The National Company Law Appellate Tribunal ( NCLAT ) Chennai bench has held that Coc’s appeal against resolution plan becomes infructuous on approval of the second resolution plan.
Excel Commosale Private Limited, Encord Trading Private Limited, Stanley Suppliers Private Limited, the Appellants were the member of the Committee of Creditors who puts a challenge to the Impugned Judgment of 03.04.2024 as it was passed on IA (IBC) No. 329 / 2023 in CP (IB) No. 78 / 7 / AMR / 2020. The Adjudicating Authority while dismissing the Petition as against the Resolution Plan of 11.02.2023, left it open that, a fresh CIRP proceedings will be resorted to by invitation of Form G, and the same was directed to be proceeded with on merits as per law.
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The counsel for the Appellants submittedthat subsequent thereto, the process has been resorted to in pursuance to the direction issued by the Impugned Judgment under challenge, which has already been carried and the fresh Resolution Plan has been invited and later on, it stood approved too. Consequent to which, for all practical purposes, his Appeal has been rendered infructuous.
The finding regarding the Committee of Creditors’ style of operation, which is documented in Paragraph 35, has caused the appellants’ counsel to voice his concerns. Regarding the concern raised regarding the conclusion found in Paragraph 35 of the contested judgment, we believe that, as the aforementioned conclusion would only apply to the contested judgment in the current appeal, it should not be applied when the second Resolution Plan is being evaluated on its own merits. In light of the findings documented in Paragraph 35,
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It is made clear that the actions taken once the new resolution plan is accepted will proceed without reference to the remarks made in the contested judgment. According to the appellants’ counsel, the instant Company Appeal (AT) has been declared infructuous and is now dismissed as such because the factum of approval of the second Resolution Plan has already been brought to our attention. If there are any related pending interlocutory applications, they will be closed.
In this appeal, the appellants, who are the successful resolution applicants, contest the validity of the contested judgment of 03.04.2024, which was issued in CP (IB) No. 78 / 7 / AMR / 2020 in IA (IBC) No. 329 / 2023. Because of this, the learned adjudicating authority has rejected the Resolution Plan of 11.02.2023, which was approved by a unanimous vote of the CoC. Instead, a new Resolution Plan was left open for invitation, and as a result, Form G was sent out to the other Resolution Applicants. This was completed and submitted, and the second Resolution Plan in accordance with the judgment dated 03.04.2024 has already been approved.
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The appellants’ counsel argues that even though the second resolution plan has been accepted and approved in accordance with the contested judgment, it will not make the appeal itself null and void and that it should be decided on its merits. A two memeber bench of Justice Sharad Kumar Sharma, Member (Judicial) and Indevar Pandey, Member (Technical) viewed that ultimately after visualising the fact that, in the absence of their being a challenge given to the acceptance of the second Resolution Plan, in fact, no material benefit would be gained by the Appellants, in putting a challenge to the Impugned Order dated 03.04.2024, because for all practical purposes, the lis which was sought to be adjudicated by the Appellants in the instant Appeal has been rendered infructuous.
In accordance with the law, which has been used as a result of the contested judgment of 03.04.2024, the appeal would be dismissed as having rendered infructuous with the liberty left open for the appellants to challenge the acceptance of the second Resolution Plan. If advised to do so, he may file an appropriate appeal challenging the acceptance of the second Resolution Plan.
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