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TMI Blog2023 (12) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... solution Professional of the Corporate Debtor under CIRP and other financial creditors Bank of India, State Bank of India, Karur Vysya Bank Limited, HDFC Bank Limited, Bank of Baroda, and so on. 3. The appeal has been filed to set aside the Impugned Order 02.02.2023 dated in IA 1899 of 2021 in CP (IB)- 1852/(MB)/2019 passed by the National Company Law Tribunal, Mumbai Bench, Court - III (in short 'Adjudicating Authority') filed under Section 61 of the Insolvency & Bankruptcy Code, 2016 (in short 'Code'). 4. From the Impugned Order, we find that the Appellant herein, filed an IA 1899 of 2021 in CP (IB)- 1852/(MB)/2019 before the Adjudicating Authority with prayer for following reliefs :- "1. The present Applicant Mr. Satish Dhondiram Chavan who is the member of the suspended board of the Corporate Debtor filed the above application praying the following reliefs: i. Direct the CoC of the Corporate Debtor to condone the delay of 3 (three) days by the Applicant in submitting a bank guarantee in respect of the Resolution Plan; ii. Direct the Respondent No. 1 and the CoC to consider the Resolution Plan of the Applicant as per the provisions of the said Code and its Regulations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution Professional has already filed an application bearing I.A. 1984/2021 for liquidation of the Corporate Debtor which was backed by 96.18 % voting of the COC by exercising their commercial wisdom and this Tribunal has no power to interfere with such commercial wisdom of the COC. 9. Therefore, for the aforesaid reasons this Bench is of the considered opinion that the above application is devoid of merits and is liable to be rejected. 10. Accordingly, the above Interlocutory Application is rejected." (Emphasis Supplied) 7. Shorn of unnecessary details and without going in the chequered history of the Corporate debtor of non payments, default, alleged frauds, alleged wilful defaulters declaration by the Financial Creditors, we would like to restrict ourselves to the averments made before us by both the parties. 8. It is the case of the Appellant that the Resolution Plan was rejected primarily on three factors a. The bank guarantee was furnished on 5th March 2021 with delay of 3 days as the last date of submission of bank guarantee was 1st March 2021. b. He submitted the bank guarantee of ICICI bank as against the bank guarantee which should have been issued from nation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered. 14. It is the case of the Appellant that there was the delay of only 3 days and so called wisdom of the CoC in rejecting the Resolution Plan was in effect non exercise of commercial wisdom by the CoC. 15. The Appellant referred to us few documents including the minutes of few CoC Meetings. 16. The Appellant submitted that as per the 9th CoC Meeting held on 05.11.2020. there were only 4 Prospective Resolution Applicants, namely, SIPUL Enterprises, Disha Milk and Milk Products Private Limited, Panchtawta Milk Industries Private Limited & Satish D Chavan. 17. As per the minutes of 10th CoC Meeting held on 22.12.2020 only two Resolution Plan were available from Satish Dhondiram Chavan the Appellant herein and Disha Milk and Milk Products Private Limited. 18. The Appellant emphasized that from the minutes of the 10th CoC Meeting, it is evident that his Resolution Plan was of Rs. 144.45 Crores with upfront payment of Rs. 11.80 Crores which was far more than the plan amount of another Resolution Applicant Disha Milk and Milk Products Private Limited which was merely Rs. 40.85 Crores with upfront payment of Rs. 5.36 Crores. 19. It is the case of the Appellant his Resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from them was that they may not be submitting bank guarantee as required. The reason cited was that as per their analysis there may be political influence in that area which is not congenial for business. The RP also informed that on similar grounds, other PRAs have also backed out at the last moment. Thus, the only plan received so far is from Mr. Satish Chavan. The RP also informed that as per the last meeting held on the 25th February 2021, bank guarantee was to be made available latest by 1st March 2021, however, bank guarantee was received only on 5th March 2021 which cannot be accepted. Hence, the RP informed that as of now there is no binding resolution plan available with him. The RP also informed that as per the order of the Hon'ble NCLT, the extended period of CIRP, excluding the period for Covid 19, has ended on the 26th February 2021. Therefore, going forward there are no probable option available but liquidation. The RP also informed that this present CoC meeting is also subject to the approval of Hon'ble NCLT for any further exclusion. The RP also informed that he has already prepared an application seeking further exclusion before the Hon'ble NCLT. The RP also opined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Supplied ) 24. In the 13th meeting a resolution was put for voting regarding condonation of delay in submission the requisite bank guarantee by the Appellant, which was rejected by CoC with 94.16%. 25. The Appellant finally referred to meeting of 14th meeting of CoC held on 09.07.2021 where the CoC passed a resolution for liquidation of the Corporate Debtors which reads as under : - 26. It is the case of the Appellant that the CoC has not acted in the interest of the stakeholders and rather resorted to irrational decision which cannot be justified in commercial sense. The Appellant, therefore, submitted that there is no commercial wisdom in the decision of the Committee of Creditors in rejecting the Resolution Plan of the Appellant which was more than three times than the value of next Resolution Applicant. 27. The Appellant also assailed the CoC for treating him to be eligible under Section 29A of the Code and stated that he was ineligible at the time of submission of the Resolution Plan. 28. The Appellant reiterated that liquidation of the Corporate Debtor is death of the corporate entity which is against the philosophy of the Code. 29. Concluding his arguments, the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ICICI Bank which is a non-nationalised bank and hence could not have been accepted. 36. The Answering Respondent emphatically reiterated that terms of RFRP is the bid document governing the entire Resolution Plan submission process and any departure to comply with the terms stipulated in RFRP including timelines to submit the bank guarantee obligates the CoC to reject such Resolution Plan. 37. The Answering Respondents submitted that in the present case, the CoC gave multiple opportunities to the Appellant to submit the bank guarantee and only on failure on the last occasion when the last date was 01.03.2021, the CoC decided not to consider the Resolution Plan purely because of failure of the Appellant to comply with the timelines as well as due to submission of bank guarantee in non-compliance mode. 38. The Answering Respondents mentioned that the Resolution Plan submitted by the Appellant was ineligible in terms of Section 29A of the Code, however, the Appellant is not labouring on this point since according to the Answering Respondents, the Appellant failed to meet the minimum threshold criteria. 39. The Answering Respondents also assailed the conduct of the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuted by any nationalised bank located in India. 47. Similarly, the original date of submission of bank guarantee was 15.11.2020 which was extended to 15.12.2020 and finally extended up to 01.03.2021. We observe that these facts were admitted by the Appellant who also admitted that he furnished the bank guarantee only on 05.03.2021, i.e., after delay of 3 days. 48. The Appellant also fairly conceded to the fact that the bank guarantee was executed by the bank other then the nationalised bank. 49. The Appellant however, challenged non suiting him on such technicalities which is non exercise of commercial wisdom by the CoC and it was within the preview of the Answering Respondents to consider the Resolution Plan of the Appellant. 50. This Appellate Tribunal is of considered opinion that terms and conditions as stipulated in RFRP are required to be treated valid and legal binding terms and conditions which has been stipulated by the CoC after fair deal of deliberations. The framing of such terms and conditions, evaluation of the Resolution Plan against such matrix is considered to be entirely within the commercial wisdom domain of the CoC. 51. In this connection, we would like t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir collective decision before the adjudicating authority. That is made nonjusticiable". (Emphasis Supplied) 52. Based on the above judgement of the Hon'ble Supreme Court of India and after analysing the facts in the appeal in details in provisions paragraphs, we hold that the Appellant failed to comply with the conditions as stipulated in RFRP. We do not find any reason to interfere with the Impugned Order dated 02.02.2023 passed by the Adjudicating Authority since, we do not find any error in the Impugned Order. 53. The Appeal, devoid of any merit, stand dismissed. No Costs. Interlocutory Applications, if any, are Closed. In Company Appeal (AT) (Ins.) No. 219 of 2023: 54. The Appellant has filed the Appeal i.e, Company Appeal (AT) (Ins.) No. 219 of 2023 with a request to set aside the Impugned Order dated 02.02.2023 in I.A. No. 1984 of 2021 in C.P. No. (IB)/ 1852/ (MB)/ 2019 passed by the Adjudicating Authority. 55. The I.A. No. 1984 of 2021 was filed by the Resolution Professional Mr. Vishal Jain seeking liquidation of Pratibha Krushi Prakriya Limited, the Corporate Debtor, under Section 33 (3) of the Code which was accepted by the Adjudicating Authority vide order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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