TMI Blog2024 (1) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... hich order was set aside by this Appellate Tribunal against which the Civil Appeal was filed before the Hon ble Supreme Court. The law is thus well settled that the Resolution Plan approved by the CoC is binding on the CoC and it cannot have reviewed its own decision or pray for review of its opinion. Adjudicating Authority in the impugned order has taken the view that the Resolution Plan can be sent for re-consideration to the CoC - Present is not a case where CoC is claiming in its application that the Resolution Plan which was approved by the CoC is in violation of any provisions of Section 30(2). There is a delay in implementation of the Resolution Plan of Allied Strips Limited and Tirupati Infraprojects Private Limited by the Appellant was very much raised before the CoC and were considered by the CoC before approving the Resolution Plan of the Appellant and the CoC is well aware that there is delay in implementation of the plans of Allied Strips Limited and Tirupati Infraprojects Private Limited which was noticed in its minutes as has been brought on the record - From the facts of the present case, out of two entities for which allegation was made of non-imple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2021 was filed by M/s. Panch Tatva Promoters Private Limited challenging the order of this Appellate Tribunal which too was dismissed on 17.09.2021. Appellant submitted renewed Bank Guarantee of Rs.5 Crores on 18.02.2022. Respondent No.1, a Financial Creditor filed an application being IA No.239 of 2022 seeking reconsideration of the Resolution Plan of the Appellant. The Adjudicating Authority reserved the order on 01.06.2022 after hearing the objection of the Respondent No.1. Order dated 27.07.2022 has been passed by the Adjudicating Authority by which, application being IA No.239 of 2022 was allowed and the Adjudicating Authority directed the Resolution Plan be remanded back to the CoC to re-consider all the Resolution Plans submitted during the CIRP of the Corporate Debtor. Aggrieved by the above order dated 24.07.2022, Company Appeal (AT) (Insolvency) No. 1184 of 2022 has been filed. 2.3. On 01.08.2022, IA No.159 of 2020 filed by the Resolution Professional for approval of the Resolution Plan came for consideration. Adjudicating Authority disposed of the application observing that by order passed on IA No. 239 of 2022, now the Resolution Plan is being sent back to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Plan for re-consideration. It is submitted that the Appellant having failed to implement two Resolution Plans of entities namely Allied Strips Limited and Tirupati Infraprojects Private Limited there is no credibility of the Appellant to implement the Resolution Plan, hence, CoC is entitled to review the subsequent events and take over all view of the matter. With regard to Gulf Petroleum FZC parent entity of the Appellant, there has been restrained order from selling, transferring and alienating assets by Delhi High Court. The Gulf Petroleum FZC has given letter of comfort to the Appellant. In view of the subsequent events, CoC has great doubt regarding viability of the Appellant in implementing the plan, hence, CoC is entitled to reconsider. It is submitted that the CoC is not starting the process afresh of inviting Resolution Plans. It is submitted that the power of the Adjudicating Authority to remit the Resolution Plan for reconsideration has been accepted by this Tribunal as well as the Hon ble Supreme Court. 6. Learned Counsel for the CoC also supported the submission of the Resolution Professional and submitted that the CoC have cogent material to re-conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermitting withdrawal of the Resolution Plan was allowed which order was set aside by this Appellate Tribunal against which the Civil Appeal was filed before the Hon ble Supreme Court. While considering the scheme of the IBC in the above background, the Hon ble Supreme Court has observed that even prior to the approval of the Adjudicating Authority is binding inter se between the CoC and the Successful Resolution Applicant. In paragraph 115, following has been laid down:- 115. While the above observations were made in the context of a scheme that has been sanctioned by the court, the resolution plan even prior to the approval of the adjudicating authority is binding inter se the CoC and the successful resolution applicant. The resolution plan cannot be construed purely as a contract governed by the Contract Act, in the period intervening its acceptance by the CoC and the approval of the adjudicating authority. Even at that stage, its binding effects are produced by IBC framework. The BLRC Report mentions that [w]hen 75% of the creditors agree on a revival plan, this plan would be binding on all the remaining creditors . The BLRC Report also mentions that, the RP submits a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons advanced before the Adjudicating Authority as well as before us, it is clear that the CoC was sought review of the Resolution Plan on the grounds: (a) Resolution Applicant after approval of the plan has failed to implement two Resolution Plans i.e. Allied Strips Limited and Tirupati Infraprojects Private Limited . (b) Against parent company of the Appellant, there is freezing order by the Delhi High Court that it shall not alienate its assets. (c) Credit rating of the Appellant has gone down. 15. Before we proceed to examine those submissions, it is relevant to notice that in the application which was filed by the CoC in prayer (i) direction was sought for remanding back to the CoC so that the CoC can reconsider of the Resolution Plan submitted during the CIRP of the Corporate Debtor. Present is not a case where any other Resolution Applicant was coming forward who has submitted its plan in the CIRP claiming reconsideration of its plan. One Resolution Applicant i.e. M/s. Panch Tatva Promoters Private Limited who was H-2 Bidder had unsuccessfully challenged the plan before this Tribunal and before the Hon ble Supreme Court, hence, the claim of H2 Bidder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of CIRP under this section shall not be granted more than once. In this case, the extended period has also expired after the first extension. Therefore, the question of further seeking an extension or granting time does not arise. XXX XXX XXX 48. In fact, after the approval of the Resolution Plan by the COC, pending adjudication before Adjudicating Authority, the COC cannot be permitted to take a U-turn from its earlier stand and reverse the decision already taken by it. Indeed, COC exercises its commercial wisdom in approval of the Resolution Plan. However, once the COC completes the exercise of approval of the Resolution Plan, the role of COC comes to an end. 49. Since the statutory time limit for completion of the Corporate Insolvency Resolution Process has already expired, the COC cannot seek additional time to complete the Corporate Insolvency Resolution Process and review its decision after approval of the Resolution Plan. The position of law is clear that once the Resolution Plan has been approved by COC and it is pending adjudication u/s Section 31 before the Adjudicating Authority, the COC does not contain any power to review its earlier decision t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anil Kohli , it was held that the Successful Resolution Applicant failed to implement the plan. Reference has been given to Regulation 38 of the CIRP Regulations, 2016, according to which, the Appellant was liable to disclose, Regulation 38 (1B) mandate the Resolution Applicant to give reasons leading to the failure of implementation of a Resolution Plan. Provision of Regulation 38 (1B) which requires giving reason is not akin to Section 29A which impart ineligibility of the Resolution Applicant. 20. From the facts of the present case, out of two entities for which allegation was made of non-implementation. Admittedly, for one i.e. Allied Strips Limited has been implemented and for other plan has not been implemented but that itself shall not impart any ineligibility. 21. Now coming to the submission that the parent company is under a freezing order for not sale of its assets. Suffice it to say that there was no such condition in the Resolution Plan that if the parent company is under some freezing order the plan may not be implemented and any disqualification shall attach with the Resolution Applicant. 22. As far as the submission of down grading of the credit rating of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have the effect of restarting the CIRP Process from the valuation stage when all the statutory timelines have long since been exhausted. The principle with respect to timelines is applicable to the facts of this case. At the cost of repetition, it is crystal clear that any modification or a withdrawal (by SRA or otherwise) after approval by the CoC and submission to the Adjudicating Authority, irrespective of the content of the terms envisaged by the Resolution Plan, would only lead to further delay and defeat the very scope and objective of the Code. The existing framework does not provide any scope for effecting any further modifications or withdrawals of the CoC approved Resolution Plan by the SRA or the Creditors. The Adjudicating Authority can interfere only if the Plan is against the provisions of the Code. Once the Plan is submitted to the Adjudicating Authority, it is binding and irrevocable as between the CoC and the SRA in terms of the provisions of the Code. This Tribunal in Steel Strips Wheels Ltd. Vs. Shri Avil Menezes Resolution Professional of AMW Autocomponent Ltd. Ors. 8 , placing reliance on Ebix Singapore Pvt. Ltd. (Supra), observed that any consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tribunal took the view that after approval of the plan there is no occasion to permit such withdrawal. It is further held that any such withdrawal of an already approved Resolution Plan would have identical repercussions with respect to timelines. 26. Counsel for the Appellant has also relied on the Judgment of this Tribunal in Noble Marine Metals Co Wll vs. Kotak Mahindra Band Ltd. and Anr.- Company Appeal (AT) (Insolvency) No. 653 of 2022 where this Tribunal held that the law is well settled that after approval of the resolution plan, it is binding on the CoC. In paragraph 8, following was stated:- 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 Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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