. On 24.09.2021, the Respondent No.1 filed I.A No. 692 of 2021 before the NCLT seeking approval of the Resolution Plan of the Appellant. On 13.12.2021, the Respondent No.1 received the request from Respondent No.3 for submitting a joint Resolution Plan. The Respondent No.1 placed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Resolution Plan submitted by the Respondent No.3. The period for submitting Expression of Interest and the Resolution Plan had long expired and the name of Respondent No.3 was not included in the final prospective list of the Resolution Applicants and he had no authority to submit any Expression of Interest/ Resolution Plan. The Adjudicating Authority has no jurisdiction to permit the CoC to consider the Resolution Plan of the Respondent No.3 when the Resolution Plan of the Appellant has already been approved by the CoC, which fully comply with the provisions of the Code. The order dated 18.01.2022 was passed by the Adjudicating Authority without the Appellant being given opportunity and without Appellant being made party in the Application I.A. No. 43 of 2022 filed by the Respondent No.3. The order dated 18.01.2022 indicate that neither the Resolution Professional nor CoC was heard since notices were issued to both Resolution Professional and the CoC. The Adjudicating Authority was not made aware that Resolution Plan has already been approved by the CoC on 26.08.2021 and further with regard to request of Respondent No.3, CoC on 18.12.2021 has already declined the request of Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aximise the value of the assets of the Corporate Debtor but also provide value maximisation and a timely exit to all stakeholders of the CIRP including all the employees/ ex-employees of the Corporate Debtor. It is submitted that the CoC has now expressed its opinion to consider the Resolution Plan of Respondent No.3. The commercial wisdom of the CoC is to be given due credence. The Resolution Plan of the Appellant is neither binding nor irrevocable. The Adjudicating Authority has all powers and jurisdiction to permit the CoC to consider the Resolution Plan of Respondent No.3. 9. Learned Counsel for the parties has referred to and relied on judgments of this Tribunal and the Hon ble Supreme Court which shall be referred to while considering the submissions in detail. 10. It is not disputed between the parties that Resolution Plan of Appellant stood approved by the CoC by majority of 98.55% voting shares. The approval of the Resolution Plan was well within CIRP period as extended by the Adjudicating Authority. It is on the record that CIRP period of the Corporate Debtor was to expire on 28.07.2021. Thereafter, eight weeks extension was granted by the Adjudicating Authority vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... List the matter on 04.03.2022. 12. With reference to the request received by Respondent No.3, Resolution Professional has stated in its reply that after receiving the e-mail dated 13.12.2021, by e-mail dated 14.12.2021 CoC was informed and the CoC in its meeting held on 18.12.2021 expressed opinion that the new Expression of Interest cannot be considered. In this context, it is useful to refer para 14 of the Reply filed by the Resolution Professional which is to the following effect:- 14. During the twenty-first CoC meeting held on December 18, 2021, the joint expression of interest submitted by Triton was discussed and deliberated upon by the CoC. The CoC unanimously opined that since the SSWL Plan has already been approved by the CoC and the Plan Approval Application has already been filed by the RP before the Ld. Adjudicating Authority, a new expression of interest cannot be considered at this juncture. Further, the CoC directed the RP to convey the same to Triton. The Respondent No.1 undertakes to produce a copy of the minutes of the twenty-first CoC meeting held on December 18, 2021 before this Hon ble Appellate Tribunal, if it so desires. 13. Further for the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussions and deliberations on your proposal, the CoC members have instructed the undersigned to convey to you that the resolution process of the Corporate Debtor has is at a very advanced stage given that the resolution plan has already been approved by the CoC of the Corporate Debtor and the CoC approved resolution plan is pending before the Hon ble NCLT for its consideration. In view of the aforesaid, the CoC of the Corporate Debtor would not be able to consider your proposal at this stage. Please note that the CoC and the undersigned shall always act in accordance with applicable laws and regulations and any directions from the Hon ble NCLT or any other appropriate court or tribunal. 14. The CoC in its meeting dated 18.12.2021 has clearly refused to consider the plan of Respondent No.3 after over of CIRP which fact was communicated by the Resolution Professional to the Respondent No.3. A perusal of the order of the Adjudicating Authority impugned in the present Appeal indicate that the Respondent No.3 has represented before the Adjudicating Authority that CoC is of the view that it could be taken into consideration subject to the outcome of this Application and direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort also mentions that, the RP submits a binding agreement to the Adjudicator before the default maximum date . We have further discussed the statutory scheme of the IBC in Sections I and J of this judgement to establish that a Resolution Plan is binding inter se the CoC and the successful Resolution Applicant. Thus, the ability of the Resolution Plan to bind those who have not consented to it, by way a statutory procedure, indicates that it is not a typical contract. 16. The CoC having approved the plan of the Appellant had rightly taken a decision on 18.12.2021 to communicate the Respondent No.3 that plan of Respondent No.3 cannot be considered. In Ebix Singapore Private Limited (supra), the Hon ble Supreme Court has emphasised on the timeline. It was held that the CIRP is a time bound process with a specific aim of maximizing the value of assets. In para 146, following observations have been made:- 146. The CIRP is a time bound process with a specific aim of maximizing the value of assets. IBC and the regulations made under it lay down strict timelines which need to be adhered to by all the parties, at all stages of the CIRP. The CIRP is expected to be completed wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate process to the NCLAT and the Supreme Court130. Such inordinate delays cause commercial uncertainty, degradation in the value of the Corporate Debtor and makes the insolvency process inefficient and expensive. We urge the NCLT and NCLAT to be sensitive to the effect of such delays on the insolvency resolution process and be cognizant that adjournments hamper the efficacy of the judicial process. The NCLT and the NCLAT should endeavor, on a best effort basis, to strictly adhere to the timelines stipulated under the IBC and clear pending resolution plans forthwith. Judicial delay was one of the major reasons for the failure of the insolvency regime that was in effect prior to the IBC. We cannot let the present insolvency regime meet the same fate. 18. In view of the law laid down by the Hon ble Supreme Court in the above case, we are of the considered opinion that there is no valid reason given by the Adjudicating Authority for permitting the consideration of plan of Respondent No.3. The consideration of the Resolution Plan of Respondent No.3 shall be breaching both timeline as well as the finality of the Resolution Plan of the Appellant which was approved by the CoC on 26.08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Gupta- 2019 SCC OnLine SC 1478 made following observations in para 17:- 17. In the light of the above pronouncement of Hon ble Supreme Court, we have examined the issues raised in these Appeals. Admittedly, the A-1 filed its resolution plan before the Adjudicating Authority on 13.02.2019 whereas, the last date for submission of Resolution Plan before RP was 15.10.2018. Resolution plan of successful Resolution Applicant i.e. Dera Finvest Pvt. Ltd. (R2) was approved by 98.72 % of the Committee of Creditor in e-voting conducted on 01.11.2018 and 02.11.2018. When the Resolution Plan is filed before the Adjudicating Authority then the Authority has to satisfy that the Resolution Plan approved by the Committee of Creditor fulfills the requirements as specified in Sub-Section 2 of Section 30. However, the Adjudicating Authority cannot direct the CoC to consider the second Resolution plan submitted before the Authority although the second Resolution Applicant is ready to invest more amount in comparison to first Resolution Applicant. Learned Adjudicating Authority has rightly held that Adjudicating Authority cannot suomotu direct the CoC to consider new resolution plan and reconsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied Industries India Pvt. Ltd. vs. Hindustan Coils Ltd.- 2021 SCC OnLine NCLAT 51 where one of the question framed was Whether the Adjudicating Authority can direct the CoC to consider the Resolution Plan of a person who was not part of CIRP? . The said question no. (ii) is answered in paras 15, 16 17 in following words:- Issue No. 2. 15. In pursuant to the expression of interest issued by RP on 24.08.2018 the Appellant submitted a Resolution Plan. After several rounds of deliberation by the COC revised Resolution Plan was submitted by the Appellant on 19.12.2018. The same was approved on 28.12.2018 by the COC in the 13th meeting by requisite majority. Thereafter, the RP filed an Application under Section 30 (6) of the I B Code for approval of Resolution Plan in the month of January, 2019 and sometime in the month of February, 2020 the Respondent No. 1 filed an Application seeking direction for consideration of its Resolution Plan. Admittedly the Respondent No. 1 has not submitted any Resolution Plan pursuant to the expression of interest issued by the RP. Thus, the Respondent No. 1 is not part of CIRP. The Respondent No. 1 has filed Application directly before the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t suomotu direct the CoC to consider new resolution plan and reconsider already approved Resolution plan. The Hon ble Supreme Court in the above referred judgment held that under Section 30(2) of I B Code, decision of Committee of Creditor is purely Commercial and cannot be adjudicated by the Adjudicating Authority. Thus, we are of the view that Adjudicating Authority is well within its jurisdiction while rejecting the application of A-1. 17. With the aforesaid, we are of the considered view that Ld. Adjudicating Authority has erroneously entertained the Application and Resolution Plan of the Respondent No. 1 and directed the RP to put up the same before the COC for consideration. 27. The above judgment fully supports the submission of the Learned Counsel for the Appellant. It is also submitted by Respondent No.3 that the Resolution Plan which is submitted by the Appellant was beyond 19.04.2021 which was last date for submission fixed by CoC. The Resolution Professional in its reply has categorically stated that the plan was received on 24.04.2021. It has been stated that the CoC has extended the last date for submission of Resolution Plan from time to time. The Resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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