Whether an ‘Unsuccessful Resolution Applicant’ whose Resolution Plan gets rejected by CoC has locus to question implementation of approved Resolution Plan? NCLAT thoroughly determines

National Company Law Appellate Tribunal (NCLAT): The Bench of Justice Bansi Lal Bhat (Acting Chairperson) and Justice Anant Bijay Singh (Judicial Member), Dr Ashok Kumar Mishra (Technical Member), in the present appeal observed,

“Once the Appellant is out of the fray, it has neither locus to call in question any action of any of the stakeholders qua implementation of the approved Resolution Plan nor can it claim any prejudice on the pretext that any of the actions post-approval of the Resolution Plan of Successful Resolution Applicant in regard to its implementation has affected its prospects of being a Successful Resolution Applicant.”

In the instant appeal, the appellant is the ‘Unsuccessful Resolution Applicant’ whose Resolution Plan was rejected by the Committee of Creditors.

Impugned Order passed by the Adjudicating Authority was assailed by virtue whereof the Adjudicating Authority while declining to accede to the prayer for reversal of money to the Successful Resolution Applicant in the event of dismissal of order from Supreme Court, directed the implementation of the approved Resolution Plan.

The above-stated impugned order was assailed on the ground that the erstwhile Committee of Creditors, in connivance with the Successful Resolution Applicant, accepted a re-negotiated fresh Resolution Plan and the application of the Committee of Creditors under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 was not maintainable and shouldn’t have been entertained by the Adjudicating Authority.

Further, On 04-02-2020 Adjudicating Authority had approved the Resolution Plant and in terms of the said plan the Successful Resolution Applicant had to bring in Rs 123 Crores for Resolution within 30 days, however, the Successful Resolution Applicant did not implement the Resolution Plan and the erstwhile Committee of Creditors of the Corporate Debtor, in connivance with the Successful Resolution Applicant, accepted a fresh resolution plan to the detriment of legal rights of the Appellant whose Resolution Plan was rejected on the ground that he could not provide for lump-sum time-bound payment within 30 days of the approval of its Resolution Plan.

Decision

In view of the above-stated Bench opined that the appellant had no locus to question the implementation of the approved Resolution Plan of the Successful Resolution Applicant.

Tribunal observed that,

If the terms of the approved Resolution Plan of Successful Resolution Applicant have been varied or time extended to facilitate its implementation and the creditors have not claimed any prejudice on that count and the Committee of Creditors comprising of the creditors as stakeholders has not objected to same rather been privy to it on account of hardship due to prevailing circumstances, the Appellant cannot be permitted to cry foul.

Hence, it was held that the appellant had no locus to maintain that the change in terms of the approved Resolution Plan in regard to the extension of time for induction of upfront amount as also the implementation of the Resolution Plan jeopardized its legal rights qua consideration of its Resolution Plan which had been rejected.

On finding no merit in the present appeal, it was dismissed. [ Hindustan Oil Exploration Company v. Erstwhile Committee of Creditors JEKPL (P) Ltd., Company Appeal (AT) (Insolvency) No. 969 of 2020, decided on 17-11-2020]

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