ORDER

(Virtual Mode) [Per: Shreesha Merla, Member (Technical)] 1. Aggrieved by the Order dated 13.10.2023, in IA(IBC)/308/KOB/2023 in CP(IB)/34/KOB/2021, the Appellant / Promoter and Suspended Director of the Corporate Debtor Company, preferred this Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (herein after referred to as ‘the Code’).

2. IA(IBC)/308/KOB/2023 was preferred by the Resolution Professional (RP) on 17.07.2023 seeking approval of the Resolution Plan which was approved by the Committee of Creditors (CoC) with a 100 % voting share in its 12th meeting which was held on 26.06.2023. The Adjudicating Authority, while allowing the Application observed that the Resolution Plan was in accordance with Sections 30 & 31 of the Code and that it also complies with Regulations 38 & 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

3. Learned Counsel for the Appellant strenuously contended that on account of ill health, the Appellant could not actively participate during the CIRP and despite his conditions filed an Application seeking to intervene against the approval of the Resolution Plan which was not considered by the Adjudicating Authority. It is contended that the CoC was illegally constituted without including Edelweiss Asset Reconstruction Company (EARCL), which was the assignee of the debt from Federal Bank on 10.12.2012, enjoying a charge of Rs. 5.21 Crores plus interest in relation to a Corporate Guarantee from the Corporate Debtor in favour of the debt availed by another group Company, namely Orient Extraction Pvt. Ltd. It is submitted that neither Edelweiss nor Federal Bank had filed a Claim with the RP. It is contended that had Edelweiss been included in the CoC, it would have constituted 80% of the voting share and even though Edelweiss did not submit its claim, the (Resolution Professional) was duty bound to inform Edelweiss about the pendency of the CIRP proceedings.

4. It is also strenuously argued by the Learned Counsel for the Appellant Mr. Avinash Krishnan Ravi that de hors the illegal constitution of the CoC, the Corporate Debtor has been improperly valued as four assets which were mortgaged to Federal Bank were not included in the valuation Report. It is also submitted that several properties worth Rs. 25 Crores (and almost five times the Liquidation value), has been omitted, which is glaring, as the actual fair value is Rs. 9.52 Crores and the Liquidation value is Rs. 5.09 Crores. It is submitted that the Appellant had written to the RP seeking details of the CIRP, but there was no response. It is submitted that the Resolution Plan is discriminatory in nature amongst creditors who fall within the same class and does not provide Operational Creditors with minimum Liquidation value and therefore the Resolution Plan is in contravention of Section 30(2) of the Code.

5. It is also the case of the Learned Counsel for the Appellant that the Appellant has the ‘locus’ in challenging the Plan as was decided by this Tribunal in the matter of ‘M.K. Rajagopal v. Dr. Periasamy Palani Gounder’ in CA (AT) (Ins.) No. 164/2022 and also upheld by the Hon’ble Apex Court in Civil Appeal No. 1682-1683/2022. It is also contended that the Plan provides for unilateral appropriation of fruits of avoidance transactions by the Resolution Applicant in violation of the Judgement of the Hon’ble Delhi High Court in TATA Steel BSL v. Venus Recruiters Pvt. Ltd. in 2023/DHC/000257. 6. It is the main case of the Second Respondent / the Successful Resolution Applicant (SRA) that the Appellant has no locus to challenge the Order of the approval of the Resolution Plan as the Appellant is the suspended Director whose locus ends once the affairs of the Corporate Debtor are handed over to the IRP.

Learned Counsel placed reliance on the Judgement of this Tribunal in the matter of ‘Dr. Ravi Shankar Vedam vs. Tiffins Barytes Asbestos and Paints Limited and others’ in T