National Company Law Appellate Tribunal, New Delhi: In an appeal challenging the order of Adjudicating Authority which allowed the Committee of Creditors (CoCs) to consider the Resolution Plan of the applicant subject to certain conditions, a 3-member bench comprising of Ashok Bhushan, J., Mr. Barun Mitra, (Technical Member) and Arun Baroka (Technical Member), held that that Resolution Plans from applicants which are not included in the list of Prospective Resolution Applicants (PRAs) cannot be considered by the CoCs.
“When no fresh Form G has been issued, it is not open for any new applicant to submit application before the Adjudicating Authority for being permitted to participate in the CIRP and submit Resolution Plan.”
The instant matter involves two appeals filed by appellant, Ashdan Properties (P) Ltd., challenging the orders passed by the Adjudicating Authority. The Adjudicating Authority directed the CoC to consider the Resolution Plan of the Applicant subject to allowing a fresh opportunity for all Resolution Applicants to revise their bids. Another order directed the Resolution Professional to present the Plans of B-Right Real Estate Ltd. and MGN Agro Properties (P) Ltd. to the CoC for consideration, with a strict deadline set for further submissions. The appellant, having undergone 33 rounds of bidding and declared H1, objected to the consideration of new applicants whose names were not in the list of PRAs. The CoC, via affidavit, conveyed its decision to only negotiate with the existing Resolution Applicants listed as PRAs. The core issue revolved around the consideration of Resolution Plans by the CoC from entities whose names were not included in the final list of PRAs.
The appellant contended that the application was filed by Patanjali Ayurveda Ltd. and two other applicants who were not included in the list of PRAs. The appellant argued that since these applicants were not included in the list of PRAs, there was no reason to issue a direction to the CoC to consider their application or Resolution Plan. However, the respondent argued that the CoC had accepted the application submitted by Patanjali Ayurveda Ltd., so they should also consider the applications of the other intervenors/applicants.
The NCLAT noted that Regulation 39(1)(b) of CIRP Regulations, 2016 prohibited the consideration of a Resolution Plan from an entity not listed as a PRA and Regulation 36A permitted the CoC to modify the Invitation for Expression of Interest and decide not to proceed with new applications. The NCLAT observed that as per Regulation 39(1)(b) of CIRP Regulations, the committee shall not consider a resolution plan received from an application whose name does not appear in the list of PRAs. It was further observed that without a fresh Form G being issued it is not open for any new applicant to submit application before the Adjudicating Authority for being permitted to participate in the CIRP and submit Resolution Plan. Furthermore, the CoC has filed an affidavit stating that they have decided not to consider any additional new entrants and will confine their consideration to Resolution Applicants whose names were there in the final list of PRAs dated 07-11-2023.
The NCLAT allowed the appeals and set aside the orders dated 12-02-2024 and 21-02-2024 and held that Resolution Plans from applicants not included in the list of PRAs cannot be considered by the CoCs.
[Ashdan Properties (P) Ltd. v. Mamta Binani, 2024 SCC OnLine NCLAT 386, order dated 18-03-2024]
Advocates who appeared in this case :
Mr. Ramji Srinivasan, Sr. Advocate with Ms. Sonam Mhatre, Mr. Akash Kakade, Mr. Darshil Thakkar, Mr. Somnath Padhan, Ms. Namrata Saraogi, Mr. Swetab Kumar, Mr. Kartik Pandey, Mr. Pawan Kaushik, Counsel for the Appellant
Mr. Sandeep Bajaj, Ms. Aakanksha Nehra, Ms. Gunjan Nauyar, Counsel for the Respondent No. 1
Mr. Gautam Singh, Mr. Aditya Vaibhav Singh, Counsel for the Respondent No. 3
Mr. Gaurav Mitra with Ms. Neha Bhosle, Ms. Laveena Tejwani, Sr. Advocate, Counsel for the Respondent No. CoC
Mr. Sameer Pandit, Ms. Sarreh Khambati, Mr. Aman Raj Gandhi, Ms. Saloni Kumar, Mr. Devanshu Behl, Counsel for the Respondents
