Rights of Unsuccessful Resolution Plan

Whether, after approval of Resolution Plan and issuance of LoI, an Unsuccessful Resolution Applicant can question the conduct of the Committee of Creditors(CoC) and challenge Resolution Plan of Successful Resolution Applicant(SRA) – Dhansagar Dealers Pvt. Ltd. Vs. Mr. Anubrata Gangoly, RP of Carnation Industries Ltd. – NCLT Kolkata Bench

In this important judgment, while approving resolution plan in the matter of Carnation Industries Ltd., Bench of Kolkata NCLT comprising of Ms. Bidisha Banerjee and Shri Arvind Devanathan, has held that:

(i) Any modifications or revisions of any plan after the approval of the plan by the CoC, even if undertaken as per directions of the CoC, shall not be entertained unless the CoC grants the subsequent approval.
(ii) An unsuccessful resolution applicant has no vested right to challenge the approval of a resolution plan.
(iii) The approval of Resolution Plan falls within the arena of “commercial wisdom” which cannot be questioned unless there is a violation of law as enshrined under Sections 30(2) and 31 of the I&B Code.
(iv) Once a resolution applicant fails to succeed in the bid, it neither has a locus to question the action of the stakeholders qua members sitting in and controlling the CoC, nor the right to enhance or revise the monetary value of its Resolution Plan to compete with the plan of the Successful Resolution Applicant.

Whether, after approval of Resolution Plan and issuance of LoI, an Unsuccessful Resolution Applicant can question the conduct of the Committee of Creditors(CoC) and challenge Resolution Plan of Successful Resolution Applicant(SRA) – Dhansagar Dealers Pvt. Ltd. Vs. Mr. Anubrata Gangoly, RP of Carnation Industries Ltd. – NCLT Kolkata Bench Read Post »

No Resolution Applicant has any vested right to have its Resolution Plan approved – Kanoria Energy & Infrastrcuture Ltd. Vs. Mr. Avishek Gupta, Erstwhile RP Sarga Hotel Pvt. Ltd. and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that Commercial wisdom of the CoC has paramount important and CoC did consider the resolution plan submitted by the Appellant dated 11th April, 2023 and all the resolution plans were voted. It is well settled that no resolution applicant has any vested right to have its plan approved.

No Resolution Applicant has any vested right to have its Resolution Plan approved – Kanoria Energy & Infrastrcuture Ltd. Vs. Mr. Avishek Gupta, Erstwhile RP Sarga Hotel Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

Once the majority of CoC decide on one of Resolution Plan, the decision of the CoC attains finality, Unsuccessful Resolution Applicant has no locus to challenge the commercial decision of the CoC – G. S. Constructions Vs. Mr. Gajesh Labhchand Jain – NCLT Mumbai Bench

NCLT Mumbai Bench held that:
(i) Once the majority of CoC decide on one of the Resolution Plan, the decision of the CoC attains finality.
(ii) Since the CoC comprising of SIDBI and the home buyers approved the Resolution Plan presented by Mrs. Asha Sanap, the Unsuccessful Resolution Applicant has no locus to challenge the commercial decision of the CoC.
(iii) The Applicant who himself was Prospective Resolution Applicant had submitted its Resolution Plan. At no stage, the Applicant challenged the constitution of the CoC. The Applicant is seeking relief to set aside and quash the CoC only after his plan not approved with the requisite voting of the CoC.

Once the majority of CoC decide on one of Resolution Plan, the decision of the CoC attains finality, Unsuccessful Resolution Applicant has no locus to challenge the commercial decision of the CoC – G. S. Constructions Vs. Mr. Gajesh Labhchand Jain – NCLT Mumbai Bench Read Post »

Whether change of business of the Corporate Debtor by Successful Resolution Applicant is permissible in Resolution Plan? – Jaydip Ghosh, Director of suspended Board of Directors of Castal Extrusion Pvt. Ltd. Vs. Niraj Agarwal, RP of Castal Extrusion Pvt. Ltd. – NCLAT New Delhi

In this important judgment, NCLAT held that:
(i) Law is settled on the point that the suspended Board of Directors have got no locus to file an appeal against the approval of the plan by CoC and finally approved by the Adjudicating Authority
(ii) It has already been held that an unsuccessful resolution plan applicant has got no vested right and also settled that acceptance of plan is commercial wisdom of the CoC.
(iii) The provision particularly Section 5(26) of the IBC permits a resolution plan that entails restructuring. Similarly Regulation 37(ba) also permits restructuring, whereas Regulations 37(a) and (b) even permit for transfer of all or part of the assets and also sale of all or part of the assets of the CD. Only requirement is to see whether situation permits to do the same in the interest of the concerned creditors.
(iv) it was commercial wisdom of the CoC to accept the plan which has been noticed by way of change of the business of the CD.

Whether change of business of the Corporate Debtor by Successful Resolution Applicant is permissible in Resolution Plan? – Jaydip Ghosh, Director of suspended Board of Directors of Castal Extrusion Pvt. Ltd. Vs. Niraj Agarwal, RP of Castal Extrusion Pvt. Ltd. – NCLAT New Delhi Read Post »

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