(2023) ibclaw.in 1058 NCLT
IN THE NATIONAL COMPANY LAW TRIBUNAL
Hyderabad Bench
PFC Projects Ltd. and Ors.
v.
V. Venkatachalam, RP and Ors.
I.A. No. 1607 of 2023 in CP (IB) No. 813/7/HDB/2019
Decided on 22-Dec-23
Coram: Coram: Shri Rajeev Bhardwaj (Judicial Member) and Shri Sanjay Puri (Technical Member)
Add. Info:
Corporate Debtor: KSK Water Infrastructures Pvt. Ltd.
For Appellant(s): Mr. Avinash Desai, Sr. Adv, along with Mr. Amir Bavani
For Respondent(s): Mr. Y. Suryanarayana and Mr. Mayur Mundra
Brief about the decision:
In their submissions, the Respondents have stressed on the supremacy of the ‘Commercial Wisdom’ of the CoC to justify their decision. However, it is for this Authority to ensure that the topical expediency or arbitrariness does not replace the commercial wisdom. As the final decision in the pending litigation lies with the Hon’ble Supreme Court, disqualifying the Applicant on the grounds that their stakes are also involved in that litigation, is arbitrary and not commercial wisdom. The topical expediency seems to be coming in the way of maximization of value.
We cannot overlook the fact that it was upon the insistence of the CoC and RP in this case, that the bidding process for the CD was reopened to consider EoI of these very Applicants “to maximise the value” of the CD. It is noteworthy that the CoC/RP, who are now disqualifying the Applicants, were fully aware of the circumstances when they argued and pursued IA No. 522/2022.
The Tribunal’s order in that IA, dated 05.06.2023, had explicitly acknowledged6 the existing disputes between the corporate debtor of KMPCL and the ongoing civil appeal before the Hon’ble Supreme Court, pending adjudication.
Respondents cannot take a stand now that because IA 522/2022 was filed before the Appeal of CoC of KMPCL was filed, they were unaware of the circumstances of Applicant No.1 & 2 concerning the appeal before Hon’ble Supreme Court. They had argued and pursued reopening
of the bidding process to include the Applicants, despite being aware of the pending litigation in the Supreme Court. Their present stance is inexplicable.
In light of these facts, we are inclined to allow the present application with the direction that the EoI of the Applicants be considered on merit and a reasonable time allowed for submission of a viable resolution plan.
This application is therefore allowed with the foregoing remarks.
Judgment/Order:
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