Appeal by unsuccessful resolution applicant against RP approved by CoC with 100% voting was to be rejected

Case Details: PNC Infratech Ltd. v. Deepak Maini - [2022] 145 taxmann.com 12 (NCLAT-New Delhi)

Judiciary and Counsel Details

• • Rakesh Kumar Jain, Judicial Member, Kanthi Narahari & Dr Alok Srivastava, Technical Member
  • Abhijeet Sinha, Abhishek Garg, Yash Gaiha & Aayush Kuchhal, Advs. for the Appellant.
  • Abhishek Anand, Sahil Bhatia, Kunal Tandon, Ms Richa Sandilya, Sandeep Bajaj, Ms Aakansha Nehra & Ms Sakshi Digvijay, Advs. for the Respondent.

Facts of the Case

In the instant case, the Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP), the resolution professional (RP) made a public announcement. Later, in 9th Committee of Creditors (CoC) meeting, as per the evaluation matrix approved by the CoC, a resolution plan was considered and placed for the voting and the plan was approved by CoC with 100 per cent voting. After CoC, Resolution plan was approved by NCLT also.

Further, the appellant vide letter responded to the RP’s e-mail, expressing its grievance regarding the belated communication from the RP about the CoC decision approving the resolution plan. Later, In the 10th CoC meeting, the letter of the appellant was put for discussion, and the RP vide e-mail informed the appellant that the CoC stood by its decision and never intended to have a revised bid process.

On appeal, the appellant challenged the CoC’s decision declaring highest bidder and approving its plan. The appellant further submitted that the NCLT failed to recognise the material irregularities on ground that it enhanced its bid amount and submitted its revised plan.

NCLAT Held

On appeal, Hon’ble NCLAT held that neither NCLT nor NCLAT could substitute its views with commercial wisdom of CoC and also could not deal with technical complexity and merits of resolution plan unless it was found to be contrary to express provision of law and against public interest. Since, there was no contravention in approving resolution plan either by CoC or by NCLT, plan approved was in accordance with law.

List of Cases Reviewed

• • Order of NCLT (New Delhi) in CA No. 1569(PB)/2019 in CP(IB)-1126(PB)/2018, dated- 2-1-2020 (Para 39) affirmed.

List of Cases Referred to

• • Padmanabhan Venkatesh v. V. Venkatachalam [2019] 105 taxmann.com 234/153 SCL 530 (NCLAT – New Delhi) (para 8)
  • Rajputana Properties (P.) Ltd. v. Ultra Tech Cement Ltd. [2019] 108 taxmann.com 88 (NCLAT – New Delhi) (para 9)
  • Maharashtra Seamless Ltd. v. Padmanabhan Venkatesh [2020] 113 taxmann.com 421/158 SCL 567 (SC) (para 15)
  • K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com 139/152 SCL 312 (SC) (para 15)
  • IMR Metallurgical Resources AG v. Ferro Alloys Corporation Ltd. [2020] 118 taxmann.com 544 (NCLAT – New Delhi) (para 20)
  • Darshak Enterprise (P.) Ltd. v. Chhaparia Industries (P.) Ltd. [2018] 96 taxmann.com 24 (NCLAT – New Delhi) (para 35).