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TMI Blog2025 (3) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Successful Resolution Applicant ("SRA") in the Corporate Insolvency Resolution Process ("CIRP") of M/s Metenere Limited. 2. Brief facts necessary to be noticed for deciding the Appeal are: (i) On an Application filed by State Bank of India ("SBI") under Section 7 against the Corporate Debtor ("CD") - M/s Metenere Ltd., CIRP commenced vide order dated 03.10.2020. (ii) In the CIRP of the CD, a Resolution Plan by one M/s Jubilee Metals Pvt. Ltd. was approved. However due to change in the constitutional operation of Jubilee Metals Pvt. Ltd., during the pendency of adjudication of Plan approval application, the Plan approval application was withdrawn. (iii) The RP on direction of the Adjudicating Authority issued fresh Form-G dated 02.12.2023, inviting Expression of Interest ("EoI") with respect to submission of Resolution Plan. List of Prospection Resolution Applicants was prepared by the RP, in which the name of the Appellant was also included. The Appellant and two other Resolution Applicants were not included in the final list of Prospective Resolution Applicant. (iv) An IA No.504 of 2024 was filed by the Appellant to include the Appellant's name in the final list of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2024. The voting lines were opened from 16.07.2024 to 23.07.2024, which was extended to 24.07.2024. The CoC after voting, approved the Resolution Plan of Orissa Metaliks by majority of 98.95% vote shares. (viii) An Application was filed by the RP, IA No.37 of 2024 seeking approval of Resolution Plan. IA No.504 of 2024 filed by the Appellant was dismissed on 04.09.2024 as infructuous, in view of the changed circumstances. The Adjudicating Authority heard IA No.37 of 2024 and by impugned order approved the Resolution Plan of the Orissa Metaliks. The Adjudicating Authority also directed the RP to deposit the entire Plan amount of Rs.295,14,95,611/- in a high interest-bearing account, which was to be distributed as and when the Adjudicating Authority adjudicated the Applications filed by different stakeholders and the balance, will go to the benefit of the CoC Members. The Appellant aggrieved by the approval of the Resolution Plan vide order dated 04.10.2024 has filed this Appeal. 3. We have heard Shri Gaurav Mitra, learned Counsel appearing for the Appellant; Shri Ankur Mittal, learned Counsel appearing for CoC and Shri Vaijayant Paliwal, learned Counsel appearing for the RP. 4. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duly considered. The commercial wisdom of the CoC, cannot be questioned or interfered with by the Adjudicating Authority. 6. We have considered the submission of learned Counsel for the parties and have perused the record. 7. From the facts, which have been brought on the record, it is clear that the Appellant was one of the Resolution Applicants, who was permitted to submit a Resolution Plan. The Appellant submitted its revised Resolution Plan and the last revised Resolution Plan submitted by the Appellant was dated 24.06.2024. Three Resolution Plans, i.e, of the Appellant, Orissa Metaliks and Hampton came for consideration. The Plan submitted by Hampton was decided not to put for voting, it being not compliant. A decision was taken in 35st CoC Meeting dated 11.07.2024 to put the Plan of Appellant and Orissa Metaliks for voting. The above facts have been clearly noticed by the Adjudicating Authority in paragraphs 4.11 and 4.12, which are as follows: "4.11. In the 35th meeting of the CoC on 11 July 2024, the terms of all resolution plans received by the Applicant/RP were duly considered and evaluated by the CoC in terms of their feasibility, viability and commercial soundness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s follows: "16.8 Step III- Discussions and Negotiation by the CoC: The CoC and/or the Resolution Professional (acting on the instructions of the CoC) may, at their sole discretion, decide any method or process for negotiations with the Resolution Applicant(s) regarding the Resolution Plans, which may include, but shall not be limited to, a price discovery process, outbidding process, or any other challenge mechanism, and each Resolution Applicant shall be bound by the terms governing such a process, which shall be decided by the CoC in its commercial wisdom subject to the CIRP Regulations the details of which will be intimated to the Resolution Applicants at the appropriate stage. Notwithstanding anything contained herein, the CoC reserves the right to engage in discussions with any Applicant, in any manner or order as they may deem appropriate. Further, the Applicant shall not challenge any actions taken/ to be taken by the Resolution Professional or the CoC, in accordance with the provisions of the RFRP and/ or the Code. The CoC, in its discretion, may decide to adopt Swiss Challenge Mechanism or any other challenge mechanism to ascertain the Successful Resolution Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while evaluating the resolution plan submitted by the Applicant along with other points/contentions mentioned in our application filed before the Adjudicating Authority challenging our ineligibility to submit the resolution plan and participate as Resolution Applicant in the CIRP process of Metnere Ltd. Should you require further clarifications on the matter, we would be happy to provide the same. We also await the confirmation from Resolution Professional for intimating by when the plants will re-start operations so that we could conduct our site visit or if plants are not expected to restart in near future then let us know accordingly so that we can submit financially improved resolution plan in next 2/3 days. Also kindly confirm by when you propose to carry out Swiss Challenge as contemplated in RFRP. Warm Regards Namita Sachdeva Findoc Financial Services Group Mobile #7814302860 Office: 4th and 5th Floor, Kartar Bhawan, Near PAU Gate No-1, Ferozepur Road, Ludhiana-141001 Desk: +91 (0)161-4155000) Extn: 847 Email #[email protected]." 12. The RP immediately replied to the Appellant's email on 02.07.2024, which reply has been brough on record as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2024, without changing commercial terms. Another email sent by the RP on 09.07.2024 to all Resolution Applicants, is as follows: "Subject: RE : Final Submission of Resolution Plan Importance: High Dear Madam, As requested by you in trailing mail, please ensure to submit the Resolution Plan (without changing the commercial terms) by 10 July 2024 positively. Best regards, Surendra +919717390678 Surendra Raj Gang (IBBI/IPA-001/IP-P010066/2017-2018/11773) Resolution Professional (RP) Metenere Limited" 14. When the final Resolution Plan has been submitted by all Resolution Applicants by 24.06.2024, there was no occasion to permit any Resolution Applicant to enhance its financial offer. The Resolution Plan was submitted by the Appellant on 24.06.2024 and all Resolution Applicants were permitted to submit their revised Resolution Plan within the time allowed. After revised Resolution Plans have been submitted by Resolution Applicants, no Applicant can be permitted to enhance its financial offer. 15. The Appellant is only a Resolution Applicant and his claim can at best be with regard to considering of his Resolution Plan in accordance with law by the CoC. The Resolu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment made by their team of experts. The opinion on the subject- matter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the "commercial wisdom" of the individual financial creditors or their collective decision before the adjudicating authority. That is made non- justiciable. 59. In our view, neither the adjudicating authority (NCLT) nor the appellate authority (Nclat) has been endowed with the jurisdiction to reverse the commercial wisdom of the dissenting financial creditors and that too on the specious ground that it is only an opinion of the minority financial creditors. The fact that substantial or majority per cent of financial creditors have accorded approval to the resolution plan would be of no avail, unless the approval is by a vote of not less than 75% (after amendment of 2018 w.e.f. 6-6-2018, 66%) of voting share of the financial creditors. To put it differently, the action of liquidation process postulated in Chapter III of the I&B Code, is avoidable, only if approval of the resolution plan is by a vote of not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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