TMI Blog2022 (12) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (1) of Section 31 of the IBC. It is clear that mandate of legislation is either to approve the resolution plan or to reject. However, there is no provision for making alteration or modification in the resolution plan. In view of the statutory provisions as contained in Section 31 of the IBC we are satisfied the learned Adjudicating Authority to some extent exceeded its jurisdiction in modifying/altering the conditions in the resolution plan - Appeal disposed off. - COMPANY APPEAL (AT)(Ins) No.201/2021 COMPANY APPEAL (AT)(Ins) No.266/2021 - - - Dated:- 14-12-2022 - Mathuraprasad C Pandey, Mr. Vrindavan C Pandey, Mr. Hanumanprasad R Pandey Versus Partiv Parikh, RP of M.V. Omni Projects (India) Ltd, RBSA Restructuring Advisors LLP, Committee of Creditors of M/s MV Omni Projects (India) Ltd , State Bank of India Stressed Asset Management Bank Nandish Patel Versus Partiv Parikh, Mathuraprasad C Pandey, Mr. Vrindavan C Pandey, Mr. Hanumanprasad R Pandey, Committee of Creditors of M/s MV Omni Projects (India) Ltd, State Bank of India Stressed Asset Management Bank, Axis Bank Ltd (Justice Rakesh Kumar) Member (Judicial) And (Dr. Ashok Kumar Mishra) Member (Technica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Adjudicating Authority in the month of August, 2019. 5. The appellant, Nandish Patel, in Company Appeal (AT)(Ins) No. 266/2021 while appearing in person has assailed the order of the Learned Adjudicating Authority whereby the Resolution Plan submitted by the Appellants in Company Appeal (AT)(Ins) No.201/2021 was allowed. The appellant, Nandish Patel, has assailed the order of the approval of the resolution plan primarily on the ground that the Resolution Plan submitted by appellants M/s Mathura Prasad Pandey Ors was fit to be rejected since Mathura Prasad had suppressed the material fact and misrepresented that the Corporate Debtor was Micro, Small and Medium Enterprise (MSME). In sum and substance on the ground of suppression of fact showing Corporate Debtor as MSME the approval was obtained and as such the entire impugned order is liable to be set aside. 6. Since in both the appeals common order has been assailed fact disclosed in one of the appeal i.e. appeal filed by Mathura Prasad would suffice the purpose in deciding the present appeal. 7. The short fact of the case is that the appellant, Nandish Patel, in the capacity of operational creditor filed the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f majority of CoC, the Learned Adjudicating Authority has committed error. It was argued that time without number it has been held that the approval of the Resolution Plan by the Coc is within commercial wisdom of the CoC and as such the Adjudicating Authority was not having any jurisdiction to modify or alter any of the condition of the Resolution Plan. According to him once the Resolution Plan was in accordance with the provisions contained in Section 31, and Resolution Plan was in accordance with condition as imposed under Section 30 of the IBC the learned Adjudicating Authority was having no option but to approve the same. He submits that once Resolution Plan approved by the majority of CoC in its commercial wisdom was submitted before the Adjudicating Authority for his approval, the Adjudicating Authority was only required to examine whether the resolution plan was to be approved or rejected. However, the Adjudicating Authority was not justified in putting any modification or alter any condition in the resolution plan. According to Mr. Sinha para 15 of the impugned order is required to be deleted from the impugned order. 11. Mr. Abhijeet Sinha, learned counsel has referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Authority. 13. To substantiate his submission regarding suppression of fact and misrepresentation by the RP, Mr Patel has argued that the Corporate Debtor suppressing fact has obtained Udhyog Aadhar to show that it was MSME and on such strength he obtained the certificate as if the Corporate Debtor was MSME. He has referred to number of documents to show that value of the assets of the Corporate Debtor was much beyond the cap of MSME. Of course, Mr. Nandish Patel who was appearing in person has argued on number of dates and referred to number of documents to show that by suppression of fact or misrepresentation depicting the Corporate Debtor as MSME the RP got its resolution plan approved by the Adjudicating Authority, we think it appropriate not to go into such detail, in view of facts and circumstances which we may deal hereinafter. 14. Besides making oral submissions Mr. Nandish Patel, appellant in Company Appeal (AT)(Ins) No.266/2021 has also filed Notes of Written submissions. The facts disclosed in the written submissions are as follows: 1.The 'Resolution Plan' of the 'Promoter Directors', was approved vide impugned order dated 28.01.2021 in IA 84 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laying fraud on the court, tribunal or authority is a nullity and non est in the eye of the law. Such a judgement, decree or order---by the first court or by the final court--- has to be treated as nullity by every court, superior or inferior. It can be challenged in any Court, at any time, in appeal, revision, writ or even in collateral proceedings. A Shamugam V. Ariya Kshatriya Rajakula Vamsathu Madalaya Nandhavana Paripalanai Salngam and Ors. (2012) 6 SCC 430, dated 27.04.2012 (Para-43.1 to 43.5). 43.1. It is the bounden duty of the court to uphold the truth and do justice ***** 43.5 It is the bounden obligation of the court to neutralise any unjust and/or undeserved benefit or advantage obtained by abusing the judicial process. B) Auto computer generated Udyog Aadhar Acknowledgement' (GJ01FOO86283) dated 30.11.2017 obtained ty Promoter Directors by false submissions. Evidence is as below: The Udyog Aadhar Booklet by Ministry of MSME, Govt. of India categorically clarifies that the UAM is filed on self certification basis and generated instantly through online auto: computer process. It further clarifies that there is no mon toring of the regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withheld this material information from the Hon'ble NCLT (Para-25, Page-13 of Reply by RP (R-1). Contraventions to the Provisions of 1 B Code 1BBI Regulations Section 30 sub-clauses 2(), 3 6 of l B Code categorically states that the Resolution Plan presented to COC Hon ble NCLT must confirm to criteria set by 1BB. Regulation 39(2) of IBBI Regulations mandated the RP to submit the details of PUEF transactions along with the Resolution Plan. Regulation 39(3) mandated evaluation of the same by COC and to record its deliberations. The sub-clause 12 of First Schedule [Under Regulation 7(2)(h)] on Code of Conduct for Insolvency Professionals' in 1BBI Regulations mandated that the RP must not conceal or withhold any material information from the Hon'ble Adjudicating Authority. The above violation proves that the Resolution Plan submitted to the Hon'ble NCLT was in contravention to the provisions of l B Code and was not in compliance with the criteria Specified by the Board. D) Diversion of funds by Promoter Directors vide Saraswat Co-0perative Bank In IA 846 of 2020, it was withheld from the Hon'ble NCLT, that the State Bank of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this information about GSRTC Projects as per the affidavit submitted to the RP (Page 28-33 of Reply Affidavit of RP). The said information of Rs. 22 Crores was also withheld from both the Valuers and they assigned 'NIL' value in the Valuation Reports citing that they have not been provided with projections or financial data of the same (Page 283, 325 of the Appeal Memo). The 'Fair Valuation' and Liquidation Value' was therefore lowered by Rs. 22 Crores and such lower valuation was tabled before COC (Page-606 of Appeal Memo). As admitted by RP in his reply, the said projects were also not included in the 'Information Memorandum' which was prepared based on the limited information provided by Promoter Directors inspite of being called upon by RP to provide all information/ material (Page-9 of Reply Affidavit of RP). The above proves that the Promoter Directors withheld/ concealed the said information of Rs. 22 Crores for their exclusive benefit/ diversion lower the valuation of CD. The CIRP so conducted is thus nullity in the eyes of law. 3. UNDESERVED BENEFITS SECURED BY PROMOTER DIRECTORS BY THIS FRAUD Debt of Rs. 353.03 Crores in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lead bank namely SBI, major member of CoC. In his written submission following facts have been elaborated. 1.The present written submissions are being filed in compliance of order dated 01.09.2022 passed in the captioned appeal, and may be considered in addition to the written submissions filed via diary number 29761 dated 16.09.21. 2.It is false that Resolution Plan of the promoters of CD was approved by way of 'back door entry', as the Resolution Plan was floated before the CoC only on direction of the Adjudicating Authority. Refer to Para 2.8 of Impugned Order (at Pg. 76 of Appeal) where it is observed that since no Resolution Plan was approved by the CoC, IA/670/2020 was filed for liquidation, however, Respondent No. 1-3 also filed an application i.e. IA/667/2020 for opposing liquidation as they had submitted revised Resolution Plans. The Bench directed the RP to re-discuss the revised plans and after following necessary procedure, the CoC, after discussing the plans as per the Evaluation Matrix, approved Resolution Plan submitted by Respondent No. 2, Mr. MC Pandey, by a majority of 97.79% Refer to Para 2.9 of Impugned Order (at the same page). 3.The App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development of the nation at large with all efforts. (Refer Pg. 119 3rd Para) It is also pertinent to note that the communication is dated 29.06.2018 i.e. less than one year prior Appellant's Section 9 Application. This sudden contradiction in the stand of the Appellant itself shows that the grievance regarding MSME certificate is fabricated for self-serving interests. 4. Section 29A(b) only disqualifies a person who is a willful defaulter in accordance with the guidelines of the Reserve Bank of India The relevant guidelines are provided in RBI Master Circular on Wilful Defaulters bearing No.DBR.No.CID.Bc.57/20.16.003/2015-16, however, Resolution Applicant in the present case has never been declared a Willful Defaulter as per RBI guidelines and none of the procedures mandated the Master Circular by have been initiated against the Resolution Applicant. Consequently, it is stated that Section 29A(b) of IBC is wholly inapplicable qua the Resolution Applicant. The Respondent herein humbly craves leave to place on record RBI Master Circular, annexed herewith as Annexure R/1. 5. Appellant, in capacity of COO, vide communication dated 27.01.2019 addressed to Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 4 submitted their Resolution Plan. The Respondent Nos 2 to 4 submitted their revised Resolution Plan on 21.9.2020. Thus, without prejudice to the fact that Corporate Debtor was an MSME all throughout, it is an undisputed fact that as on the date of submission of the resolution plan, the Corporate Debtor was an MSME. 19. From the pleadings it is further evident that the Corporate Debtor was a MSME on the date of submission of resolution plan by Respondent No.2 to 4. The amendment to the MSMED Act had already come into force w.e.f. 2.7.2020 and only thereafter Respondent No.2 to 4 had submitted their Resolution Plan and also revised resolution plan. Meaning thereby that at least on the date of filing of the resolution plan the CD was MSME and as such resolution plan was not required to be questioned on the ground that it was not MSME. 20. The appeal by Mr. Nandish Patel has been preferred primarily on the ground as if by suppression of fact or committing fraud the resolution plan was got approved by the Adjudicating Authority. We are of the opinion that if it was the case of the appellant that Adjudicating Authority was misled or before the Adjudicating Authority fraud has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution plan to the Board to be recorded on its database. (4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later; Provided that where the resolution plan contains a provisions for combination, as referred to in section 5 of the Competition Act, 2002 (12 of 2003), the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors. 22. On examination of the aforesaid provisions there is no doubt that if a resolution plan is submitted before the Adjudicating Authority which is in compliance with sub-section (1) of Section 31 as well as in consonance with the provisions of Section 30 of the Code such resolution plan has to be approved by the Adjudicating Authority since in Section 31 word shall has been incorporated with proviso that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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