TMI Blog2024 (1) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed COC may decide as to whether proposal given by the Appellant is better than the plan. Coming to the facts of the present case, proposal under Section 12A submitted by the Respondent No.1 was also directed by this Tribunal to be considered along with Resolution Plan as has been noticed above and CoC in its 14th CoC meeting has already considered the Resolution Plan along with settlement proposal submitted by Respondent No. 1. Thus the facts of the present case are entirely different where the Settlement proposal submitted by Respondent No.1 has already been considered by the CoC, the above Judgment does not help the Respondent No.1 in the present case. The Adjudicating Authority committed error in giving an opportunity to Respondent No. 1 to arrive at acceptable settlement. The application for approval of the Resolution Plan which has already been filed and pending consideration, the Adjudicating Authority ought to have considered and decided the Application for approval of the plan - The plan having been approved on 08th January, 2023 and application is pending for about last one year before the Adjudicating Authority, the Adjudicating Authority may proceed expedit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No.1 came to be considered and in the 14th CoC meeting under Item No. A-4 in pursuance of decision of the Committee of Creditors Resolution B-2 regarding settlement proposal and Resolution B-3 regarding Resolution Plan of the Appellant were put to vote, as per voting result dated 08th January, 2023, the Resolution Plan of the Appellant was approved with 100% vote share of CoC and settlement proposal submitted by Respondent No.1 was dissented by 100% vote share. After the Approval of the Resolution Plan of the Appellant, a Letter of Intent was issued on 10th January, 2023 which was accepted by the Appellant. Appellant submitted performance bank guarantee of Rs. 12.1 Crores. iv. The Resolution Professional filed I.A. No. 987 of 2023 before the Adjudicating Authority for approval of the Resolution Plan. The Respondent No. 1 again filed an application I.A. No. 259 of 2023 in C.A.(AT) Ins No. 3 of 2022 which application was disposed of on 03rd February, 2023 making certain observations that no case has been made to make any further order against which Civil Appeal No. 1705 of 2023 was filed which too ws dismissed on 20th March, 2023. v. Respondent No. 1 again reiterated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No. 1 on several occasion which was considered and rejected by Financial Creditor. Respondent No1-the Suspended Director cannot be allowed to prolong the culmination of process by means of sending letters and revised settlement. 5. Learned Sr. Counsel appearing for Respondent No.1 submits that settlement proposal under Section 12A can be given at any stage even after approval of the Resolution Plan. It is further submitted that this Tribunal vide its order dated 3rd February, 2023 even after the approval of the Resolution Plan of the Appellant granted liberty to Respondent No. 1 to make an application before the Adjudicating Authority for consideration of his grievance, the I.A. No. 2594 of 2023 has been filed in pursuance of such liberty. Learned Counsel for Respondent No. 1 has also referred to the Order of the Hon ble Supreme Court dated 20th March, 2023 passed in Civil Appeal No. 1705 of 2023 where Hon ble Supreme Court has also noted the liberty granted by this Tribunal in its order dated 03.02.2023. It is submitted that Settlement Proposal given by the Respondent No. 1 is thrice to the plan value of the Appellant. 6. We have considered the submissions of Learned S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns received in the process unless the Resolution Plans are opened and deliberated side by side with the proposal of settlement submitted by the Appellant, the objective as contemplated in paragraph 14(iii) cannot be achieved. We thus are of the view that the Order dated 04.07.2022 clearly entitled that the CoC to weigh the Resolution Plans as well as Settlement Proposal together. 19. In result, I.A.No. 3410 of 2022 is disposed of as above and Contempt Application is rejected. 9. Subsequent to the order of this Tribunal dated 21.11.2022, CoC considered the Resolution Plan and Settlement Proposal in its 14th CoC Meeting. The discussion on the Settlement Proposal as well as Resolution Plan was noted in Item No. 4A. As per minutes of the 14th CoC Meeting, Resolution Plan was placed before the CoC for voting. The Resolution regarding approval of the Resolution Plan was approved with 100% vote share whereas Settlement Proposal given under Section 12A by the Respondent No. 1 was rejected with 100% vote share. As noted above, the Application has also been filed by the RP for approval of the Resolution Plan before the Adjudicating Authority being I.A. No. 987 of 2023. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant to approach the National Company Law Tribunal (NCLT). In case such a course is adopted, the respondents shall not object to the consideration by the NCLT only on the ground of jurisdiction. The civil appeal is disposed of in the above terms. Pending applications, if any, are disposed of. 11. It is also relevant to notice that after approval of the Resolution Plan, fresh proposal given by Respondent No.1 vide email dated 21st March, 2023 was also not accepted by the Competent Authority and on 06th May, 2023, Respondent No. 1 was communicated as follows: Sanjeev Mahajan Date: 06.05.2023 Promoter of Nimitaya Hotel Resorts Limited No. 3 Ashoka Avenue, Westend Greens Rajokari New Delhi 110038 Dear Sir, Sub: Settlement Proposal U/s 12A of IBC, 2016 Ref: Your letter dated 21.03.2023 This is in reference to your email dated 21.03.2023, addressed to CMD SEC Indian Bank under copy to this branch and also to the Resolution Professional. This is to inform you that the offer made by you for Rs. 118.26 Crore as per your letter dated 21.03.2023 is too low and has been declined by our competent authority. Als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such an application as permissible in law for consideration of his grievance before the Adjudicating Authority. The Order dated 03.02.2023 cannot be read to mean that this Tribunal granted liberty to Respondent No. 1 to submit any further proposal for settlement. The Order dated 03.02.2023 can be read only to mean at best the Respondent No. 1 can raise his grievance by an application before the Adjudicating Authority. Application has been filed being I.A. No. 2594 of 2023 and prayer made to set aside the communication dated 06.05.2023 issued by the CoC rejecting his proposal. When we look into the Impugned Order, the Adjudicating Authority made following observations: .CoC has already approved the Resolution Plan which is pending for consideration of this Adjudicating Authority. Suspended Management has filed certain applications proposing higher amount than proposed by the SRA for consideration of the CoC. Since, the matter is an old one, last opportunity is granted, so that any acceptable settlement can be arrived. If no settlement arises before the next date of hearing, the Resolution Plan will be heard on merits .. 16. The Order dated 01st December, 2023 cannot be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... niently mentioned that after approval of Resolution Plan Applicant should justify withdrawal. It was never intended that after approval of Resolution Plan by CoC, Application under Section 12A can be entertained. Hence, the Regulation is framed in that manner. 19. The above Judgment do support the submission of the Appellant that after approval of the Resolution Plan, settlement proposal by the Respondent No.1 cannot be accepted. 20. Mr. P. Nagesh, Learned Sr. Counsel for Respondent No. 1 has also placed reliance on various judgments of Hon ble Supreme Court and this Tribunal to support his submissions that direction can be issued to consider his Application under Section 12A even after approval of the Resolution Plan by CoC. 21. Learned Sr. Counsel for the Respondent No.1 has relied on Judgment of Hon ble Supreme Court in R. Raghavendran vs. C. Raja John Ors., C.A. No. 2552 of 2022 at paragraph No. 17-21 which are as follows: 17. We could have put an end to the matter by the aforesaid order but having been persuaded by learned counsel for the respondent No.1 to give some hiatus time to the said respondent on account of the fact that he has submitted an OTS (One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omoter have been considered and not approved, whether the Adjudicating Authority without passing any order in I.A. 2594 of 2023 can direct for consideration of proposal by Respondent No. 1. The said judgment is also on its own fact and does not support the Respondent No. 1. 24. Learned Sr. Counsel for the Respondent No. 1 has relied on another Judgment of this Tribunal in C.A.(AT) Ins. No. 921 of 2019, Shaji Purushothaman Vs. Union Bank of India Ors. In the above case, Appellant who was suspended director claimed to have settled the dispute with the Union Bank of India and filed MIsc. Application for setting aside the Order admitting CIRP. The Adjudicating Authority has observed that the Admission Order cannot be set aside except where an application under Section 12A is filed. In the above background, following observations were made in paragraph 7 to 9: 7. However, Mr. R.P. Agarwal appearing on behalf of Union Bank of India submits that the Resolution Plan has already been approved by the Committee of Creditors after taking into consideration the claim of the M/s. Edelweiss Asset Reconstruction Company Ltd. 8. In the circumstances, while we are not incline ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting 12A proposal when the decision of the CoC is arbitrary. The above Judgments of the Hon ble Supreme Court have no application in the facts of the present case since the Adjudicating Authority has not returned any finding that rejection of settlement claim of the Respondent No.1 by the COC is arbitrary. 27. In view of the aforesaid discussion and our conclusions, we are of the view that the Adjudicating Authority committed error in giving an opportunity to Respondent No. 1 to arrive at acceptable settlement. Thus, following observations in the Order are deleted from the order Since, the matter is an old one, last opportunity is granted, so that any acceptable settlement can be arrived. If not settlement arises before the next date of hearing, the Resolution Plan will be heard on merits. We are of the view that application for approval of the Resolution Plan which has already been filed and pending consideration, the Adjudicating Authority ought to have considered and decided the Application for approval of the plan. It was also open for the Adjudicating Authority to consider I.A. No. 2594 of 2023 and to take a final decision. The plan having been approved on 08th January, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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