Whether Committee of Creditors (CoC) can reject settlement proposal under Sec. 12A of IBC submitted by Suspended Directors arbitrary? – Sandeep Gupta Vs. JM Financial Asset Reconstruction Company Ltd. & Anr. – NCLAT New Delhi
Hon’ble NCLAT holds that:
(i) Section 12A provides for withdrawal of the application admitted under Section 7 or 9, on an application made by the applicant with the approval of 90% voting share of the Committee of Creditors. Application has to be filed as per procedure provided under Regulation 30A. The objective of Section 12A and Section 29A are totally different. Section 29A is a provision which debars certain categories of applicants from submitting Resolution Plan whereas Section 12A is entirely different provision where CIRP can be withdrawn after admission.
(ii) The question of ineligibility of Promoters to submit the proposal does not arise under Section 12A.
(iii) The Prospective Resolution Applicants have only right for consideration of their Resolution Plan by the CoC in accordance with the CIRP. Mere fact that they have submitted a Resolution Plan does not give them any right to get their plan approved, especially when CoC was interdicted from not considering plan by interim order passed in these Appeals.