TMI Blog2022 (11) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... y defined in Section 31 of the I B Code, 2016 (discussed earlier) and there is no specific provision authorising the Adjudicating Authority to consider such extensions of time lines. This Appellate Tribunal again observes that the objective of I B Code, 2016 is Resolution as well as Maximisation the value of the assets of the Corporate Debtor and take care of interest of all stake holders and not limited to one stake holder or one set of stake holders. In view of the provisions as stipulated in the I B Code, 2016. Specific provisions of time lines of 90 days from the effective dates and subsequent additional 60 days as the outer limit provided in Resolution Plan. Specific proviso in Resolution Plan that after 90 + 60 days if settlement payment is not made money already been paid is liable to be forfeited. Failure to comply even extended time lines of three months given by this Appellate Tribunal. This Appellate Tribunal do not find any error in the impugned order on this aspect. While observing this, this Appellate Tribunal has also factored into the ratio provided by the Hon ble Supreme Court of India that commercial wisdom of Committee of Creditor is supreme and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal and upholding this Appellate Tribunal order by the Hon ble Supreme Court of India filed by one of the Operational Creditor (and not the Appellant). As such, no further scope is available to this Appellate Tribunal to invoke any of the provisions available under I B Code, 2016, to give any further relief to the Appellant, at this juncture. This Appellate Tribunal is of the considered opinion that there is no error, in the impugned order dated 05.09.2022, passed by the Adjudicating Authority - Appeal dismissed. - Company Appeal (AT) (CH) (Ins.) No. 340 of 2022 & I.A. Nos. 767 and 768 of 2022 - - - Dated:- 25-11-2022 - [ Justice M. Venugopal ] Member ( Judicial ) And [ Naresh Salecha ] Member ( Technical ) For the Appellant : Mr. P. H. Arvindh Pandian, Sr. Advocate For Resolution Applicant For Mr. Avinash Amarnath, Advocate For Resolution Applicant For the Respondents : Mr. S. Ravi, Sr. Advocate for Resolution Professional Corporate Debtor/ Respondent Nos. 1 2 respectively For Mr. Anup Singh, Resolution Professional For Mr. VVSN Raju, Advocate For Resolution Professional Mr. P.S. Raman, Sr. Advocate/ Intervener JUDGMENT (Virtual Mode) NARE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Rs. 4531.44 crores were claimed by the Creditors and out of which claim for Rs. 4138.5 crores were admitted and finally amount of Rs. 501 crores was proposed to be settled with the Creditors as per approved Resolution Plan and in addition Rs. 40 crores was to be infused as working capital thus, total amount of Rs. 541 crores was approved as amount of settlement. This Appellate Tribunal also note from the Resolution Plan approval dated 01.10.2021 that the fair value of the Corporate Debtor was of Rs. 394.12 crores and the liquidation value was of Rs. 220.90 crores. 5. This Appellate Tribunal further notes from the approved Resolution plan the definition of Effective Date The date of approval of the Resolution Plan by the Adjudicating Authority . Further, as per approved Resolution Plan Clause 4 A the total term of the Resolution Plan for implementation shall be within 90 days from the effective date . 6. In terms of Clause 7 of the approved Resolution Plan , following additional term was specified whereby there was specific provision for interest payment on delayed payment and forfeiture of payment made in case default beyond 60 days. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022 gave following orders:- Heard both the sides. It is represented by Mr. Y. Suryanarayana, Learned Counsel for the Appellant that the Appellant had deposited a sum of Rs.50 Crores in the Designated Account , which fact is not disputed by the other side. The Successful Resolution Applicant although had addressed vide letter dated 12.04.2022 to the Resolution Professional, Monitoring Committee, Committee of Creditors in the matter of Indu Projects Ltd. seeking six months time to remit the residual balance amount together with overdue interest @ 8% per annum, this Tribunal is granting three months time from today, to pay the residual balance amount in the Designated Account along with overdue interest @ 8% per annum from 23.01.2022. It is abundantly made clear by this Tribunal that the implementation of the Resolution Plan can go on and the Monitoring Committee is permitted to perform the act of partial disbursement of Plan Amount . Further, the Resolution Applicant shall ensure the continuation of All Projects by keeping the Bank Guarantee Alive and by making payment for the encashed Bank Guarantee . In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment. Against the aforesaid order, the Respondent No. 1 appealed to the NCLAT under Section 61 of the IBC. The impugned order has been passed in the said appeal. The Appellant, who as stated above, is an Operational Creditor contends that the impugned order is prejudicial to the right of the Appellant to receive the amounts payable to the Appellant under the approved Resolution Plan, within the timelines thereunder. Three months time granted to the Resolution Applicant (Respondent No. 1) to pay the residual balance amount in the designated account along with overdue interest, has expired. No payment has been made. The appeal has, thus, become infructuous and is dismissed. The NCLT may proceed further with the matter, in accordance with law. [emphasis supplied] 12. The 1st Respondent approached the Adjudicating Authority vide I.A. 283 of 2022 in CP (IB) No. 372/7/HDB/ 2018 wherein five prayers were made including dismissal of I.A. 77 of 2022 filed by the Appellant , allowing 1st Respondent to invoke EMD bank guarantee and extension of Corporate Insolvency Resolution Process allowing fresh bids for the Resolution Plan to be invited and debarrin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings of the Corporate Debtor. As such, we don't find any reason to keep it pending. We, therefore, observe that filing of this IA is misplaced and is accordingly, dismissed. [emphasis supplied] 13. Aggrieved by the impugned order in I.A. 283 of 2022, the Appellant has preferred the present Appeal , before this Appellate Tribunal . Appellant s Submission 14. The Learned Counsel for the Appellant gave overall view of the appeal and the circumstances which led to the present appeal. On coming to know that the Corporate Debtor has been recommended for liquidation the Appellant approached 1st Respondent expressing his intent to give his resolution plan on 04.05.2020. After getting approval from the Adjudicating Authority on an application made by 1 st Respondent in his fresh Form- G published on 25.07.2020. The Appellant submitted his Resolution Plan of Rs. 501 crores along with additional working capital of Rs. 40 crores. The Adjudicating Authority vide their order dated 01.10.2021 approved the Resolution Plan however the order of the Adjudicating Authority was uploaded only on 25.10.2021. The Learned Counsel for the Appellant further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct Information Memorandum was prepared. The Learned Counsel for the Appellant stated that the Resolution Plan was prepared, submitted and finally approved by the Adjudicating Authority which was prepared by the Appellant on the basis of incorrect Information Memorandum . The Learned Counsel for the Appellant further stated that in order to set the things right and to take ex-promoter to logical task, the Appellant filed I.A. No. 654 of 2022 in C.P (IB) 372 of 2018 (Direction Application) under Section 60(5) of the I B Code, 2016 r/w Rule 11 of NCLT Rules, 2016, whereby he prayed for immediate interim relief including forensic audit and restraining ex-promoters from disposing off and transferring moveable and immovable assets during pendency of the applications. 20. The Learned Counsel for the Appellant stated that an impleadment application vide I.A. 655 of 2022 was also filed regarding granting of any relief in I.A. No. 283 of 2022 filed by the Respondent without hearing the Appellant . The Learned Counsel for the Appellant emphasised that these applications were necessary in order to implement the Resolution Plan . The Learned Counsel for the Appellant, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended the time line beyond 90 days, however the Appellant could not still make substantial payments. The Learned Counsel for the Respondent emphasised that out of Rs. 501 crores claim settlement amount along with additional working capital infusion, admittedly, the Appellant has brought in only 10% of such money till date despite the Resolution Plan was approved way back on 01.10.2021. The Learned Counsel for the Respondent further clarified that according to the approved Resolution Plan the Appellant was supposed to make all payments within 90 days and further maximum 60 days were provided in the Resolution Plan @ 8% interest rate per annum for delayed payments and the terms of plan it was crystal clear that beyond 60 days of grace period, all payment made by the Appellant will be liable to be forfeited. 26. The Learned Counsel for the Respondent stated that the Appellant has brought several I.A s before the Adjudicating Authority just to delay the whole process and the impugned order was given correctly by the Adjudicating Authority after taking all due facts, provisions of the I B Code, 2016 and this Appellate Tribunal order dated 13.04.2022 into con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approached the Adjudicating Authority vide I.A. No. 77 of 2022 ( Extension Application ) for seeking extension of timelines which was rightly dismissed by the Adjudicating Authority , since the Resolution Plan was approved on 01.10.2021 and the Appellant was supposed to make all payment within 90 days however that was a complete failure on part of the Appellant to arrange fund and sought only long rope to delay the process. 30. The Learned Counsel for the Respondent further emphasised that the Appellant was given all the cooperation to implement the Resolution Plan successfully, however the Appellant was not in a position to implement the same and accordingly the 1st Respondent had to approach the Adjudicating Authority vide I.A. No. 283 of 2022 with prayer to dismiss I.A. no. 77 of 2022 along with permission of the Adjudicating Authority to invoke EMD bank guarantee furnished by the Appellant and to initiate fresh Corporate Insolvency Resolution Process and the Adjudicating Authority vide their order dated 05.09.2022 allowed the I.A. No. 283 of 2022 allowing initiation of fresh CIRP within 60 days as per Prayer- C and Prayer- A B was not considered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal s order ? 35. Issue No. (I) Whether the Adjudicating Authority has got the sufficient power to extend the time lines for making payments as per approved Resolution Plan and if so, whether in the present case this power was exercised or otherwise by the Adjudicating Authority correctly? Before dwelling into these aspects in details, it will be desirable to look into the specific provision of the I B Code, 2016 which deals with the submission of the Resolution Plan as well as approval of the Resolution Plan . 30. Submission of resolution plan.-(1) 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. (2) 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 costs in a manner specified by the Board in priority to the [payment] of other debts of the corporate debtor; (b) provides for the [payment] of the debts of operational creditors in such manner as may be spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (Ord. 6 of 2018) shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.] (5) The resolution applicant may attend the meeting of the committee of creditors in which the resolution plan of the applicant is considered: Provided that the resolution applicant shall not have a right to vote at the meeting of the committee of creditors unless such resolution applicant is also a financial creditor. (6) The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority. 31. Approval of resolution plan.-(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be minimum. This Appellate Tribunal further notes from the approved Resolution Plan the definition of Effective Date The date of approval of the Resolution Plan by the Adjudicating Authority . Further, as per approved Resolution Plan Clause 4 A the total term of the Resolution Plan for implementation shall be within 90 days from the effective date . This Appellate Tribunal notes that order of the Adjudicating Authority approving the resolution plan was dated 01.10.2022 and therefore, legally speaking 01.10.2022 should be constitute as effective date for calculating 90 days. The Appellant has made a case that since the order of the Adjudicating Authority was uploaded only on 25.10.2022 hence effective should be treated as 25.10.2022 and 90 days should be calculated from this date. The argument of the Appellant cannot be accepted in view of the specific definition given of the effective date in the Resolution Plan itself. In terms of Clause 7 of the approved Resolution Plan , following additional term was specified whereby there was specific provision for interest payment on delayed payment and forfeiture of payment made in case default beyond 60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at after 90 + 60 days if settlement payment is not made money already been paid is liable to be forfeited. ➢ Failure to comply even extended time lines of three months given by this Appellate Tribunal. This Appellate Tribunal do not find any error in the impugned order on this aspect. While observing this, this Appellate Tribunal has also factored into the ratio provided by the Hon ble Supreme Court of India that commercial wisdom of Committee of Creditor is supreme and there is limited scope for judicial intervention by the Adjudicating Authority or the Appellate Tribunal . Hence, this Appellate Tribunal upholds the decision of the Adjudicating Authority on this issue. Issue No. (II) Whether the Adjudicating Authority violated the principals of natural justice in the present case ? It has been alleged by the Appellant that the Adjudicating Authority has not considered his Impleadment Application bearing I.A. No. 655 of 2022 as well as Direction Application bearing I.A. No. 654 of 2022 in suitable manner and the Appellant was not given chance to represent the case. The Appellant also contended that the Adjudicating Authority o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) Pass such other and further orders as may be deemed fit by this Hon ble Court. Therefore, the Adjudicating Authority seems to be right in observing that there was no application for initiation of liquidation and the application of Appellant in I.A. No. 655 of 2022 is incorrect and accordingly was dismissed by the Adjudicating Authority . Taking into account the averments made by the both the parties and the reasons accorded by the Adjudicating Authority while disposing relevant I.A. No. 654 655 of 2022, this Appellate Tribunal do not find any reason to intervene the impugned order on this account. Issue No. (III) Whether the Adjudicating Authority could have ordered for fresh Corporate Insolvency Resolution Process when the Successful Resolution Applicant has claimed to be in position to implement the 'Resolution Plan', albeit beyond the schedule as stipulated in the Resolution Plan ? This Appellate Tribunal has already noted that in accordance with the approved Resolution Plan the Appellant was required to settle all payments within 90 days and further within 60 days. This Appellate Tribunal has also factored into the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
