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TMI Blog2025 (2) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... rt-I), Kolkata passed in IA No.1490/KB/2023 approving the Resolution Plan submitted by the Successful Resolution Applicant (SRA) and order passed in IA No.1407/KB/2023 by which application filed by the Appellant objecting to the Resolution Plan has been rejected. The Appellant an Unsuccessful Resolution Applicant aggrieved by the aforesaid two orders has filed these two Appeals. 2. Brief facts of the case necessary to be noticed for deciding the Appeals are:- 2.1. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor- Indian Pulp and Paper Private Limited commenced on 22.07.2022. Resolution Professional published Form G- invitation for submission of Expression of Interest (EoI) on 23.10.2022. Last date for submission of EoI was 08.11.2022. Appellant submitted its EoI with a Consortium member Bhagwati Vintrade Private Limited. A list of Prospective Resolution Applicants (PRAs) was published on 14.11.2022 in which name of the SRA - Pinax Paper Mills Ltd. and Pinax Steel Industries Pvt. Ltd. was not there. The last date for submission of the Resolution Plan was extended till 10.01.2023. Resolution Plan was submitted by the Appellant on 10.01.2023. In the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2. No Resolution Applicants raised any objection against the extension of timeline or invitation to submit revised Resolution Plan. Last date for submission of the Resolution Plan being 27.02.2023 was extended till 02.03.2023. Resolution Professional received Resolution Plans from Brand Steel & Power Limited, Green Valliey Industries Limited and Pinax Paper Mills Private Limited. RKG Fund opted to continue with their earlier Resolution Plans. All Resolution Plans were opened in the 13th CoC meeting held on 06.03.2023. In the 14th CoC meeting held on 21.04.2023, all representatives of Resolution Applicants were invited to present their plans. Resolution Professional informed all the Resolution Applicants that the CoC is looking forward to an upward revision of the amount offered under the Resolution Plan and the Resolution Applicants may submit a revised upward financial offer and modify their plans by 27.04.2023. No objection was raised by any of the Resolution Applicants. Resolution Professional received financial offer only from two Resolution Applicants namely- Brand Steel & Power Limited, and Pinax Paper Mills Private Limited. All the plans were discussed in the 15th CoC meet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Professional. On 14.11.2022, Resolution Plans were submitted by the Appellant and other two applicants which came to be opened and discussed on 13.01.2023 by the CoC in which meeting one of the members of the CoC has informed that one applicant has expressed interest and want to become Resolution Applicant. Thereafter, the CoC extended the timeline for submission of the EoI and Resolution Plan in its meeting dated 07.02.2023. No fresh Form G was issued by the Resolution Professional, without issuing any fresh Form G. EoI and Resolution Plans was received from Pinax Paper Mills Private Limited and has been considered in the CIRP process. It is submitted that the name of Pinax Paper Mills Private Limited not being included in the list of PRA which was published on 14.11.2022. By virtue of Regulation 39(1B), the Committee could not have considered the Resolution Plan of the Pinax Paper Mills Private Limited. It is further submitted that by virtue of Regulation 36A (4-A), it was incumbent on the Resolution Professional to publish fresh Form G in event the timeline for submitting EoI being extended. The process adopted by the Resolution Professional was in violation of Regulation 36A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Plan which was submitted by the Appellant was not a compliant plan. EoI which was initially submitted by the Appellant was from Appellant with Bhagwati Vintrade Private Limited whereas when the plan was submitted, the name of Nippon Ispat Pvt. Ltd. was added which Resolution Plan was non-compliant and taking advantage of extension of time giving opportunity to Resolution Applicants to file fresh plan. Appellant filed fresh Resolution Plan by deleting the name of Nippon Ispat Pvt. Ltd., hence, Appellant took benefit of extension of timeline and has never objected to the extension of timeline. Appellant took benefit of extension of timeline by submitting a revised plan and thereafter CoC asked the applicants to enhance its financial offer and submit Resolution Plans. It cannot now turnover and object to the process adopted by the Resolution Professional and the CoC. Applicants who have taken benefit of extension of timeline cannot be allowed to question. It is submitted that the Appellant took chance to get his plan approved and it has only after voting has commenced, he filed IA No.1407 of 2023. It is submitted that the final list of PRA was published on 28.02.2023 in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is relevant to notice certain clauses of Invitation for Expression of Interest. Clause 6 dealt with 'last date of submission of EoI' which is as follows:- "6. LAST DATE OF SUBMISSION OF EOI The last date for submission of EOI is 08th of November 2022 ("Last Date"). Provided that the Resolution Professional may extend the Last Date, with consent/approval/ratification of the COC (at its sole discretion). Further, the Resolution Professional may (with COC consent/ approval/ratification) has the right to accept or reject any EOI submitted after the Last Date." 9. Proviso to Clause 6 clearly contained provisions for extension of last date with consent/approval of the CoC. Further, Resolution Professional entitled to accept or reject any EoI submitted after the last date. 10. Clause 9 contained heading 'important notices'. Clause 9 (a) and (c) are as follows:- "9. IMPORTANT NOTICES a) CoC has the right to cancel or modify or withdraw the process of invitation of EOI (including the timelines) or resolution plans without assigning any reason and without any liability. This is not an offer document and is issued with no commitment. b) COC has the right to amend or revise the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Resolution Applicant in future. In the said CoC meeting, one of the CoC members informed that one interested party has approached showing willingness to become a Resolution Applicant. Discussions took place as to whether in the interest to maximize value, a fair chance should be given to all interested parties by issuance of a new Form G or the interested party can be allowed at this stage without issuance of Form G. One of the members of the CoC was of the view that interested parties can be allowed at this stage without fresh issuance of Invitation for Expression of Interest and/or Form G pursuant to some rulings by Court which the CoC member would share with the Resolution Professional after the meeting and further discussions would take place in the next CoC meeting. I crave leave to refer to minutes of 11th COC meeting held on 30th January, 2023 at the time of hearing, if necessary. I also crave leave to refer to the Resolution Plan submitted by the Applicant in consortium with Bhagwati Vintrade Private Limited and Nippon Ispat Private Limited at the time of hearing, if necessary. p. In the 12th COC meeting held on 9th February, 2023, the Resolution Professional apprise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution applicants are instructed as under Existing PRAs need not submit EOl as they have already completed the process. They may submit a resolution plan, if they so desire, by the new stipulated date i.e. 27.02.2023. New PRAs can submit EOls along with required documents as mentioned in the annexures to this mail. Subsequently, we shall provide RFRP, Evaluation Matrix and Information Memorandum after issuing the final list of PRAS. Those who have already submitted their EOI may directly submit the Resolution Plan by the due date Please let me know in case you need any clarification. Sincerely, Avishek Gupta Resolution Professional Indian Pulp & Paper Private Limited (in CIRP)" 13. After issuance of e-mail dated 13.02.2023, list of PRA was published on 23.02.2023 by the Resolution Professional which is at page 381 of the paper book which is as follows : - "INDIAN PULP & PAPER PRIVATE LIMITED 23 February 2023 Issue of Prospective list of eligible Prospective Resolution Applicants (PRA) for submission of Resolution Plan for Indian Pulp & Paper Private Limited Company or Corporate Debtor): In the 12th CoC meeting, it was decided by the CoC, members to extend the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Pinax Steel Industries Pvt. Ltd. In case the RP/ CoC subsequently becomes aware or is made aware of any disqualification/ineligibility of any PRA (including but not limited to under Section 29A of the IBC), then the RP/CoC shall have the right to disqualify such PRA from the resolution process at any stage. **Inclusion of the PRA in the final list is subject to satisfaction of the RP on compliance with Section 29A of the IBC. Thanking You, For and on behalf of Indian Pulp & Paper Private Limited (in CIRP) Avishek Gupta Resolution Professional Indian Pulp & Paper Private Limited" 15. After the e-mail dated 13.02.2023, the Appellant has filed its Resolution Plan which resolution plan was filed with Brand Steel & Power Limited in consortium with Bhagwati Vintrade Private Limited. Thus, the plan which was submitted subsequent to 13.02.2023 did not contain the name of Nippon Ispat Pvt. Ltd. which was part of the earlier Resolution Plan. Resolution Professional in his reply in paragraph 3(t) & (u) pleaded as follows:- "t. It is pertinent to mention here that none of the Prospective Resolution Applicants including the Applicant raised any objection in respect of any of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 20th COC meeting held on 11th July, 2023 (continued on 14th July, 2023), upon a detailed deliberation on Resolution Plans and after considering the scoring on the Resolution Plan as determined on the basis of Evaluation Matrix, the COC decided that the Resolution Plans submitted by Pinax Paper Mills Private Limited in Consortium with Pinax Steel Industries Private Limited, Brand Steel & Power Limited in Consortium with Bhagwati Vintrade Private Limited and RKG Fund be put to vote, whereas the Resolution Plan submitted by Green Valliey Industries Limited shall be not be put for vote before the CoC as the plan had an element of conditionality." 17. The voting period for the voting of the plan was allocated from 19.07.2023 to 11.08.2023 and as per e-voting result on 11.08.2023, the plan of Pinax Paper Mills Private Limited was approved with 96.05% voting share. 18. Present is a case where CoC in its meeting held on 09.02.2023 decided to extend the timeline for submission of EoI and Resolution Plan. We have noticed above that Invitation for Expression of Interest itself contemplated extension of timeline by the CoC which is reflected in Clause 6 of the EoI. Thus, all Resolution A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the approval of the committee, issue request for resolution plan for sale of one or more of assets of the corporate debtor." 21. As per sub-regulation (5), any modification in the request for resolution plan has to be treated as fresh issue whereas extension of timeline with the approval of the committee has been separately dealt. Thus, modification of request for resolution plan and extension of timeline has been separately dealt in Regulation 36B. Applying the aforesaid analogy in Regulation 36A, it is clear that although any modification in the Invitation for Expression of Interest require publication of fresh Form G but Regulation 36A on its term does not contemplate publication of fresh Form G when timeline has been extended. In any view of the matter, the present is a case where Appellant who has aggrieved by the approval of the Resolution Plan and rejection of his IA was very much part of the CIRP process, he having expressed its interest in pursuance of the issuance of Form G and after extension of timeline, it was communicated by e-mail dated 13.02.2023 and after publication of list of Prospective Resolution Applicants on 23.02.2023, neither any objection was filed by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicants were not included in the list of PRAs. The Appeal filed by the Appellant was allowed and this Tribunal after referring to Regulation 39 (1-B) laid down following in paragraphs 10 and 11:- "10. The Regulation thus clearly provides that the committee shall not consider a resolution plan received from an application whose name does not appear in the list of PRAs. Admittedly, neither Patanjali nor other two applications have submitted any EOI nor their name was reflected in the List of PRAS. 11. Regulation 36A which provide for Invitation for Expression of Interest also empowers the CoC to modify the invitation for Expression of Interest. It is always open for the CoC to take a decision to not proceed on the Applications, EOI received and take a decision for issuance of fresh Form G and permit other applicants to participate. When no fresh Form G has been issued, it is not open for any new applicant to submit application before the Adjudicating Authority for being permitted to participate in the CIRP and submit Resolution Plan." 24. There can be no dispute to the proposition laid down by this Tribunal in the aforesaid judgment. Those two applicants whose plans were direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant i.e. WeP Solutions Ltd. submitted its resolution plan jointly with one Sattva Real Estate Private Ltd. (hereinafter referred to as "WeP") on 13-1- 2019. The appellant in Civil Appeals Nos. 2943-44 of 2020 i.e. Kalpraj submitted its EOI and resolution plan to RP on 27-1-2019." 26. Kotak Investment Advisors Limited (KIAL) immediately raised the objection permitting Kalpraj to submit Resolution Plan on 29.01.2019. However, the plan of Kalpraj was placed before the CoC and was approved by the CoC on 13.02.2019 and 14.02.2019. Application was filed by the Resolution Professional before the NCLT which by its order dated 28.11.2019 approved the Resolution Plan against which an appeal was filed by the Appellant in this Tribunal by KIAL which appeal was allowed by the Appellate Tribunal accepting the objection raised by KIAL. NCLAT also held that the procedure adopted by the Resolution Professional and CoC is in breach of the provisions of the IBC which has been noticed in paragraph 12 of the judgment, which is as follows:- "12. KIAL thereafter filed appeals before NCLAT on 18-2- 2020. The appeals were opposed by Kalpraj and also by RP on the ground, that the appeals were filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew, that in view of the paramount importance given to the decision of CoC, which is to be taken on the basis of "commercial wisdom", NCLAT was not correct in law in interfering with the commercial decision taken by CoC by a thumping majority of 84.36%." 28. Counsel for the Appellant contended that the above judgment of the Hon'ble Supreme Court is not attracted in the facts of the present case since the judgment of the Hon'ble Supreme Court was delivered on 10.03.2021 and the Regulation 36A (4A) as well as Regulation 39 (1B) were inserted in the CIRP Regulations 2016 on 30.09.2021 i.e. subsequent to the judgment. No dispute to the fact that the judgment of the Hon'ble Supreme Court was delivered prior to amendment in Regulations 36A and 39 of the Regulations 2016. The Hon'ble Supreme Court, however, was considering challenge to approval of the Resolution Plan within the meaning of Section 61(3). Section 61(3) enumerates the grounds on which appeal can be filed against the order approving the Resolution Plan. Sub-section (3) of Section 61 provides as follows:- "61. Appeals and Appellate Authority. -(3) An appeal against an order approving a resolution plan under section 31 may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & Power Limited in consortium with Bhagwati Vintrade Private Limited and Nippon Ispat Pvt. Ltd. was added in Resolution Plan was non-compliant which was also pointed out in the meeting of the CoC as well as by the Resolution Professional. After extending the timeline, the Appellant deleted Nippon Ispat Pvt. Ltd. as a Resolution Applicant and made the Resolution Plan compliant. Thus, the extension of timeline was availed by the Appellant to its benefit by filing a revised resolution plan making it compliant. (iii) Appellant or any other Resolution Applicants at no point of time has raised any objection against extension of timeline for submitting the EoI and the Resolution Plan or against the inclusion of Pinax Paper Mills Private Limited as one of the Resolution Applicants. (iv) Appellant participated in process of evaluation of Resolution Plan and it was only after voting has commenced on the Resolution Plan as per the decision of the CoC taken in its meeting held on 22.07.2023 that Appellant filed IA No.1407/KB/2023 objecting to the inclusion of Pinax Paper Mills Private Limited as a Resolution Applicant. (v) The Resolution Professional has taken all actions under the dire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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