M/s. Aswathi Agencies vs Bijoy Prabhakaran Pulipra & ors
Company Appeal (AT) (CH) (Ins.) No. 179 of 2021
Facts:
1.CIRP was initiated against PVS Memorial Hospital Private Limited (Corporate debtor) and Mr.Bijoy was appointed as the Resolution Professional. Resolution plan submitted by Lissie’, Medication Institution was approved by the NCLT vide order dated 16.03.2021.
2.Appellant is challenging the order of the NCLT approving the resolution plan.
Issue: Whether the order passed by NCLT approving the plan was in violation of section 30 and section 31 of the Code?
Arguments:
For appellants:
1.Counsel for the Appellant contends that the Resolution Professional’, has committed a mistake in not taking into account the Exact Value’ of the Land’ and Properties’ of the Corporate Debtor’. Moreover, the1 st Respondent / Resolution Professional’, had purposefully, not disclosed the Valuation of the Item wise Land Property’, Hospital Equipments’ and Machineries’ and the Hospital Facilities’ Viz. the number of Operation Theatres, Intensive Care Units, Surgical Wards, etc., held by the Corporate Debtor.
2.It was submitted that Appellant’, had paid more than Rs.12 Lakhs towards the GST’, for the supply of the Medicines to the Corporate Debtor, wherein, no payment was made by them. Besides this, no provisions were made in the Plan’, at least to return the GST sum, paid by the Appellant’, in respect of the Sale of Medicine’ to the `Corporate Debtor’.
3. It also submitted that Creditors were completely in dark about the proceedings of the 1 st Respondent Resolution Professional’ and the .Committee of Creditors’. Further, the Appellant’ was not provided with opportunity or any of the Workmen to present their views or claims’, while determining the admitted Claim’, which is an Irrational’, Unjust’ and Breach of Natural Justice.
4.Appellant puts forward a plea that the Resolution Applicant’ /Lissie Medical Institution’, is a Charitable Public Trust’, created by a registered Deed’, under the Indian Trust Act, and in short, a Resolution Applicant’, cannot be a `Charitable Public Trust’. It is submitted that Resolution Plan’, furnished by the Resolution Applicant’, is a Business Deal’, wherein the Resolution Applicant’, is acquiring the Corporate Debtor’ and intends to do a Profitable Business’ with the Corporate Debtor. Hence, the consideration paid for the purpose, can never be construed as Amounts spend for Charitable Purpose’.
5.act of acquiring the Corporate Debtor, in terms of the Resolution Plan’, cannot be placed under any of the aforesaid parameters of the Charitable purpose’ and further that the Resolution Applicant’, had not set forth any Charitable Activity / Deed’, which will be undertaken, as part of the Resolution Plan’.
6.It was submitted that Operational Creditors’, are paid Rs. 1 Crore, while Rs.125 Crores is paid as consideration’ to the Financial Creditors’. The ratio behind the Operational Creditors’, not being given the power to exercise their wisdom’, in the Approval of the Resolution Plan’, is to curtail the decision making process’ of the Resolution Plan’. That cannot be taken advantage of, by the Financial Creditors’, and the conduct of the Financial Creditor’ and the Resolution Applicant’ is an abuse of process’ and therefore, the Resolution Plan’ is to be `Rejected’, at the very inception, itself
For Respondents:
1.It was submitted that plan provides for the distribution schedule of the Resolution Plan’ proceeds of Rs.126 Crores, as approved by the Committee of Creditors’, wherein Serial No.4, clearly provides for the payment of the Debts’ of the Operational Creditors, other than the related Parties of the Corporate Debtor’ and contends that because of the Resolution Plan’, approved by the Adjudicating Authority’, refers to specific provision, for the payment of debts of the Operational Creditors’, the contra stance of the Appellant’, isdevoid of merits’.
2.It is submitted that Valuation was made by the two Independent Registered Valuers’, registered with the IBBI, under the Companies (Registered Valuers and Valuation) Rules, 2017, and the Fair Value’ and the Liquidation Value’ of the Corporate Debtor’, was computed, in accordance with internationally Accepted Valuation Standards’, after physical verification of the Inventory’ and the Fixed Assets’ of theCorporate Debtor’
3.It was further submitted that object behind prescribing the Valuation’ of the Corporate Debtor’, is to assist the Committee of Creditors’, to take an effective decision on the Resolution Plan’ and there was no Statutory Mandate that the Bid of the Resolution Applicant’, is to match with the Fair Value’, and Liquidation Value’ of the Corporate Debtor. Also it is not open to the Adjudicating Authority’, or an Appellate Authority’, to reckon any other factor, other than mentioned in Section 30 (2) or Section 61 (3) of the I & B Code, 2016.
4.Further there is no restriction for a Trust’, registered under theIndian Trust Act’, to submit a Resolution Plan’, during theCorporate Insolvency Resolution Process’, and the Successful Resolution Applicant’, is a Registered Charitable Trust’, registered under the Indian Trust Act’ and qualified to act as aResolution Applicant’, pursuant to Section 5 (25) of the I & B Code, 2016
Decision: Order passed was in accordance with section 30 & 31 of the Code.
Rationale:
1.NCLAT noted that scope of Judicial Review’, by an Adjudicating Authority’, revolves around a `restricted and narrow field’. Resolution Plan’, given by the Resolution Applicant’, had satisfied the requirements, mentioned in the I & B Code, and the Regulations, thereunder and a Compliance Certificate’, was filed by the 1st Respondent / Resolution Professional’ in this regard, before the Adjudicating Authority’ (National Company Law Tribunal’), in terms of the Regulation 39 (4) of the Corporate Insolvency Resolution Process Regulations
2.Person’, is defined as per Section 3(23) (d) of the I & B Code, 2016, which includes a Trust’, therefore, there is no Fetter’ / Embargo’ or aLegal Impediment’, for a Trust’, to be a Resolution Applicant’, in submitting a Resolution Plan’ (in the present case), the candid fact, is that the Successful Resolution Applicant’ / Lessie Medical Institutions’, being a Registered Charitable trust’, under the Indian Trust Act, 1882’), in Corporate Insolvency Resolution Process’, in the cocksure earnest opinion of this `Tribunal.
3.It also noted that the words, any person Aggrieved’, occurring in Section 61 (1) of the I & B Code, 2016, is of the view that in Section 61 (1) of the Code, the words Party Aggrieved’, are not employed. For an affected person, the Order’ of an Adjudicating Authority’, must cause a `Legal Grievance’, by wrongfully depriving him of something and in the process, his `Legal Right’ is breached, by the act complained of.
Order Copy:
