Simbhaoli Sugars Ltd. vs Pramod Kumar Sharma Resolution Professional of Uniworld Sugars Pvt. Ltd. & Ors.
Company Appeal (AT) (Insolvency) No.776 of 2023
Facts:
1.CIRP was initiated against the Corporate Debtor. Plan was submitted by the Resolution Applicant which was approved by the COC and subsequently by the NCLT vide order dated 17.03.2021.
2.Challenging the said order the present Appellant as well as one Operational Creditor have filed Appeals in this Tribunal being Company Appeal (AT) (Ins.) No. 741 of 2021 and 422 of 2021 where NCLAT observed that third valuation report which was obtained was uncalled for and the liquidation value of the Corporate Debtor ought to have been taken on the average of two valuation report which were earlier obtained.
3.NCLAT also directed that it would serve the interests of the creditors and stakeholders in a fair and just manner if the SRA revises the payments to be given to stakeholders and creditors resolution plan in the light of the liquidation value of Rs. 123.66 crores and puts it up to the CoC for consideration and necessary approvals and set aside the Plan.
4.Resolution Applicant revised the payments to the different stakeholders and same was placed before the Committee of Creditors. The Committee of Creditors approved the revised payments in its meeting dated 11.05.2022. The revised payments were approved by the Committee of Creditor with 100% vote share. The Resolution Professional filed an application for approval of the plan before the Adjudicating Authority, on which application the order impugned dated 20.03.2023 has been passed by the Adjudicating Authority approving the Resolution Plan.
5.Appellant has filed the appeal challenging the approval of Plan.
Arguments:
For Appellants:
1.Counsel submitted that approval of the Resolution Plan is not in accordance with law. He submits that the payments to the Operational Creditors have decreased in the revised payments proposal. He further submits that Regulation 29 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 has not been followed.
2.He also submitted that object of the I&B Code is maximisation and when the average liquidation value to be taken was Rs.123.66 Crores, the increase of only Rs.3 Crores in the plan value cannot be said to be in accordance with law and cannot be said to be in line of the order passed by this Appellate Tribunal.
For Respondent:
1.Counsel contends that the only limited scope which was left by the order dated 12.04.2022 was redistribution of the payments by taking liquidation value of Rs.123.66 Crores and following the said liquidation value, the plan value which was earlier Rs.53 Crores was enhanced to Rs.56 Crores. He further submits that the Rs.56 Crores was the payment which was envisaged under the plan whereas the total fund which is required to put by Successful Resolution Applicant runs to Rs.173 Crores
2.It is submitted that the Appellant who is a Shareholder and Promoter has been creating obstructions in successful resolution of insolvency of the Corporate Debtor.
Decision: NCLAT dismissed the appeal and uphold the order of NCLT.
Rationale:
1.NCLAT noted that direction of Tribunal dated 12.04.2022, as extracted above, indicate that the Resolution Plan was set aside only to the extent it relates to allocation of payment to stakeholders and creditors and directed that revision of payments and subsequent approval of the revised resolution plan was to be completed within a period of two month.
2.It is now well settled that distribution to the creditors in accordance with provisions of Section 30(2) is in the discretion of the Committee of Creditors and with regard to distribution the scope of judicial review by the Adjudicating Authority and this Tribunal is very little.
3.It held that present is a case where the Corporate Debtor is not being liquidated rather resolution plan has been approved as per the Insolvency and Bankruptcy Board of India. (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. We are of the view that there is no applicability of Regulation 29 while approving the resolution plan.
Order Copy:
