9911796707
TMI Blog2022 (9) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant : Mr. Arun Saxena , Ms. Nalini, Mr. Vikas Ashwani and Mr. Prashant Kumar, Advocates For the Respondent : Mr. Nikhil Jha and Mr. Milan Singh Negi for RP / R - 1. Mr. Dinkar Singh , Mr. Gagan Garg, Mr. Rohit Singh for ARCIL. Mr. A.N. Tiwari, Advocate. Ms. Shalya Agarwal, Mr. Amar Vivek & Mr. Aditya Gauri for Liquidator For the Appellant : Mr. P. Nagesh , Sr. Advocate with Mr. Ashutosh Gupta, Advocate For the Respondent : Mr. Nikhil Jha and Mr. Milan Singh Negi for RP / R - 1. Mr. Dinkar Singh , Mr. Gagan Garg, Mr. Rohit Singh for ARCIL. Ms. Anju Jain and Mr. Hitesh Sachar for R-14/ Canara Bank. Ms. Shalya Agarwal, Mr. Amar Vivek & Mr. Aditya Gauri for Liquidator JUDGEMENT ASHOK BHUSHAN, J: 1. These two Appeals have been filed against the same Order dated 26th October, 2021 passed by the National Company Law Tribunal, Allahabad Bench, Allahabad (hereinafter referred to as "The Adjudicating Authority") in CP No. (IB)131/ALD/2017. By the Impugned Order, the Adjudicating Authority has allowed CA No. 85 of 2019 filed by the Resolution Professional under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "The Code") for liquidation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 as was submitted before the CoC in the 12th CoC Meeting. Net worth of Resolution Applicant as well as his wife was Rs. 26.29 Crores which was more than criteria of Rs. 25 Crores of net worth. It is submitted that there was no valid reason given by the CoC for not approving the plan and plan stood rejected in the e-voting on 21st June, 2019. It is submitted that Appellant has also filed an I.A. before the Adjudicating Authority seeking a direction to disclose the reason for rejection of the Application for which C.A. No. 322 of 2019 was filed. It was further submitted by Mr. Nagesh that in 14th CoC held on 22nd July, 2021 the improved offer although was noticed by the CoC, but said decision was not placed before the Adjudicating Authority when the Impugned Order was passed on 26th October, 2022. 5. Mr. Arun Saxena, Learned Counsel appearing for the suspended director of the Corporate Debtor supported the submissions made on behalf of the Resolution Applicant and submitted that the plan submitted by the Resolution Applicant ought to have been approved by the CoC which would have resulted in revival of the Corporate Debtor. 6. Learned Counsel for the Resolution Professional refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the Resolution Applicant failed. The Resolution Applicant was time and again repeating his stand that once Resolution Plan was approved, there shall be sufficient investors to invest in the Corporate Debtor. Mr. Dinkar Singh, Learned Counsel for the CoC has taken us to various parts of the Minutes of the 12th and 13th CoC Meeting. 8. Learned Counsel for the Liquidator submits that after his appointment, has issued publication in two Newspapers inviting claims. Liquidator has proceeded with Liquidation Process and accordance with Liquidation Regulations. Efforts have been made. Sale Notice has also been published. Liquidator in his submissions has also submitted that on 02nd April, 2022, 'Letter of Intent' has been issued for accepting the sale of the assets of the Corporate Debtor as a going concern to the highest bidder for placing highest bid amounting to Rs. 41.05 Crores. 9. This Court vide its Interim Order dated 12th April, 2022 has passed an Interim Order that auction which has been held on 31st March, 2022 shall not be confirmed till the further decision of this Court. 10. We have heard Learned Counsel for the parties and have perused the record. 11. 'Corporate Insolv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... replied that they have shortlisted 8-10 customers who would advance money to them and gradually the said advance could be deducted from the sales made. Mr. Saggu added that the company is facing financial issues since last 15-16 years and these kind of arrangements were done in past also and there won't be any issues. CoC members asked the Resolution Applicant regarding the EMD, Bank Guarantee and the Sources of Funds. Mr NS Sharma requested the CoC members that as they are willing to pay 25% of the Plan amount within 30 days of the receipt of the NCLT order, then why the COC Members are forcing them to pay the EMD amount. Majority of the CoC members did not agree to the stand of the Applicant in claiming to pay 25% of the amount in 30 days but not able to pay Rs. 50 lacs as EMD. The applicant here requested the COC members to give time for the paying of EMD. RP intervened that it is very difficult to give time as on or before June 23, 2019 the COC needs to decide and communicate their decision to the Hon'ble NCLT. SASF was of the opinion this company resembles to some other case of a company based in Nagpur (the name was not mentioned). The Applicant does not have EMD deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 29A of the Code. One of the lenders asked regarding the timeline available with the RP to which he replied that the CoC has to decide the matter before 23rd June, while the RP shall file a report before the Hon'ble NCLT on or before 24th June, 2019. The RP summarized the issues before the COC mentioned that- - The RA is no agreeable to the condition of PBG - The NW criteria is met only if the NW of RA's wife or Mr. Rakesh Sharma is considered - Despite various letters being shown there is no clear sources of funds demonstrated - However, it is the prerogative of the CoC to consider the plan submitted by the RA in view of the order of the Hon. NCLT. - The RP asked the view of each of the CoC members:- BOB mentioned that they are with the decision of the majority. One of the COC member mentioned that the stand of the COC with regards to PBG needs to be clarified. He mentioned that the COC had never waived the condition of PBG to the previous resolution applicant. The RP clarified that the COC has consciously put the previous plan to vote despite the condition of PBG not being met by the RA. Thus if the plan would have been approved, the condition of PBG with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not satisfy the CoC regarding the sources of fund. Hon'ble Supreme Court in the matter of "K. Sashidhar Vs. Indian Overseas Bank and Ors" [(2019) 12 SCC 150] had categorically laid down that commercial wisdom of the Committee of Creditors has to be given paramount status and scope of judicial intervention in the decision taken by the CoC in its commercial wisdom is minimal. In paragraph 52, following has been laid down: "52. .....Besides, the commercial wisdom of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by the I&B Code. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject matter expressed by them after due deliberations in the CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the "commercial wisdom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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