NCLAT Upholds NCLT’s Order to Return Resolution Plan to CoC as Appellant-SRA Agreed to Reconsider the Matter

Case Details: Noble Marine Metals Co WLL v. Kotak Mahindra Bank Ltd. - [2024] 163 taxmann.com 727 (NCLAT-New Delhi)

Judiciary and Counsel Details

• Ashok Bhushan, Chairperson & Shreesha Merla, Technical Member
• Avinash Bhati, Aditya Pandey, Prasook Jain & Ms Kshirja Agarwal, Advs. for the Appellant.
• Arvind Nayar, Sr. Adv., Amit Mahaliyan, Akshay Joshi, Bishwajit Dubey, Ms Srideepa Bhattacharya, Ms Aishwarya Gupta & Ms Shubhangi Agarwal, Advs. for the Respondent.

Facts of the Case

In the instant case, the Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor. The appellant submitted a resolution plan, which was approved by the CoC. Meanwhile, financial creditors filed an application before the NCLT seeking to delete a clause in the resolution plan that provided for the release of promoters’ personal guarantees.

The NCLT, vide the impugned order, remitted the resolution plan back to the CoC for reconsideration. The appellant appealed before the NCLAT on the ground that since the NCLT had approved the resolution plan, it had no jurisdiction to send it back for reconsideration at the request of a financial creditor.

It was noted that the resolution applicant appeared before the NCLT and submitted that the Committee of Creditors (CoC) could reconsider the plan as per the wisdom of CoC members.

NCLAT Held

The NCLAT held that since the resolution applicant itself consented before the NCLT that the matter be sent back to the CoC for consideration, he could not have challenged the impugned order.

Further, the NCLAT held that the CoC, as per the impugned order, was to make a decision, and RP was to submit a modified resolution plan, if any, before the NCLT. Therefore, the impugned order passed by the NCLT was justified.

List of Cases Reviewed

• • Udayraj Patwardhan v. Laxmi Vilash Bank [2024] 163 taxmann.com 726 (NCLT – New Delhi) [para 15] affirmed [See Annex]