Back
SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, M.R. SHAH, JJ.
Pratap Technocrats (P) Ltd. and Others – Appellants
Versus
Monitoring Committee of Reliance Infratel Limited and Another – Respondents
Civil Appeal No. 676 of 2021
Decided On : 10-08-2021
Insolvency and Bankruptcy Code, 2016 – Sections 62, 30, 510(a), 30(2)(e), 61(3), 31, 29A – United Kingdoms Insolvency Act, 1986 – Insolvency and Bankruptcy Code (Amendment) Act, 2019 – Appeal – Corporate Resolution Insolvency Process – Approval of Resolution Plan – Challenge before Appellate Tribunal – Submissions – Clearing ground – Valuation of Preference Shares – Impact of exclusion – Liquidation Value – Financial creditors – Appeal arises under Section 62 of Insolvency and Bankruptcy Code1 [IBC] against a judgment National Company Law Appellate Tribunal2 [NCLAT/Appellate Authority] – Reliance Infratel Limited3 [RIL] is corporate debtor – Appellants are operational creditors – By its order, National Company Law Tribunal, Mumbai4 [NCLT/Adjudicating Authority] approved resolution plan formulated in course of insolvency resolution process5 [CIRP] of Corporate Debtor – NCLAT has upheld order – Held, Hence, once requirements of IBC have been fulfilled, Adjudicating Authority and Appellate Authority are duty bound to abide by discipline of statutory provisions – It needs no emphasis that neither Adjudicating Authority nor Appellate Authority have an un-chartered jurisdiction in equity – Jurisdiction arises within and as a product of a statutory framework – In present case, resolution plan has been duly approved by a requisite majority of the CoC in conformity with Section 30(4) – Whether or not some of financial creditors were required to be excluded from CoC is of no consequence, once plan is approved by a 100 per cent voting share of CoC – Jurisdiction of Adjudicating Authority was confined by provisions of Section 31(1) to determining whether requirements of Section 30(2) have been fulfilled in plan as approved by CoC – As such, once requirements of statute have been duly fulfilled, decisions of Adjudicating Authority and Appellate Authority are in conformity with law – Appeal dismissed.
JUDGMENT :
DHANANJAYA Y. CHANDRACHUD, J.
| Index | |
| (A) | The Appeal |
| (B) | Corporate Resolution Insolvency Process |
| (C) | Approval of Resolution Plan |
| (D) | Challenge before Appellate Tribunal |
| (E) | Submissions |
| (F) | Analysis |
| (F.1) | Clearing the ground |
| (F.2) | Jurisdiction to approve a Resolution Plan |
| (F.3) | Exercise of jurisdiction |
| (G) | Conclusion |
(A) The Appeal
1. This appeal arises under Section 62 of Insolvency and Bankruptcy Code1 [IBC] against a judgment the dated 4 January 2021 of the National Company Law Appellate Tribunal2 [NCLAT/Appellate Authority]. Reliance Infratel Limited3 [RIL] is the corporate debtor. The appellants are operational creditors. By its order dated 3 December 2020, the National Company Law Tribunal, Mumbai4 [NCLT/Adjudicating Authority] approved the resolution plan formulated in the course of the insolvency resolution process5 [CIRP] of the Corporate Debtor. The NCLAT has upheld the order.
(B) Corporate Resolution Insolvency Process
2. The CIRP of the Corporate Debtor was initiated by an order dated 15 May 2018 of the NCLT. An interim resolution professional6 [IRP] was appointed on 18 May 2018. The IRP issued a public announcement on 21 May 2018 inviting claims from the creditors of the Corporate Debtor. The order of the NCLT admitting the corporate debtor to the CIRP was challenged in appeal and the order of admission was stayed on 30 May 2018. On 30 April 2019, the NCLAT vacated the stay on the CIRP. The appeal was withdrawn.
3. The CIRP resumed on 7 May 2019. A fresh public announcement was issued by the IRP on 7 May 2019 for inviting claims from creditors. The Committee of Creditors 7 [CoC] was constituted on 24 May 2019. On 30 May 2019, the CoC replaced the IRP with Mr. Anish Niranjan Nanavaty as the Resolution Professional8 [RP]. This appointment was confirmed by the NCLT on 21 June 2019.
4. During the course of the process, the RP invited Expressions of Interest9 [EOI] from prospective resolution applicants on 15 July 2019. Fifteen EOIs were received, and a provisional list was prepared and furnished to the CoC on 16 August 2019. A request for resolution plan10 [RFRP] was then issued to the prospective resolution applicants on 21 August 2019, together with an information memorandum and evaluation matrix. With the consent of the CoC, the last date for submission of resolution plans was extended till 25 November 2019. The RP received resolution plans from the four prospective resolution applicants:
(b) Reliance Digital Platform and Project Services Limited, through its division Infrastructure Projects.
(c) VFSI Holdings Pte. Ltd.
(d) UV Asset Construction Company Ltd.
5. The CoC engaged with the prospective resolution applicants between 2 January 2020 and 2 March 2020, in pursuance of which revised resolution plans were submitted. At the 16th meeting of the CoC held on 9 January 2020 (reconvened on 13 January 2020), further discussions were held and the resolution plan submitted by Reliance Digital Platform and Project Services Limited11 [the Resolution Applicant] was taken forward as a preferred resolution plan on the basis of its “feasibility, viability and implementability.” The Resolution Applicant submitted a revised resolution plan on 13 January 2020, and upon due verification of its eligibility under Section 29A of the IBC, was declared a successful resolution applicant at the 19th meeting of the CoC held on 2 March 2020. The resolution plan was approved with a 100 per cent voting share of the CoC. A letter of intent (“LoI”) was then issued by the RP on 4 March 2020, which the Resolution Applicant unconditionally accepted on 6 March 2020.
6. The NCLT has indicated the following extensions which were granted, consistent with the provisions of the IBC, for completing the CIRP:
(i) The period of stay between 30
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
