IBC does not expressly bar that Resolution Plan value should be over and above Liquidation value | The approval of Resolution Plan below Liquidation value is within the commercial wisdom of CoC – Mr. Ramesh Kesavan Vs. CA Jasin Jose, RP SD Pharmacy Pvt. Ltd. – NCLAT Chennai
Hon’ble NCLAT holds that:
(i) In the instant case, the approval of the Resolution Plan below the Liquidation value is within the commercial wisdom of the CoC as the Code does not expressly bar that the Resolution Plan value should be over and above the Liquidation value. Hence, there is no material irregularity.
(ii) The Resolution Plan is approved by a 100 % voting share of the CoC and there is no material irregularity on the face of record and we are satisfied that the Resolution Plan conforms to the requirement set out in Section 30(2) of the Code.
(iii) The Hon’ble Delhi High Court in TATA Steel BSL v. Venus Recruiters Pvt. Ltd. (2023) ibclaw.in 09 HC has held that there is no bar to proceed against the concerned Resolution Applicants before other Fora/Courts in cases of avoidance transactions.
(iv) It has been held in Ravi Shankar Vedam vs. Tiffins Barytes Asbestos and Paints Ltd. and Ors. (2023) ibclaw.in 394 NCLAT that the Promoter /Shareholder of the Corporate Debtor Company has no locus to challenge the Plan, after its approval. The ratio of the Judgement in the matter of M.K. Rajagopalan v. Dr. Periasamy Palani Gounder & Anr. (2023) ibclaw.in 60 SC, is not applicable to the facts of the attendant case on hand as the subject matter of that case is that there was an established material irregularity in the approval of the Plan and the issue of the ‘locus’ has not been specifically been addressed to. More ever, the Judgement of the Hon’ble Apex Court in the matter of Ravi Shakar Vedam (Supra) is dated 06.11.2023 and is later than M.K. Rajagopalan (Supra) which is dated 03.05.2022.