Rplan-AA/NCLT sendback/remit Resolution Plan to CoC

CIRP Claim filing ‘Form’ is directory, claim must be supported by proof is important | NCLT can recall Resolution Plan approval order passed under Sec. 31(1) of IBC | Claim filed in wrong Form/category would have to be accorded due consideration in the category to which it belongs – Greater Noida Industrial Development Authority Vs. Prabhjit Singh Soni and Anr. – Supreme Court

/ 59 minutes of reading

In this landmark decision, Hon’ble Supreme Court rules that:

(i) Even if a claim submitted by a creditor against the CD is in a Form not as specified in the CIRP Regulations, 2016, the same has to be given due consideration by the IRP or the RP.
(ii) If a claim is submitted by an operational creditor claiming itself as a financial creditor, the claim would have to be accorded due consideration in the category to which it belongs provided it is verifiable.
(iii) The use of the words “a person claiming to be an operational creditor” in the opening part of CIRP Regulation 7, and the words “a person claiming to be a financial creditor” in CIRP Regulation 8, indicate that the category in which the claim is submitted is based on the own understanding of the claimant.
(iv) Once the claim was submitted with proof, it could not have been overlooked merely because it was in a different Form. The Form in which a claim is to be submitted is directory. What is necessary is that the claim must have support from proof.
(v) If any such shortcoming appears in the resolution plan, it may send the resolution plan back to the COC for re-submission after satisfying the parameters so laid down.
(vi) A Court or a Tribunal, in absence of any provision to the contrary, has inherent power to recall an order to secure the ends of justice and/or to prevent abuse of the process of the Court.
(vii) Even in absence of a specific provision empowering the Tribunal to recall its order, the Tribunal has power to recall its order.
(viii) However, such power is to be exercised sparingly, and not as a tool to re-hear the matter.
(ix) The recall application was maintainable notwithstanding that an appeal lay before the NCLAT against the order of approval passed by the Adjudicating Authority.

CIRP Claim filing ‘Form’ is directory, claim must be supported by proof is important | NCLT can recall Resolution Plan approval order passed under Sec. 31(1) of IBC | Claim filed in wrong Form/category would have to be accorded due consideration in the category to which it belongs – Greater Noida Industrial Development Authority Vs. Prabhjit Singh Soni and Anr. – Supreme Court Read Post »

Resolution Plan approved by CoC is binding on CoC and it cannot have reviewed its own decision or pray for review of its opinion | Resolution Plan cannot be remitted/sent back by Adjudicating Authority to CoC for re-consideration except when there is violation of Section 30(2) of IBC – Nivaya Resources Pvt. Ltd. v. Asset Reconstruction Company (India) Ltd. and Anr. – NCLAT New Delhi

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In this landmark judgment, Hon’ble NCLAT has settled the issue on send back the Resolution Plan to CoC for re-consideration.
The Hon’ble Bench comprising of Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) has held that the Resolution Plan approved by the CoC is binding on the CoC and it cannot have reviewed its own decision or pray for review of its opinion. Even prior to the approval of the Adjudicating Authority, Resolution Plan is binding inter se between the CoC and the Successful Resolution Applicant.
However, the Bench referring Hon’ble Supreme Court judgment in K. Sashidhar v. Indian Overseas Bank and Ors. [2019] ibclaw.in 08 SC and giving paramount status to the commercial wisdom of the CoC held that the law is well settled that the Adjudicating Authority has ample power to remit the Resolution Plan for reconsideration by the CoC when there is violation of Section 30(2).
The Bench concludes that there can be no quarrel to the proposition that if the Resolution Plan submitted by the Resolution Applicant is not in accord with Section 30(2), it can be sent back to the CoC.
The Bench has also added other circumstances under which Resolution Plan can be remitted by the Adjudicating Authority, where the Resolution Applicant acquires any ineligibility subsequent to the approval of the Resolution Plan or there is breach of any condition of the Resolution Plan which make Resolution Applicant does not entitle to implement the plan.

Resolution Plan approved by CoC is binding on CoC and it cannot have reviewed its own decision or pray for review of its opinion | Resolution Plan cannot be remitted/sent back by Adjudicating Authority to CoC for re-consideration except when there is violation of Section 30(2) of IBC – Nivaya Resources Pvt. Ltd. v. Asset Reconstruction Company (India) Ltd. and Anr. – NCLAT New Delhi Read Post »

Can CoC allow all Resolution Applicants to enhance their plan with an object of maximization of value of assets? – CoC of Tamra Dhatu Udyog Pvt. Ltd. Vs. Ms. Mamta Binani RP – NCLT Kolkata Bench

/ 17 minutes of reading

NCLT Kolkata Bench held that:
(i) It is settled position of law that Adjudicating Authority can return the plan for reconsideration, to the COC albeit on limited grounds.
(ii) The Adjudicating Authority should have the power to allow the prayer of the COC of the Corporate Debtor of permitting all the PRAs to enhance their plans financially giving them a level playing field.
(iii) allowed this application and allow all the Participating Resolution Applicants by giving a last, equal and fair opportunity to submit their revised and/or enhanced resolution plans to the RP of the Corporate Debtor. If required fresh timelines may be provided to all the Participating Resolution Applicants who wish to enhance and/or revise their resolution plans, keeping in view the prescribed timelines of completion of the CIR Process and voting period may also be extended if necessary.

Can CoC allow all Resolution Applicants to enhance their plan with an object of maximization of value of assets? – CoC of Tamra Dhatu Udyog Pvt. Ltd. Vs. Ms. Mamta Binani RP – NCLT Kolkata Bench Read Post »

Pursuing the matter before MSME facilitation Council under MSME Act, 2006 is not a bar for filing a petition u/s 9 of IBC, the proceedings before Council are not in nature of dispute – LBF Publications Pvt. Ltd. Vs. A & A Business Consulting Pvt. Ltd. – NCLT Mumbai Bench

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NCLT held that in the case of M/s Consolidated Construction Consortium Ltd. v. M/s Hitro Energy Solutions (P) Ltd. (2022) ibclaw.in 09 SC, the Hon’ble Supreme Court held that debt arising out of advance payment for supply of goods and services is an operational debt. Accordingly, we find no substance in the agreement that the amount of advance cannot said to be an Operational Debt. Further, pursuing the matter before MSME facilitation Council under MSME Act is not a bar for filing a petition u/s 9 of the Code, the proceedings before Council are not in nature of dispute. Further the plea of bar u/s. 10A also does not have any merit, as section 10A bars filing of petitions arising from defaults occurring during the period specified therein, and the default arises when a debtor face to pay the debt to the Creditor on the date on which it falls due. The date of post-dated cheques does not result into any default, hence, such cheques issued for presentation during 10A period cannot bar filing of an application.

Pursuing the matter before MSME facilitation Council under MSME Act, 2006 is not a bar for filing a petition u/s 9 of IBC, the proceedings before Council are not in nature of dispute – LBF Publications Pvt. Ltd. Vs. A & A Business Consulting Pvt. Ltd. – NCLT Mumbai Bench Read Post »

There is no lack of jurisdiction in Adjudicating Authority to remit Resolution Plan to CoC for reconsidering the amendment which Successful Resolution Applicant himself was requesting to be carried out – Ocean Capital Market Ltd. Vs. Uday Narayan Mitra Former RP of Arss Infrastructure Projects Ltd. – NCLAT New Delhi

/ 12 minutes of reading

NCLAT has allowed the appeal and set aside NCLT order observing that the present is a case where the Corporate Debtor is sought to be revived by a Resolution Plan which was approved by the majority. The Appellant’s Resolution Plan value is Rs.432.90 Crore where the liquidation value of the Corporate Debtor was only Rs.147.11 Crores. The Successful Resolution Applicant has proposed an excess amount of Rs.285.79 Crores. The Resolution Applicant having himself expressed not insist for assignment of Personal and Corporate Guarantees and to be continued with the Dissenting Financial Creditors, the Adjudicating Authority ought not to have rejected the Resolution Plan and accepting the request of the Dissenting Financial Creditor ought to have remitted the plan to the CoC for reconsideration.

There is no lack of jurisdiction in Adjudicating Authority to remit Resolution Plan to CoC for reconsidering the amendment which Successful Resolution Applicant himself was requesting to be carried out – Ocean Capital Market Ltd. Vs. Uday Narayan Mitra Former RP of Arss Infrastructure Projects Ltd. – NCLAT New Delhi Read Post »

Once a Resolution Plan approved & submitted to AA, CoC cannot turn around and pray to Adjudicating Authority to send the Rplan back for consideration and CoC cannot be allowed to change its view – Express Resorts and Hotels Ltd. Vs. Amit Jain, RP, Neesa Leisure Ltd. – NCLAT New Delhi

/ 35 minutes of reading

In this landmark judgment, NCLAT has cleared that when a Resolution Plan, has been approved after due deliberations, in exercise of commercial wisdom of the CoC, it has to be accepted that Corporate Debtor was decided to be revived by the Resolution Plan. The mere fact that certain other offers have been received after the approval of the Resolution Plan, CoC cannot have a change of heart and start clamoring before the Adjudicating Authority that they have no objection to sending back the Resolution Plan for reconsideration. This will be permitting an unending process, since by passing of time situation keeps on changing. After coming to know about the financial offer in a Plan, which has been approved by the CoC, any subsequent offer by any entity, who did not participate in the process earlier, cannot be entertained.

Once a Resolution Plan approved & submitted to AA, CoC cannot turn around and pray to Adjudicating Authority to send the Rplan back for consideration and CoC cannot be allowed to change its view – Express Resorts and Hotels Ltd. Vs. Amit Jain, RP, Neesa Leisure Ltd. – NCLAT New Delhi Read Post »

In what circumstances and conditions, Adjudicating Authority can send back a Resolution Plan to CoC for carrying out changes? – Noble Marine Metals Co WLL Vs. Kotak Mahindra Bank Ltd. – NCLAT New Delhi

/ 15 minutes of reading

By the Impugned Order, the Adjudicating Authority remitted the Resolution Plan back to the CoC for reconsideration in accordance with law. Present is a case where reconsideration is being asked only with regard to clause which was included in the Resolution Plan relating to release of personal guarantee of the promoters which according to Committee of Creditors is not in accordance with law. The Adjudicating Authority has held that it is open to CoC to deliberate the Plan in accordance with law which directions cannot be faulted with more so when the Resolution Applicant himself consented before the Adjudicating Authority. NCLAT held that the Adjudicating Authority if finds on given set of facts that parameters under Section 30(2)(e) have not been kept in view, the Resolution Plan can be sent back to the CoC to review such plan after satisfying the parameters. The above is the only situation provided by Hon’ble Supreme Court where the plan can be sent back.

In what circumstances and conditions, Adjudicating Authority can send back a Resolution Plan to CoC for carrying out changes? – Noble Marine Metals Co WLL Vs. Kotak Mahindra Bank Ltd. – NCLAT New Delhi Read Post »

Whether CoC after having approved a Resolution Plan can seek direction to consider a new Resolution Plan of a third party who was not a part of the CIRP Proceedings, and seek to withdraw their approval after more than 2 years of the approval of the first Resolution Plan – Kalinga Allied Industries India Pvt. Ltd. Vs. CoC (Bindals Sponnge Industries Ltd.) – NCLAT New Delhi

/ 20 minutes of reading

NCLAT held that the existing framework does not provide any scope for effecting any further modifications or withdrawals of the CoC approved Resolution Plan by the SRA or the Creditors. The Adjudicating Authority can interfere only if the Plan is against the provisions of the Code. Once the Plan is submitted to the Adjudicating Authority, it is binding and irrevocable as between the CoC and the SRA in terms of the provisions of the Code. The ‘Maximisation of Value of Assets’ ought to be ‘within the specified timelines’ and if it is not a ‘timebound process’, the entire scope and objective of the Code would fail merely because there is another higher offer made by a third party, the CoC cannot consider another Plan of a third party who did not participate in the CIRP Proceedings. It concluded that once Plan is submitted for approval, it is binding between the CoC and the SRA, unless there is any material irregularity or is against the provisions of Section 30(2) of the Code the Adjudicating Authority cannot, in its limited jurisdiction, interfere.

Whether CoC after having approved a Resolution Plan can seek direction to consider a new Resolution Plan of a third party who was not a part of the CIRP Proceedings, and seek to withdraw their approval after more than 2 years of the approval of the first Resolution Plan – Kalinga Allied Industries India Pvt. Ltd. Vs. CoC (Bindals Sponnge Industries Ltd.) – NCLAT New Delhi Read Post »

The words ‘other resolution plans’ nowhere in any manner import the words either ‘fresh resolution plans’ or ‘earlier resolution plans’ – M/s Shreeji Cotfab Ltd. Vs. Jalesh Kumar Grover RP, GPI Textiles Ltd. – NCLT Chandigarh Bench

/ 1 minute of reading

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The words ‘other resolution plans’ nowhere in any manner import the words either ‘fresh resolution plans’ or ‘earlier resolution plans’ – M/s Shreeji Cotfab Ltd. Vs. Jalesh Kumar Grover RP, GPI Textiles Ltd. – NCLT Chandigarh Bench Read Post »

NCLT allows the Resolution Applicant being promoters of MSE Corporate Debtor to deposit EMD at Resolution Approval stage – Mr. Rajesh Kumar Damani Vs. Mr. Jitendra Lohia & Ors. – NCLT Kolkata Bench

/ 4 minutes of reading

The applicant has stated in the application that the resolution plan submitted by the applicant is far better and more conducive to the revival and rehabilitation of the Corporate Debtor and is also valued at Rs.15 Crores as compare to other two plans which are Rs.10.51 Crores and Rs. 9.0 Crores respectively. We also note the submissions of the applicant that even though the CoC did not consider the EMD exemption available to the MSME, however considering the various exemptions and relaxations given to the MSME including the exemption provided in Section 240A of the code to MSME sector and relying on the ratio of the Swiss Ribbons, we are inclined to grant the relief sought as set out herein.

NCLT allows the Resolution Applicant being promoters of MSE Corporate Debtor to deposit EMD at Resolution Approval stage – Mr. Rajesh Kumar Damani Vs. Mr. Jitendra Lohia & Ors. – NCLT Kolkata Bench Read Post »

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