COMMITTEE OF CREDITORS

Whether Committee of Creditors consider a new Resolution Plan of a party, who was not a part of the CIRP, after approval of Resolution Plan by Adjudicating Authority

- Surendra Rahalkar

BIDDERS

Facts of the case:

Kalinga Allied Industries India Private Limited (Hereinafter referred to as "Appellant" or Successful Resolution Applicant (SRA) have preferred appeal against order of Hon'ble National Company Law Tribunal (NCLT), New Delhi, Principal Bench in IA No.999(PB)/2021 in IB-60(PB)/2018 allowing application by Committee of Creditors(CoC) to call meeting of CoC and consider Resolution Plan proposed by Party who was not part of CIRP Proceedings and seeking additional time to consider and approve a more suitable plan after already approved plan of SRA by CoC. SRA earlier has placed resolution plan at lower amount on 25th June 2019, later on SRA submitted revised offer with increased amount as per order dated 22nd October 2019 and the same was approved by CoC at their meeting on 11th November 2019 and said plan was submitted to the Adjudicating authority which was approved as well.

Observation of Hon'ble NCLT while allowing application of CoC

"CoC is well within its powers to reject a plan, improve a plan and also withdraw a plan in their commercial wisdom and hence the decision on the part of the financial creditors to reconstitute the CoC and to construe better plans, is well within their powers and the same cannot be denied."

"Objective of Insolvency & Bankruptcy Code is to maximize the value, however the same should be in time bound manner"

Grounds of Appeal to Hon'ble NCLAT:

1. Adjudicating Authority cannot entertain an application of a person who has not participated in the Corporate Insolvency Resolution Process (CIRP) even when such a person is ready to pay more amount in comparison to the SRA and therefore no new Application can be entertained if a person has not participated in the CIRP.