After approval of Resolution Plan, it was not open to any person to challenge the Expression Of Interest (EOI) – JM Financial Asset Reconstruction Company Ltd. Vs. M/s. Well-Do Holdings and Exports Pvt. Ltd. & Ors. – NCLAT New Delhi
It is true that the clause relating to forfeiture of Rs.100 Crores was arbitrary but persons having not challenged the ‘expression of interest’ published on 14th May, 2018, till the ‘resolution plan’ was approved by the ‘Committee of Creditors’, we are of the view that after approval of ‘resolution plan’, it was not open to any person to challenge the same.
The shareholders and promoters being ineligible to file the ‘resolution plan’ under Section 29A, they have no right to raise their grievance with regard to the ‘expression of interest’ published on 14th May, 2018 fixing ‘earnest money deposit’ of Rs.100 Crores.
In this background, it was not open for the Adjudicating Authority to entertain Interlocutory Application Nos. 409/2018 and Interlocutory Application Nos. 450/2018, which were filed by the ‘shareholders’ and ‘promoters’, who were ineligible to submit the ‘resolution plan’ and that too after approval of the ‘resolution plan’ by the ‘Committee of Creditors’.
In ‘Arcelor Mittal vs. Satish Kumar Gupta’ reported in [2018] ibclaw.in 31 SC, the Hon’ble Supreme Court noticed a similar situation where ‘resolution plan’ approved by the ‘Committee of Creditors’ was before Adjudicating Authority for its approval. The Hon’ble Supreme Court held that at that stage no application before the Adjudicating Authority is maintainable as there being no vested right or fundamental right in the ‘resolution applicant’ to have its ‘resolution plan’ approved and as no adjudication has been done. The Hon’ble Supreme Court also held that the Adjudicating Authority, acting quasi-judicially can determine whether the ‘resolution plan’ is violative of the provision of law including Section 29A of the ‘I&B Code’, after hearing the arguments of the ‘resolution applicant’ as well as the ‘Committee of Creditors, after which an appeal can be preferred from the decision of the Adjudicating Authority. Once the ‘resolution plan’ is approved by the ‘Committee of Creditors’ and has been placed before the Adjudicating Authority, the determination of the Adjudicating Authority can be challenged before the Appellate Tribunal or before the Hon’ble Supreme Court under Section 62 of the I&B Code, if the question of law arises out of such order.