Resolution plan approved by CoC with 100% voting, etc. was rightly approved by NCLT

Case Details: Indian Potash Ltd. v. Naresh Kumar Verma - [2022] 139 taxmann.com 239 (NCLAT-New Delhi)

Judiciary and Counsel Details

• • Justice Ashok Bhushan, Chairperson, Jarat Kumar Jain, Judicial Member & Dr Alok Srivastava, Technical Member
  • Manish Kaushik & Ajit Joher, Advs. for the Appellant.
  • Amol Vyas, Saumil Sharma, Ankur Mittal, Ms Meera Murali, Maharshi Viswaraj & CA Swami Venugopal, Advs. for the Respondent.

Facts of the Case

n the instant case, the CIRP was initiated against the corporate debtor. The corporate Debtor invited the resolution plan by issuing a publication in form-G. After the publication of the form- a Resolution Plan was submitted by the appellant. Later on, a resolution was passed authorizing Resolution Professional to publish a fresh Form-G, inviting Expression of Interest to submit Resolution Plan for the Corporate Debtor.

The consortium of six individuals submitted another resolution plan. After various deliberations, the Committee of Creditors (CoC) decided to approve the Resolution Plan submitted by the consortium of six individuals, i.e. Respondent No. 3, and declared the same as approved with 100% voting, and Resolution Plan submitted by the appellant was rejected with 100% voting. Hence, an application was filed before the Adjudicating Authority (NCLT) for approval of the Resolution Plan.

The Adjudicating Authority by the impugned order dated 13-10-2021 had approved the Resolution Plan of Respondent No. 3. The appellant filed an appeal against the impugned order of the Adjudicating Authority approving the resolution plan submitted by Respondent No. 3.

The appellant contended that under the evaluation matrix, the higher upfront payment was to be preferred and the appellant had offered a higher upfront payment was to be given the opportunity. The appellant further submitted that the approved Resolution Plan was not as per the evaluation matrix. Also, the Appellant’s Plan had a higher value and no opportunity was given to the Appellant to enhance the value of its Plan.

The Corporate Debtor contended that CoC with 100% vote has approved the Resolution Plan of Respondent No. 3 and the Resolution Plan of the Appellant was rejected with 100% vote. It was submitted that the evaluation matrix has been duly followed by the CoC while approving the Resolution Plan of Respondent No. 3. The Successful Resolution Applicant had scored higher on the evaluation matrix, hence the argument of the Appellant is without any basis. Further, the multiple opportunities were granted to the Appellant to revise its Plan.

NCLAT Held

The Appellate Authority held that the Resolution Plan approved by the Committee of Creditors was as per provisions of section 30(2)(a) to 30(2)(e) and also complied with the provisions of regulations 38 and 39 of the IBC. The Resolution Plan dated 9-9-2020 along with all addendums dated 19-9-2020 as approved by the CoC, was rightly approved by the Adjudicating Authority by the impugned judgment. Accordingly, the appeal was to be dismissed.

List of Cases Reviewed

• • Order of NCLT-Jaipur in I.A. No. 310/JPR/2020 & I.A. No. 357/JPR/2020 in CP (IB) No. 157/7/JPR/2019, dated 13-10-2021(para 17) affirmed.

List of Cases Referred to

• • K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com 139/152 SCL 312 (SC) (para 14)
  • Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [2019] 111 taxmann.com 234 (SC) (para 15).