TMI Blog2024 (4) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... the character of a legal grievance. It is settled proposition that approval of the Resolution Plan can be interfered with, only when the Resolution Plan violates any of the provisions of Section 30, sub-section (2) of the Code. It is relevant to notice that at the time when this utilities/ equipment/ installations were made the Corporate Debtor was subsidiary of the Appellant, the holding Company. Shared utilities and equipment installed outside the lease land area were permitted to be utilized and used both by the Corporate Debtor for running the Hotel as well as by the Appellant for the purpose of its residential block and commercial establishment. The Corporate Debtor being no longer subsidiary of the Appellant, which has now been taken over by the SRA, there has to be an arrangement between land owner, i.e., the Appellant and SRA for continuing use and access to the shared utilities and equipment. It is also relevant to notice that the SRA has taken the Hotel of Corporate Debtor as a running concern and for the purposes of running the Hotel, it requires use of shared utilities and services as it was being done prior to initiation of CIRP - there are no error in granting of reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er named as Shristi Hotel, subsequently known as Westin Hotel , run by the Corporate Debtor. (ii) On Section 7 Application under Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the Code ) filed by Yes Bank Ltd. the Corporate Insolvency Resolution Process ( CIRP ) commenced against the Corporate Debtor by order dated 11.02.2022. Shri Avishek Gupta, the Respondent No.1 herein was appointed as Interim Resolution Professional ( IRP ) and subsequently conformed as RP. On 28.04.2022, the RP issued Expression of Interest ( EOI ). (iii) An IA No.690(KB)/2022 was filed by the Appellant seeking direction from the Adjudicating Authority to exclude the subject property from CIRP of the Corporate Debtor. A prayer was also made for setting aside the Invitation of Expression of Interest dated 28.04.2022. Certain other IAs were also filed in the CIRP of the Corporate Debtor by other entities. (iv) The RP sought extension of CIRP from the Adjudicating Authority, which was allowed from time to time. The Resolution Plan was submitted by Respondent No.3, along with three other Resolution Applicants. On 30.05.2023, Resolution Plan submitted by Respondent No.3 was approved by 100% vote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating Authority by the impugned order has bound the Appellant in providing unfettered and unbridled access to the shared assets, utilities and equipment/ installations, which belong to the Appellant. The Corporate Debtor was merely allowed to use the same being a subsidiary of the Appellant. The Appellant having challenged the Resolution Plan, the permissive use granted to the Corporate Debtor stands withdrawn and SRA cannot be allowed to have any access to the shared utilities and premises unless permitted by the Appellant. The Resolution Plan has been approved by CoC, whereas several Applications including the Application filed by Rare ARC, questioning the composition of CoC was pending. The Appellant cannot be compelled to provide access to the shared utilities and services, which lay on the land, which is owned by the Appellant. There has to be an arrangement with the Appellant for permitting any access to the shared utilities and services. 5. Shri Ramji Srinivasan, learned Senior Counsel appearing for the RP refuting the submissions of learned Senior Counsel for the Appellant submits that the CoC has approved the Resolution Plan with 100% vote share. The commercial wisdom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant were only an attempt to obstruct and frustrate resolution of the Corporate Debtor. 6. The learned Senior Counsel for the CoC also refuted the submissions of the Appellant and submits that the Appellant being the erstwhile Promoter, has no locus to challenge the approval of the Resolution Plan. It is submitted that treatment of certain shared services under the Resolution Plan cannot be a ground to challenge the approval of the Resolution Plan, especially when the Resolution Plan expressly specifies that the provision relating shared services is not a condition precedent to the implementation of the Resolution Plan. Clause 8.4 and 8.5 of the Resolution Plan specifically provides that requirement of providing the Corporate Debtor/ SRA access to shared services/ utilities/ equipment/ installations would not be a condition precedent to the implementation of the Resolution Plan. The Resolution Plan has already been implemented by SRA and on 14.02.2024 first tranche of the financial payment has been made to relevant stakeholders of the Corporate Debtor. The SRA having acquired the Corporate Debtor as a going concern, permitting the Corporate Debtor to enjoy the shared assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d utilities. 8. We have considered the submissions of learned Counsel for the parties and have perused the records. 9. The Resolution Plan submitted by Respondent No.3, has been approved by the CoC with 100% vote share. There are only very limited ground to challenge the approval of Resolution Plan. The Hon ble Supreme Court in K. Sashidhar v. Indian Overseas Bank - (2019) 12 SCC 150 (paragraph 52) and Committee of Creditors of Essar Steel India Ltd. vs. Satish Kumar Gupta and Ors. - (2020) 8 SCC 531 (paragraph 67) has held that the Adjudicating Authority and the Appellate Tribunal are not to sit in appeal over the commercial wisdom of the CoC, which is paramount and non-justiciable and under the scheme of the Code, every dissatisfaction does not partake the character of a legal grievance. It is settled proposition that approval of the Resolution Plan can be interfered with, only when the Resolution Plan violates any of the provisions of Section 30, sub-section (2) of the Code. The grievance, which has been advanced by the Appellant in the present case is essentially with regard to reliefs and concessions granted by the Adjudicating Authority with regard to direction that Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heating Ventilation and Air Conditioning (HVAC) pipelines, Fire Fitting System, High Speed Diesel (HSD) pipelines etc. are interconnected with the Hotel Building erected on the Leased Land and Residential Tower erected outside the Leased Land but within 8 Acres Land, i.e., the Entire Land. The Corporate Debtor is maintaining, at its own costs, all such shared services till date as per information and explanations provided to the Resolution Applicant by the Resolution Professional. No formal agreement for such Shared Services was entered/executed between the Corporate Debtor and SIDCL as confirmed by Resolution Professional and the data available in VDR. On specific query, the Resolution Professional vide FAQs uploaded in the VDR confirmed as follows: Utilities services were designed as common shared services of hotel part, residential part and commercial part. Permissions, approvals and connections for such utilities were taken in name of SIDCL. Basic utilities outside leasehold premises which are necessary for Hotel Operations are as follows: Power Water Fire Prevention Sewerage Treatment Plant (STP) HVAC (mainly cooling towers) IT System Server 8.4 To keep the Corporate Debtor a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential Welfare Society/Association for the Serviced Apartments Tower II, if any, wish to use the Utilities Equipment/Installations, SIDCL and Serviced Apartments Welfare Association, as the case may be, shall pay such charges as may be mutually agreed, on built up area basis, in consideration of use of Utilities Equipment/Installations. The Resolution Applicant clarifies that the right to relocate the Equipment/Installations and any conditions to be provided for usage of Utilities Equipment/Installations by the Company Appeal (AT) (Insolvency) No.70 of 2024 14 SIDCL or the Residents of the Serviced Apartment Tower II/ Residential Welfare Society/Association for the Serviced Apartments Tower II, if any, shall not be a condition precedent for implementation of Resolution Plan and Financial Proposal in this Resolution Plan shall remain unaffected. The Corporate Debtor would be entitled for new electricity connection in its own name and utilise its space for new transformer and the West Bengal State Electricity Development Corporation shall provide the new connection on payment of requisite charges, in accordance with applicable law. 10. The above Clauses of Resolution Plan clearly ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease land area were permitted to be utilized and used both by the Corporate Debtor for running the Hotel as well as by the Appellant for the purpose of its residential block and commercial establishment. The Corporate Debtor being no longer subsidiary of the Appellant, which has now been taken over by the SRA, there has to be an arrangement between land owner, i.e., the Appellant and SRA for continuing use and access to the shared utilities and equipment. It is also relevant to notice that the SRA has taken the Hotel of Corporate Debtor as a running concern and for the purposes of running the Hotel, it requires use of shared utilities and services as it was being done prior to initiation of CIRP. We, thus, do not find any error in granting of reliefs and concessions as noted under paragraph-9 (7) quoted above. However, the grant of said reliefs and concessions cannot fetter the right of Appellant to enter into a fresh arrangement with SRA with regard to use of shared utilities, nor it can fetter the rights of the Appellant to seek appropriate relief in a competent Court with regard to shared utilities. In the CIRP of the Corporate Debtor, it was neither necessary, nor appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
