TMI Blog2023 (2) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... us well settled that Resolution Plan is approved by the CoC is binding between the CoC and SRA. The question to be considered in this Appeal is as to whether, there are any circumstances and conditions, where Resolution Plan can be sent back for carrying out any changes - In this context, the Judgement of the Hon ble Supreme Court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS [ 2019 (11) TMI 731 - SUPREME COURT] is referred. The Hon ble Supreme Court in the above judgement had occasion to consider the scope of judicial review of the Adjudicating Authority in the context of Resolution Plan approved by the CoC. It was held by the Supreme Court that The reasons given by the Committee of Creditors while approving a resolution plan may thus be looked at by the Adjudicating Authority only from this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal. Thus, in view of the Judgment of the Hon ble Supreme Court laid down above, the Adjudicating Authority if finds on given set of facts that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in accordance with law. 2. Brief facts of the case necessary to be noted for deciding this Appeal are:- (i) Corporate Insolvency Resolution Process against the Corporate Debtor-Twenty First Century Wire Rods Limited was initiated by Order dated 12.09.2018. In response to request for Resolution Plan, the Appellants submitted a Resolution Plan which came to be approved by the CoC with 87.22%. The Respondent No. 2-IDBI Bank holds 87.22% voting share also consented to the Resolution Plan. (ii) The Resolution Professional filed an Application CA-1147(PB)/2019 for approval of the Resolution Plan. The Kotak Mahindra Bank Limited-Respondent No. 1 also filed an Application being CA- 1179/2019 with a prayer to reject the Resolution Plan submitted by the Appellant and further to set aside the voting concluded on 06/06/2019 qua the Resolution Plan having mandatory clause of release of personal guarantee of the promoters. (iii) The IDBI Bank who have approved the Resolution Plan was directed by the Adjudicating Authority to file an Affidavit in response to which Affidavit was filed on 22nd March, 2022 and further filed IA. No. 1507 of 2022 seeking permission of the Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered by the CoC but the Committee of Creditors have prayed before the Adjudicating Authority for deletion of the clause which provide for mandatory release of the personal guarantee given by the promoters. It is submitted that said issues were raised in the meeting of the CoC which has been noticed in the minutes. It is further submitted that the clause providing for release of the personal guarantee of the promoters is contrary to Section 128 of the Contract Act hence deserves to be deleted from the Resolution Plan. The Plan has to be in compliance of Section 30(2)(e) of the I B Code. It is submitted that when arguments were addressed before the Adjudicating Authority that the above clause is not in accordance with law, the Appellant himself consented for sending the Resolution Plan back for reconsideration and Appellant can not be permitted to file this Appeal which is based essentially on basis of consent order. 5. Mr. Bishwajit Dubey-Learned Counsel for Respondent No. 2 submits that although IDBI Bank has approved the Resolution Plan but certain fact came to the notice of the Bank with regard to personal guarantor hence it filed an Affidavit and Application before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not a typical contract. 8. The law is thus well settled that Resolution Plan is approved by the CoC is binding between the CoC and SRA. The question to be considered in this Appeal is as to whether, there are any circumstances and conditions, where Resolution Plan can be sent back for carrying out any changes. In this context, we refer to the Judgement of the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Ltd. Vs. Satish Kumar Gupta Ors. [2020 8 SCC 531]. The Hon ble Supreme Court in the above judgement had occasion to consider the scope of judicial review of the Adjudicating Authority in the context of Resolution Plan approved by the CoC. In paragraph 73, following has been held: This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The plan may be approved, subject to the removal of the clauses that deals with the release of the personal guarantor and the Resolution Applicant, may be protected by virtue of the directions of this Tribunal, to the effect that the personal guarantors will not have the right of subrogation, in case Kotak Bank or IDBI Bank, enforce the personal guarantee and recover the amount from the person guarantors. In this suggestion made by Mr. Bishwajit Dubey, Ld. Counsel for the IDBI Bank Mr. Arvind Nayar, Sr. Adv. for Kotak Mahindra Bank sought time to get instructions. At request, list the matter for physical hearing on 21.03.2022 at 02:30 PM. 11. In reference to the Order dated 15th March, 2022, Affidavit and Application was filed by the IDBI Bank and matter was heard by the Adjudicating Authority and Order was passed on 30th March, 2022 which has been extracted above. The Adjudicating Authority in order dated 30th March, 2022 has clearly made following observation: In that view of other matter without expressing any opinion on the stand taken by the IDBI Bank or by M/s. Kotak Mahindra Bank or by the RP and also taking cue from Mr. Nagesh, Ld. Counsel for the Resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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