The Appellant's challenge to the Resolution Plan was dismissed due to lack of locus standi and Res-Judicata, affirming the necessity for compliance with statutory provisions in insolvency proceedings.

JUDGMENT

(Hybrid Mode)

Per : Jatindranath Swain, Member (Technical) :

1. The instant Appeal has been filed by the Appellant against the order dated 07.12.2023 of NCLT Hyderabad in IA No.192/2023 in CP(IB) 206/7/HDB/2021, by virtue of which, the learned Adjudicating Authority allowed the implementation of the Resolution Plan filed by the Respondent No.3 (Successful Resolution Applicant).

2. The brief facts of the case are given below:-

a. The Corporate Debtor, YKM Entertainment and Hotels. Pvt. Ltd was involved in building a 5-Star Hotel at Tirupati, Andhra Pradesh. He entered into O&M Agreement with Intercontinental group under the brand name Holiday Inn on 30.12.2012 with a project cost of Rs.130.25 Crore.

b. The Corporate Debtor entered into a Term Loan Agreement dated 30.08.2011 for an amount of Rs.113.7 Crore, which was subsequently enhanced to Rs.138.7 Crore by an Agreement dated 27.10.2015.

c. The accounts of the Corporate Debtor was declared as NPA on 29.11.2016. The Financial Creditor (FC), the State Bank of India sought to enforce it securities qua the Corporate Debtor by holding a Public Auction on 08.12.2021. Further for the said auction, the reserve price of the assets of the Corporate Debtor was fixed around Rs.150 Crore.

d. On 05.01.2022, the Corporate Debtor was admitted into CIRP by an order of NCLT, Hyderabad and Respondent No. 2 was appointed as the Interim Resolution Professional. The CoC was constituted and several rounds of meetings were held between 10.03.2022 to 01.02.2023. In the 2^nd CoC meeting, held on 19.04.2022, the eligibility criteria for EoI were decided and the eligibility was fixed as a turnover of Rs.60 Crore and net worth of Rs.30 Crore and above and Expression of Interest (EoI) was called for accordingly. In the 3^rd CoC meeting held in 24.05.2022, certain queries were raised regarding the eligibility of Respondent No. 3 and in the 4^th CoC Meeting on 01.07.2022, Respondent No. 3 was held to be not eligible under section 29A of the I & B Code, 2016.

e. As none of the Resolution Plans were to the satisfaction of CoC, in the 6^th CoC meeting on 19.08.2022, it was decided to call for Resolution Plans once again in terms of Regulation 36B (7) of IBBI Regulations. This time, Respondent No. 3 was again included in the list of PRAs as per the decision in the 7^th CoC Meeting, and in the 8th CoC meeting, the Respondent No. 3 was found to be eligible and was allowed to submit the Resolution Plan.

f. In the 12th CoC meeting held on 01.02.2023 the CoC approved the Resolution Plan of Respondent No. 3. Consequently, the Resolution Professional filed an application being IA No. 192 of 2023, before the learned NCLT for approval of the Resolution Plan.

g. The learned NCLT, Hyderabad, by its order dated 07.12.2023, approved the Resolution Plan of Respondent No. 3.

3.1. The Appellant submits that he is an Aggrieved Person under section 61(1) of I & B code 2016 as he is the promoter/Ex-Director and as he has a better, more viable One Time Settlement proposal which was rejected by CoC as compared to the Resolution Plan which has been approved in the Impugned Order.

3.2. The Appellant further submits that the learned Adjudicating Authority has held that the approved Resolution Plan does not contravene by Section 29A of the Code, merely on the basis of RP’s submission without going into the records, that the Successful Resolution Applicant was not eligible as per this section 29A of the I & B Code, 2016, which has been overlooked.

3.3. The Appellant has further contended that the RP has acted contrary to Regulation 36A (5) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 by including Respondent No. 3 in the list of Prospective Resolution Applicants (PRAs), even though, he did not meet the eligibility criteria.

3.4. The App