The National Company Law Appellate Tribunal (NCLAT) has ruled that the NCLT (National Company Law Tribunal) cannot direct for invitation of fresh bids from resolution applicants once the plan for resolution is approved by Committee of Creditors (CoC).
The decision came in the appeal of M/s Renganayak Agencies who submited that the Adjudicating Authority had committed an error in considering the fact that the ‘Resolution Plan’ of the ‘unsuccessful Resolution Applicants’ were rejected by the ‘Committee of Creditors’ since they had not met the 66% criteria and were denied the right to a second vote by an order dated 17.02.2020.The Appellant also brought to the notice of this ‘Tribunal’ that the ‘Committee of Creditors’ with 100% voting share had approved the ‘Resolution Plan’ submitted by KALS Group and projects a plea that it is the Commercial decision of the Committee Creditors in approving or rejecting a certain Resolution Plan.
Judicial Member Justice Venugopal M. and Technical Member V.P. Singh while allowing the appeal held, “On a careful consideration of the submissions advanced on either side, this ‘Tribunal’ after going through the impugned order dated 24.02.2021 in IA No. 1094/2020 in CP (IB) No. 7/HDB/2019 inter alia to the effect that … “we are of the view that there is a need for further pursuance of the resolution plan and with the very hope that the Corporate Debtor may fetch better value that what has been offered by the Resolution Applicants. In this case, even though the Resolution Plan M/s. KALS Group has been approved with 100%voting in favour of it by the Committee of Creditor in view of the very meagre difference between both the resolution plant, we are of the view that there is scope for further improvement of the Resolution amount to be payable by the Resolution Applicants’ and the direction issued to the Committee of Creditors to take fresh bids from the existing two Resolution Applicants to submit a Resolution Plan for its consideration within a period one month” are clearly unsustainable in view of the recent judgment of the Hon’ble Supreme Court in Kalpraj Dharamshi &Anr. V. Kotak Investment Advisors Ltd. &Anr dated 10.03.2021, which squarely applies to the facts of the present case.”
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