Expression of Interest by an appellant couldn’t be considered when the resolution plan was already approved by CoC

Case Details: Amanat Randhawa Hotels (P.) Ltd. v. Shashi Kant Nemani (Resolution Professional of Aryavir Buildcon (P.) Ltd.) - [2021] 133 taxmann.com 153 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Anant Bijay Singh, Judiciary Member and Ms. Shreesha Merla, Technical Member
  • Dhruba Mukherjee, Sr. Adv., Pulkit Deora, Ms. Navya Khillon, Kumar Anurag Singh and Zain A. Khan, Advs. for the Appellant. Kanishk Khetan, Sr. Adv., Alok Dhir, Ms. Varsha Banerjee, Ms. Shashi Kant Nemani, Nitin Dahiya, Ms.Eshna Kumar, Aditya Maheshwari, Shailendra Singh, Ms. Muskaan Garg, Ms. Prerna Robin and Dhruv Goel, Advs. for the Respondent.

Facts of the Case

In the instant case, the Resolution Professional invited Expression of Interest (EoI) on commencement of corporate insolvency resolution process (CIRP). The last date of submission of EoI was 6-3-2021. The appellant sent an e-mail expressing interest in participating in the CIRP on 13-6-2021, but the Resolution Professional did not accept it. The Adjudicating Officer rejected the appellant’s application seeking directions to consider EoI on the ground that Resolution Plan was already approved. The Resolution Professional preferred an application under section 30(6) seeking approval of the Resolution Plan submitted by one ‘S’.

The Adjudicating Officer vide impugned order observed that while considering the instant application, the unsuccessful Resolution applicant whose interim application was dismissed on 8-7-2021 had appeared before the Tribunal and submitted that it had preferred an appeal against the orders of the NCLT in the matter and the said matter was now posted to 23-9-2021 and prayed for deferring the finalisation of the application filed by RP. The Tribunal directed the appellant to pay Rs. 10 crores to the corporate debtor and posted matter to 28-9-2021.

NCLAT Held

On appeal, the appellant contended that the impugned order passed by the Adjudicating Authority dismissing its application on the ground that the Resolution Plan was already approved, was erroneous and that the Adjudicating Authority ought not to have imposed any conditions while allowing it to file its claim before CoC and that the directions in the impugned order were akin to ‘penalising’ the appellant.

Dismissing the appeal, the Appellate Tribunal held that since resolution plan was accepted by 100 per cent voting share in CoC meeting, and appellant had never participated in EoI, any reliefs granted in contra to timelines would be ultra vires to scope and objective of Code.

Case Review

• • Tourism Finance Corporation of India Ltd. v. Arvavir Buildcon (P.) Ltd. [2021] 133 taxmann.com 152 (NCLT – New Delhi) (para 20) affirmed [See Annex].
  • Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [2019] 111 taxmann.com 234 (SC);
  • Ghanshyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Company Ltd.[Civil Appeal No. 8129 of 2019];
  • Chhattisgarh Distilleries Ltd. v. Dushyant Dave [Company Appeal (AT) (Insolvency) No. 461 of 2019] and
  • Ebix Singapore (P.) Ltd. v. Committee of Creditors of Educomp Solutions Ltd. [2021] 130 taxmann.com 208 (SC) (para 19) followed.

List of Cases Referred to

• • Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [2019] 111 taxmann.com 234 (SC);
  • Ghanshyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Company Ltd.[Civil Appeal No. 8129 of 2019];
  • Chhattisgarh Distilleries Ltd. v. Dushyant Dave [Company Appeal (AT) (Insolvency) No. 461 of 2019] and
  • Ebix Singapore (P.) Ltd. v. Committee of Creditors of Educomp Solutions Ltd. [2021] 130 taxmann.com 208 (SC) (para 19) followed.