The Commercial wisdom of the Committee of Creditors in approving resolution plans must be respected, and judicial review is limited to statutory compliance under the Insolvency and Bankruptcy Code.

JUDGMENT

[Per: Barun Mitra, Member (Technical)]

The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 (‘IBC’ in short) by the Appellant arises out of the Order dated 20.12.2023 (hereinafter referred to as ‘Impugned Order’) passed by the Adjudicating Authority, National Company Law Tribunal, Mumbai Bench-I in IA-1177/2021 and IA-1768/2021 in CP (IB) No. 2445 of 2019. By the impugned order, the Adjudicating Authority approved the resolution plan of the Successful Resolution Applicant (‘SRA’ in short) filed by the RP vide I.A. 1177/2021 and dismissed the I.A. 1768 of 2021 filed by the ex-Director of the Corporate Debtor objecting to the approval of the resolution plan of the SRA. Aggrieved by this order, the present appeal has been preferred by the ex-Director of the Corporate Debtor-Appellant.

2. Coming to the factual matrix of the present case, it has been brought to our notice that the Corporate Debtor-Genesis Resorts Pvt. Ltd. had availed a loan of Rs.149.05 cr from the Financial Creditor-Bank of Baroda during the years 2012 to 2014. The loan facility had been granted for construction of a hotel on a plot of land at Vile Parle near the Mumbai Airport. The Corporate Debtor applied for restructuring of the credit facilities which was allowed by Financial Creditor-Bank of Baroda on 18.02.2015. However, the Corporate Debtor failed to repay the outstanding loan to the Bank of Baroda leading to classification of their account as NPA on 30.11.2016. The Bank of Baroda thereafter approached the Adjudicating Authority for initiating Corporate Insolvency Resolution Process (‘CIRP’ in short) of the Corporate Debtor for realisation of a total debt amounting Rs.231.09 cr comprising of Rs.149.05 cr as principal and Rs. 82.04 cr as interest. The Adjudicating Authority admitted the Section 7 petition on 11.12.2019 admitting the Corporate Debtor into CIRP.

3. Carrying the CIRP process forward, the Resolution Professional (‘RP’ in short) invited EOI by issuing a public notice in Form-G on 28.01.2020 in terms of Regulation 36A(1) of the IBBI (Insolvency Process Regulations for Corporate Persons) Regulations,2016 (‘CIRP Regulations’ in short). The timelines for submission of EOI got extended from time to time with the approval of the Committee of Creditors (‘CoC’ in short) till January, 2021. The RP also appointed Registered Valuers for valuation of the assets of the Corporate Debtor and the first CoC meeting held on 10.01.2020 had approved the appointment of these valuers. Basis their valuation reports dated 09.07.2020, 08.09.2020 and 09.10.2020, the average liquidation value of the Corporate Debtor was determined as Rs.83.52 Cr. and the fair value fixed at Rs.118.88 Cr.

4. Pursuant to the issue of Form-G, 17 EOIs were received. However, only two resolution plans were finally received by the RP. M/s Finquest Solutions Pvt. Ltd.-SRA submitted its plan which was approved by the CoC in its 10th meeting with 100% vote share following which the RP filed IA No. 1177 of 2021 on 05.04.2021 before the Adjudicating Authority for approval of the Resolution Plan. The Appellant - ex Director of the Corporate Debtor filed I.A. No. 1768 of 2021 bef