The National Company Law Appellate Tribunal (NCLAT) has held that the rejection of the resolution plan submitted by the suspended director of the corporate debtor by the Committee of Creditors (CoC) cannot be interfered with when the concerned director was present in all the meetings of the CoC and had still not submitted the plan in pursuance of the Invitation to Expression of Interest (EoI).
Procedures under the Corporate Insolvency Resolution Process (CIRP) were initiated against the Corporate Debtor. A number of people submitted their EoIs in accordance with Form-G. Three resolution plans were received in accordance with the Resolution Professional’s (RP) RFRP.
Clear all Your Doubts on RCM, TCS, GTA, OIDAR, SEZ, ISD Etc… Click Here
In accordance with the minutes of the Committee of Creditors (CoC) meeting on January 30, 2023, several new interested parties contacted the State Bank of India (SBI) after the deadline for expressing interest (EoI). The CoC discussed inviting interested parties or issuing a new Form-G. At its 12th meeting, the CoC agreed to extend the deadline for submitting the EoI and Resolution Plan.
Pinax Group, a successful resolution applicant, submitted a resolution plan on August 14, 2023, and it was accepted with a 97% majority of the CoC. The CoC resolved to vote on the received Resolution Plan at its 19th meeting. The appellant then submitted a letter asking for permission to make an offer that was on par with or better than the one that was currently being considered.
At its 20 meeting, the CoC reviewed and dismissed the Appellant’s proposed Resolution Plan. The Appellant then filed an Interlocutory Application (IA) in an attempt to have the entire CIRP process overturned and to be given the opportunity to submit the Resolution Plan in a newly issued Expression of Interest.
Clear all Your Doubts on RCM, TCS, GTA, OIDAR, SEZ, ISD Etc… Click Here
The Resolution Professional filed an application to approve the Resolution Plan, and the Adjudicating Authority granted it, rejecting the appellant’s application. The present appeal has been filed in opposition to these orders.
The Appellant submitted that the Form-G was required to be published afresh in the event the CoC considered permitting others to participate. The procedure adopted by CoC and RP is contrary to Regulation 36A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Regulations).
In contrast, the Respondent said that the Appellant is a Suspended Director of the CD, who attended all CoC meetings and never stated that it intended to submit a Resolution Plan or an EoI in accordance with Form-G, which was issued by the RP.
Since the appellant did not submit any EoI either in accordance with Form G published on October 10, 2022, or after the extension of time granted for submitting the resolution plan, the Tribunal New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member) noted that the appellant could not have any grievances regarding the Resolution Plan received after the extension of time.
Clear all Your Doubts on RCM, TCS, GTA, OIDAR, SEZ, ISD Etc… Click Here
The Tribunal further observed that the Appellant, as a Suspended Director, attended all of the CoC’s sessions and was informed of its ruling. The Appellant never showed interest or submitted an EoI, even after the CoC issued Form G and extended the deadline. Only on July 13, 2023, did the appellant write a letter asking to be allowed to submit an offer.
The Tribunal added that the CoC decided not to move forward with the Appellant’s plan because it believed that the Appellant’s goal was solely to interfere with the CIRP process and not to actually submit a plan. Given the foregoing, it cannot be claimed that the appellant’s plan was overlooked.
The Tribunal arrived at the conclusion that “the Adjudicating Authority rightly approved the Resolution Plan of Pinax, which was approved with 97% of the CoC’s vote share, by order dated 20.12.2024, which order need no interference, since no ground has been made out within meaning of Section 61(3) of the IBC.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
