National Company Law Appellate Tribunal (NCLAT): Coram of Bansi Lal Bhatt, J. (Acting Chairperson), Anant Bijay Singh, J. (Judicial Member), Dr Ashok Kumar Mishra (Technical Member) while dismissing an appeal imposed costs to the tune of Rs.1 Lakh on the Appellant on finding it to be yet another effort to wriggle out of its obligations and seek withdrawal of Resolution Plan in a different garb.
In the relevant matter Union Bank of India filed an Application under Section 7 of Insolvency and Bankruptcy Code, 2016 (I&B Code) before Adjudicating Authority for initiating the Corporate Insolvency Resolution Process ( ‘CIRP’) against the Corporate Debtor – Amtek Auto Limited (‘CD’ or ‘AAL’) and subsequently CIRP commenced. Respondent No.1 came to be appointed as Interim Resolution Professional (IRP). The appellant urged that the Adjudicating Authority while approving the Resolution Plan cannot re-write the same nor can it waive any condition of the Resolution Plan, that too without the express consent of the Appellant. And the burden has been placed on the Appellant to invest huge sums to furnish the balance Performance Bank Guarantee (PBG) of Rs 150 crores. And that there were certain preconditions that were not adhered to. The appellant contended that the execution of the long term lease was a condition precedent and the integral part of the Resolution Plan and the business of the Corporate Debtor as a going concern is dependent on the availability of this leased land as admitted by Respondents 1 and 2
Respondent vehemently denied it on the ground that the Committee of creditors and the Appellant had mutually agreed for inclusion of execution of long term lease as a condition precedent to the implementation of the approved Resolution Plan after due consideration to the land. However, it was submitted that this condition was not a condition precedent to the approval and acceptance of the Resolution Plan. Further contended that the objections raised were with ulterior objective to wriggle out from an otherwise binding Resolution Plan. Further, the Resolution Plan clearly provided that the implementation of Resolution Plan shall commence from the date of approval by AA and Letter of Intent was not a condition precedent to file the Application for approval of the Resolution Plan and was subject to directions of Supreme Court.
The Tribunal after going through the oral and written submissions, declined to accept impleadment and intervention sought by Vistra and Kotak Mahindra respectively. It was of the opinion that, “The tone and tenor of this order leaves no scope for the Appellant to resile from and wriggle out of the implication of the offer made by him, i.e. the Resolution Plan, which has been approved in terms of the order impugned in this Appeal. It is therefore manifest that the Appellant would not be permitted to backtrack and seek exit from its Resolution Plan on any pretext whatsoever…”. Further held, “…It would therefore emerge that the said condition of including execution of long term lease of 20 years with respect to Ace Complex Land on Acceptable Terms was a condition precedent to the implementation of the approved Resolution Plan and not to the approval of the Resolution Plan. “…The Respondents have been able to demonstrate that the Appellant has breached the Resolution Plan by not submitting PBG in respect of balance amount of Rs.150 crore prior to submission of Resolution Plan before the Adjudicating Authority…”.
Therefore, the Coram dismissed the appeal imposing costs of Rs 1 Lakh on the Appellant on finding it to be frivolous and devoid of merit.[Deccan Value Investors L.P, In re, 2021 SCC OnLine NCLAT 143, decided on 16-04-2021]
Advocates for Appellant
Vikram Nankani, Sr. Advocate with Dinesh Pednekar, Chanakya Keswani, Kumar Anurag Singh, Anando Mukherjee and Arpan Behl.
Advocates for Respondent
Sumant Batra, Sanjay Bhatt and Niharika Sharma, Advocates for R-1 (RP).
Tushar Mehta, SGI, Abhinav Vasisht, Sr. Advocate with Misha, Anoop Rawat, Siddhant Kant, Charu Bansal and Prabh Simran Kaur, Advocates for R2 (CoC).
Sumesh Dhawan, Advocate for R-4.
Sudhir K Makkar, Sr. Advocate with Anindita Roychowdhury, Vatsala Rai, Saumya Gupta, Bharat Makkar and Yogita Rathore, Advocates for Vistra ITCL (India) Ltd.
Arun Kathpalia, Sr. Advocate with Kaushik Moitra, Shreya Sircar, Ishita Jain, Anurag Tandon, Sanjukta Roy, Advocates for Kotak Mahindra Bank (Intervenor).