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2023 Supreme(Online)(NCLT) 2039
NATIONAL COMPANY LAW TRIBUNAL
Kuldip Kumar Kareer, Member (Judicial), Anuradha Sanjay Bhatia, Member (Technical)
Small Industrial Development Bank of India – Appellant
Versus
E & G Global Estates Limited – Respondent
I.A. No. 1150 of 2021 IN C.P. No. 2995 of 2019
For the Applicant: PCA Ayush Rajani, Khushboo Shah, i/b AKR Advisors
The court affirmed the importance of commercial wisdom in creditor decisions, emphasizing limited judicial review on approved resolution plans under the IBC.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 30(2)(a), 30(2)(b), 30(2)(c), and 30(6) - Approval of Resolution Plan - The Resolution Plan proposing payments meeting required creditor priorities was approved by 79.60% voting shares of the committee of creditors - The Resolution Applicant was found eligible and the plan was deemed feasible, conforming to statutory requirements. (Paras 20, 21, 22 and 25)
(B) Resolution Process - The judicial review of resolution plans is limited; the Committee of Creditors (CoC)'s decision stands paramount unless it contravenes the law. (Paras 22, 23 and 24)
Facts of the case:
The Corporate Insolvency Resolution Process (CIRP) was initiated against E&G Global Estates Limited under Section 7 of the Insolvency and Bankruptcy Code 2016, resulting in the appointment of a resolution professional and the formation of the Committee of Creditors.
Findings of Court:
The Resolution Plan meets the statutory requirements and does not contravene the law; it balances the interests of stakeholders and provides for payments as required under the Code.
Issues: The primary questions addressed were the eligibility of the Resolution Applicant and sufficiency of the Resolution Plan pertaining to creditor payments and legal compliance.
Ratio Decidendi: The court emphasized that the CoC's commercial wisdom governs the approval of resolution plans, asserting the limited scope for judicial intervention.
Result: The Resolution Plan submitted by Mrs. Asha Shivaji Sanap is hereby approved.
| Table of Content |
|---|
| 1. application under ibc for resolution plan approval. (Para 1 , 2 , 3) |
| 2. judicial review limitations on coc decisions. (Para 20 , 21 , 22 , 23 , 24) |
ORDER
1. The above captioned Application was filed under Section 30 (6) and Section 31 , of the Insolvency and Bankruptcy Code , 2016 (hereinafter referred to as the “Code”) by the Resolution Professional (hereinafter referred as the “Applicant”), seeking approval of the Resolution Plan, submitted by the Resolution Applicant - Mrs. Asha Shivaji Sanap, which was approved by 79.60% voting shares of the members of the Committee of Creditors (hereinafter referred to as ‘COC’).
2. The facts leading to the Application are as under:
a. Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated, vide an order dated 24.06.2020, under Section 7 of the Insolvency and Bankruptcy Code 2016 (hereinafter referred to as ‘the Code’) and Mr. Gajesh Labhchand Jain, was appointed as Interim Resolution Professional. The IRP, constituted the Committee of Creditors. The COC in its 2nd meeting held on 01.09.2020 appointed the present Applicant as the Resolution Professional. The IRP published a public announcement as per Section 15 of the Code, inviting claims from the creditors of the Corporate Debtor.
b. The Applicant published a Public Announcement in Form A in accordance with Section 15 of the Code, on 26.06.2020, in English Newspaper the Indian Express and one in Marathi Newspaper Lok Satta, inviting claims from the creditors of the Corporate Debtor.
c. The claims received and accepted by Interim Resolution Professional are as under:
I. Claims of Financial Creditors:
(Amount in Rs.)
| Sr. No | Financial Creditor | Amount Claimed | Amount Admitted | Voting % |
| 1 | Small Industries Development Bank of India (Financial Institution) | 4,07,13,665 | 4,07,13,665 | 20.40% |
| 2 | Class of creditors (Home Buyers) | 17,32,39,104 | 15,88,64,164 | 79.60% |
| GRAND TOTAL | 21,39,52,769 19,95,77,829 | 100% |
II. Claims of Operational Creditors, Government Dues and Employees and Workmen:
(Amount in Rs.)
| Sr. | Category of creditor | Claims received | Claims admitted | Amount of claims not admitted | ||
| No. | No. Amount | No. Amount | ||||
| 1 | Operational creditors (Employees) * | 15 | 1,22,73,516 | 7 | 53,83,841 | 68,89,675 |
| 2 | Operational creditors (Government Dues) | 3 | 91,726 | 3 | 91,726 | - |
| 3 | Operational creditors (other than Workmen and Employees and Government Dues) | 47 | 4,65,83,138 | 19 | 2,71,24,611 | - |
| Total | 65 | 5,89,48,380 | 29 | 3,26,00,178 68,89,675 |
* there are no claims received from any workmen.
3. After receiving the claims, the Committee of Creditors was constituted.
The constitution of COC is as under:
| r. No | Financial Creditor | Amount Claimed | Amount Admitted | Voting % |
| 1 | Small Industries Development Bank of India (Financial Institution) | 4,07,13,665 | 4,07,13,665 | 20.40% |
| 2 | Class of creditors (Home Buyers) | 17,32,39,104 | 15,88,64,164 | 79.60% |
| GRAND TOTAL | 21,39,52,769 | 19,95,77,829 | 100% |
4. The CoC decided to appoint valuers. The Resolution Professional accordingly appointed two Registered Valuers, for Plant & Machinery, Land & Building and Financial Assets to determine its fair value and liquidation value, as required under Regulation 27 of the IBBI (IRP for Corporate Persons) Regulations, 2016. The details of the Registered Valuers are as follows:
• Adroit Appraisers & Valuers Research Private Limited (Valuer 1 for Land & Building, Plant & Machinery and Financial Assets) Professional M. No. IBBI/RV-E/01/2020/121 • Mr. Bhavesh Jagdish Chandra Patel (Valuer 2 Land &Building) Professional M. No. IBBI/RV/07/2019/12505 • Mr. Manish Kumar Khanduja (Valuer 2 for Plant &Machinery) Professional M.No. IBBI/RV/02/2019/12299 • Mr. Rahul Parasrampuria (Valuer 2 for Financial Assets Professional M.No. IBBI/RV/06/2019/11639
5. These Registered Valuers submitted their reports. The Liquidation and fair value is stated as under:
(Amount in Rs.)
| Particular s | FAIR VALUE | LIQUIDATION VALUE | ||||
| Valuer 1 | Valuer 2 | Average | Valuer 1 | Valuer 2 | Average | |
| Land & Buildings | 14,44,68,166 | 15,41,30,51 9 | 14,92,99,343 | 11,55,74,53 3 | 12,45,21,00 0 | 12,00,47,76 7 |
| Plant & Machinery | 54,90,800 | 58,38,977 | 56,64,889 | 43,92, | ||
