Whether a Suspended Director/Promoter of Corporate Debtor who is also a Resolution Applicant (a dual role) is entitled to access Resolution Plans submitted by others Resolution Applicants, as per Vijay Kumar Jain Vs. Standard Chartered Bank judgment – Prasada Raju M.R.V Vs. Sri. Vamsi Kambhammettu, RP of Mantena Laboratories Ltd. – NCLT Hyderabad Bench

In this important judgment, Hon’ble NCLT Hyderabad Bench holds that:

(i) A Resolution Applicant can attend CoC meeting only in respect of the plan that was submitted by him, and will have no access to the Resolution Plans submitted by others.
(ii) The cited caselaw of Vijay Kumar Jain Vs. Standard Chartered Bank (2019) ibclaw.in 24 SC also does not support the Applicant’s argument.
(iii) In the present case, not only the Applicant is related to the CD, being a promoter/director, he is also a Resolution Applicant. The CD being the MSME, he was permitted to submit a Resolution Plan. However, he was rightly kept out by the CoC from the proceedings of examination and evaluation of the Resolution Plans submitted by other Resolution Applicants.
(iv) The ‘conflict of interest’ for the Applicant, who was part of the CoC in the dual capacity did not end with him being rejected as Resolution Applicant. His capacity to be an impartial observer of the CoC’s deliberations was compromised and his views on the Resolution Plan submitted by any other Resolution Applicant would necessarily have a potential of bias even after he was out of the race.

Whether a Suspended Director/Promoter of Corporate Debtor who is also a Resolution Applicant (a dual role) is entitled to access Resolution Plans submitted by others Resolution Applicants, as per Vijay Kumar Jain Vs. Standard Chartered Bank judgment – Prasada Raju M.R.V Vs. Sri. Vamsi Kambhammettu, RP of Mantena Laboratories Ltd. – NCLT Hyderabad Bench Read Post »