A prospective resolution applicant lacks standing to challenge a resolution plan's approval if it fails to submit its own plan, emphasizing procedural integrity in insolvency processes.

JUDGEMENT

Per Justice N. Seshasayee, Member (Judicial)

This appeal is preferred by a Prospective Resolution Applicant (PRA) challenging an order the Adjudicating Authority (NCLT-V, Mumbai) dismissing its application in I.A. No. 1851 of 2024 in C.P (IB) 144/MB/2021, which it had taken out for the rejection of resolution plan submitted by the third respondent/SRA, inter alia on the ground that the SRA is ineligible to participate in the resolution process as it is a related party within the meaning of Section 29A of the IBC.

FACTS

2.1 The controversy herein involved arises out a CIRP proceedings which came to be initiated against certain Megi Agro Chem Ltd.. The relevant facts are: 

a) On admission of the CD to CIRP, the first respondent herein was appointed as the Resolution Professional. The resolution process progressed to the stage of invitation of Expression of Interest (EoI, for short) through Form G. The RP Had issued Form-G at least thrice, since the first two attempts at the insolvency resolution process of the CD were not successful.

b) In the first two occasions, the appellant very enthusiastically submitted its EOI, but it did not sustain its early enthusiasm as it failed to submit any resolution plans. With the leave of the Adjudicating Authority, the RP proceeded to issue a Form G for the 3^rd time. Part of the issues which the appellant has raised in this appeal has transpired thereafter:

 On invitation to submit EoI for a third time, the appellant submitted its EoI yet another time. Subsequently, the RP released its final list of PRAs, in which both the appellant and the 3^rd respondent figured.

They were invited to submit their resolution plan on or before 04.09.2023.

 The 3^rd respondent submitted it within the time stipulated therefor.

But not the appellant. On 04.09.2023, the last date for submitting the plan, the appellant, instead of submitted its plan, sent an e-mail to the RP (the first respondent herein) and also the CoC (the second respondent) and followed it up with another mail on 06.09.2023. In both these mails, the appellant sought extension of time for the submission of the resolution plan by 15 days.

 The CoC, in its 9th meeting held on 08.09.2023, however, chose to grant time to the appellant only till 13.09.2023. The appellant however, did not submit its resolution plan even by 13.09.2023. Instead, on 12.09.2023 (the penultimate day for submitting the plan) it sent yet another e-mail inter alia to the RP and the CoC conveying its willingness to submit a plan, and required that the meeting of the CoC be held on 16.09.2023. It still did not submit its plan by 13.09.2023.

c) On 13.09.2023, the RP proceeded to convene the 10^th meeting of the CoC to be held on 14.09.2023, but on that day no serious business had taken place. The next meeting (the 11th meeting of the CoC) was held on 20.09.2023. The appellant had not submitted any plan even by then.

d) On 20.09.2023, the CoC opened the only plan before it, the one which the 3^rd respondent had submitted. The CoC required the 3^rd respondent to improve its commercial offer.

e) On the very next day (21.09.2023), CoC met for the 12th time. On this date, it approved the resolution plan of the 3^rd respondent. The matter is now pending before the Adjudicating Authority for its approval.

3. This is the setting. Now the appellant would come forward with I.A.1851 of 2024 for rejection of the resolution plan of the 3rd respondent. Its contentions are:

a) That the 3rd respondent did not satisfy the net-worth value as has been fixed in Form G. Therefore, shortlisting the 3^rd respondent even as a PRA is faulty.

b) A certain Akhil Rishi Agarwal and his mother Kumkum Kamalesh Agarwal were the directors of the SRA company. Of them Kumkum was the wife of one Rishi Kamalesh Agarwal and their son is Akhil Rishi Agarwal. Be that as it may, Kamalesh Agarwal was declared a wilful defaulter and inasmuch as the aforesaid two directors of the SRA are related to Rishi Agarwal, they fall within Se