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TMI Blog2024 (1) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... VV Sastry, Mr. Debargha Basu, Ms. Priyata Chakraborty and Mr. Rahul Poddar, Advocates For the Respondents : Mr. S. N. Mookherjee, Sr. Advocate with Mr. Abhijeet Sinha, Mr. Shaunak Mitra, Mr. Avishek Guha, Mr. Soumya Dutta, Advocates with Mr. Pratim Bayal, RP in person for R-1. Mr. Arun Kathpalia, Sr. Advocate with Ms. Astha Sharma, Mr. Piyush Agarwal, Ms. Shivalli Kajaria, Ms. Anju Thomas and Ms. Ripul Swati, Advocates for SRA JUDGMENT Ashok Bhushan , J. These two Appeals have been filed against the order dated 19.10.2023 passed by the Adjudicating Authority (National Company Law Tribunal) Division Bench, Court No.II, Kolkata. In Company Appeal (AT) (Insolvency) No.1501 of 2023, challenge is the order dated 19.10.2023 passed in IA (IB) No.1599/KB/2023 which was filed by the Appellant- 'Manav Investment & Trading Company Limited'. By the impugned order, IA (IB) No.1599/KB/2023 was rejected, aggrieved by which order, Company Appeal (AT) (Insolvency) No.1501 of 2023 has been filed. In Company Appeal (AT) (Insolvency) No.1534 of 2023, Appellant prayed for setting aside the order dated 19.10.2023 passed by the Adjudicating Authority in IA (IB) No.1527/KB/2023 by which Adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Plan providing for disbursement on the basis of security interest and not on the basis of vote shares of the Financial Creditor is contrary to Section 53. It is submitted that the Resolution Plan also clubs workers and employees into the same basket as Operational Creditors which is contrary to Section 30(2)(b) r/w Section 53 of the IBC. It is submitted that the transfer of tyre undertaking is in violation of Section 25FF of the Industrial Disputes Act, 1947. Resolution Plan is less than the liquidation value. Objection raised by the Appellant is that the Resolution Plan as was raised in IA No.1599/KB/2023 has been illegally rejected. It is submitted that there is discrimination in payments under the plan to related party and unrelated party whereas related party has not been proposed any payment which is discriminatory. 5. Shri Mainak Bose, Learned Counsel for the Appellant in Company Appeal (AT) (Insolvency) No. 1534 of 2023 has reiterated the submissions advanced by the Appellant in Company Appeal (AT) (Insolvency) No. 1501 of 2023 and submits that the Appellant has filed a claim in Form C which was illegally rejected which was challenged by the Appellant by means of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of Resolution Plan is sought to be challenged in the Appeal whereas in the Appeal not even the order passed by the Adjudicating Authority approving the Resolution Plan has been annexed and the Appellant has only annexed the order of the Adjudicating Authority deciding IA No. 1599/KB/2023 , IA No. 1648/KB/2023 and IA No. 1069 / KB / 2022. 8. We have considered the submissions of the Counsel for the parties and perused the record. 9. Both the Appellants who have filed these Appeals are related parties. Related parties cannot claim entitlement of any amount in the plan and cannot claim any discrimination with regard to payments to unrelated unsecured Financial Creditors. Shri S.N. Mookherjee, Learned Senior Counsel for the Respondent has rightly placed reliance on the judgment of the Hon'ble Supreme Court in "M.K. Rajagopalan vs. Dr. Periasamy Palani Gounder and Anr.- 2023 SCC OnLine SC 574" where Hon'ble Supreme Court had occasion to consider the provisions of the IBC specially the payments to related parties and discrimination in the Resolution Plan. In relation to related party, it was held by the Hon'ble Supreme Court that there is no provision in the Code which mandates that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unfair benefit to the corporate debtor; and that the statutory recognition of related party as a different class would apply even to resolution plan when CoC would decide whether in its commercial wisdom it should pay to related party at all because that would mean paying to the same persons who are behind the corporate debtor. However, thereafter the Appellate Tribunal proceeded to observe that related party was required to be equated with the promoters as equity share-holders and then, further made certain observations about discrimination between related party unsecured financial creditor and other unsecured financial creditors as also between related party operational creditor and other operational creditors. Such far-stretched observations of the Appellate Tribunal are difficult to be reconciled with the operation of the statutory provisions. 202. It has rightly been argued on behalf of the appellants and had rightly been observed by the Adjudicating Authority ( vide extraction in paragraph 15.4.1 hereinabove ) that there was no provision in the Code which mandates that the related party should be paid in parity with the unrelated party. So long as the provisions of Code a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmanabhan Venkatesh & Ors. (CIVIL APPEAL NO. 4242 OF 2019) reported in [2020] ibclaw.in 03 SC that : 26. Ne provision in the Code or Regulations has been brought to our notice under which the bid of any Resolution Applicant has to match liquidation value arrived at in the manner provided in Clause 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. This point has been dealt with in the case of Essar Steel (supra). We have quoted above the relevant passages from this judgment. ( Emphasis Added ) 6.9. On the allegation that the Resolution Plan clubs workers and employees into the same basket contrary to Section 30(2)(b) read with Section 53 of the Code, relying on the Honourable Supreme Court Judgement in the case of India Resurgence ARC, we respectfully reproduce the following words of the Apex court in that order that Section 53 is only referred to in order that a certain minimum figure be paid to different classes of operational and financial creditors. It is only for this purpose that Section 53(1) is to be looked at as it is clear that it is the commercial wisdom of the Committee of Creditors that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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