Astral Agro Ventures Vs Vakati Balasubramanyam Reddy (NCLAT Delhi)
NCLAT Delhi held that Prospective Resolution Applicant or unsuccessful Resolution Applicant doesn’t have vested right to challenge a resolution process or an approved resolution plan. Accordingly, appeal is dismissed.
Facts- CIRP proceedings were initiated against Megi Agro Chem Ltd. This appeal is preferred by a Prospective Resolution Applicant (PRA) challenging an order the Adjudicating Authority (NCLT-V, Mumbai) dismissing its application, 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.
Conclusion- The conclusion that could be drawn is that, while a PRA or an unsuccessful RA does not have a vested right of substantive nature to challenge a resolution process or an approved resolution plan, it may have a procedural right to alert the Adjudicating Authority about the quality of the resolution process, provided its relevance in procedure is not lost.
When on facts locus standi of the appellant is reduced to procedural irrelevance due to its failure to submit a resolution plan within the time stipulated, it does create considerable uneasiness in accommodating it to object to CoC’s approval of the resolution plan. Its voice does not merit consideration.
