Committee of Creditors Vs Anil Tayal (NCLAT Delhi)
Summary: The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, dismissed an appeal by the Committee of Creditors through its representative Jaga Ath Kar against the order of the NCLT, New Delhi, Court-III, refusing to reject the valuation reports obtained by the Resolution Professional of Horizon Buildcon Pvt. Ltd. in relation to the IRIDIA group housing project. The appellants sought acceptance of alternative valuation reports dated 21.12.2022 or appointment of a fresh valuer to determine fair value and liquidation value. The NCLAT first condoned a delay of 13 days in filing the appeal.
The NCLT had rejected the valuation challenge after noting that the Committee of Creditors had approved the resolution plan on 06.10.2022. Although the NCLAT disagreed with the NCLT’s observation concerning the homebuyers’ authorisation and proceeded on the assumption that the appellants were properly authorised, it found no substantive ground for interference. The Resolution Professional had appointed two valuers under Regulation 35 of the CIRP Regulations and a third valuer because the first two valuations differed by more than 10%. The valuation objections had been raised and deliberated in the 12th and 13th CoC meetings, and the resolution plan had already been approved and submitted for approval to the Adjudicating Authority.
Relying on the Supreme Court ruling in Ramkrishna Forgings Limited v. Ravindra Loonkar, Resolution Professional of ACIL Ltd. & Anr., the NCLAT held that the NCLT had committed no error in rejecting the application seeking revaluation after the approved resolution plan. The appeal was accordingly dismissed. The decision reinforces the limited scope for reopening an insolvency valuation exercise after it has been conducted under the applicable regulations and considered in the resolution-plan approval process.
Cases Discussed
1. Ramkrishna Forgings Limited Vs Ravindra Loonkar, Resolution Professional of ACIL Ltd. & Anr. (Supreme Court); Civil Appeal No. 1527 of 2022; 21/11/2023. The Supreme Court set aside an order directing revaluation after a resolution plan had been approved. The NCLAT expressly relied on this authority in paragraph 9 to reject the valuation challenge. The TaxGuru link is to a case-law review discussing this decision, not a verified dedicated judgment page.
FULL TEXT OF THE ORDER OF NATIONAL COMPANY LAW APPELLATE TRIBUNAL
This is an application praying for condonation of 13 days’ delay in filing the Appeal. The ground taken in the affidavit is that renovation work was going on in the office of the counsel for the Appellant due to which file got misplaced and the Authorized Representative could not sign the appeal as he was in Rajasthan for some personal exigencies. Cause shown sufficient, delay is condoned. I.A. No.5896 of 2023 is disposed of.
2. Heard learned counsel for the Appellant and learned counsel for the Resolution Professional. This Appeal has been filed against the order dated 25.07.2023 passed by the NCLT, New Delhi, Court-III in I.A. No.1993 of 2023. The Application was filed by the Appellant praying for following reliefs in I.A. No.1993 of 2023:
“a) Reject the valuation report obtained by the RP from its valuers and direct him to consider the valuation reports dated 21.12.2022 given by Mr. Anil Kumar Saxena and Ms. Aditi Aggarwal; or in the alternative;
b) Appoint a fresh valuer to ascertain a fair value and liquidation value of the assets of Group Housing Society Known as IRIDIA in the matter of M/s Horizon Buildcon Pvt. Ltd.;
c) Pass any other or further orders/directions as this Hon’ble Tribunal may deem fit and appropriate in the present circumstances of the matter and in the interest of justice.”
3. The Adjudicating Authority noticing the fact that Committee of Creditor has already approved the Resolution on 06.10.2022 has rejected the application. The Adjudicating Authority further observed that the application filed by a set of homebuyers has not been filed through Authorised Representative. Aggrieved by which order this appeal has been filed.
4. Learned counsel for the Appellant submit that the observation of the Adjudicating Authority that application filed by a set of homebuyers has not been filed through Authorised Representative is incorrect. It is submitted that the application was authorised by the homebuyers and earlier Authorised Representative has withdrawn themselves, hence, the application was fully maintainable.
5. We are of the view that the said observation made by the Adjudicating Authority that application is not filed by Authorised person is not correct and we proceed on the assumption that Appellant were authorised representative of the homebuyers in the present case.
6. The Resolution Professional in the CIRP proceedings, appointed two valuers under Section 35 of the CIRP Regulations and the two valuers have submitted their valuation reports. There being difference of more than 10% in the valuation of two valuers, a third valuer was appointed. After completion of the valuation exercise, resolution plan was placed before the CoC for consideration. The CoC approved the Resolution Plan and application has already been filed by the Resolution Professional for approval of the plan before the Adjudicating Authority.
7. Learned counsel for the Appellant submits that Appellant in 12th and 13th meeting of the CoC has raised issued of valuation. Learned counsel for the Appellant has referred to the ‘C’, Item 2 and 3 (page 90 of paper book). The question with regard to valuation report was placed before the CoC and deliberated and reply of the Resolution Professional who was Chairman of the CoC was also noticed in the meeting of the CoC.
8. Learned counsel for the Appellant submits that valuation is at higher side which shall affect the homebuyers. Valuation has been obtained as per Regulations and Resolution Plan has been already approved, we, thus, are of the view that the Adjudicating Authority did not commit any error in rejecting the application filed by the Appellant.
9. Learned counsel for the Respondent has relied on judgment of Hon’ble Supreme Court in “Ramkrishna Forgings Limited vs. Ravindra Loonkar, Resolution Professional of ACIL Ltd. & Anr., Civil Appeal No.1527 of 2022” decided on 21.11.2023. In the said case, after approval of the Resolution Plan question of valuation was sought to be raised and the Adjudicating Authority has directed for valuation, which order was set aside by the Hon’ble Supreme Court. The said judgment fully supports the submission of learned counsel for the Respondent.
10. We, thus, are of the view that no error has been committed by the Adjudicating Authority in rejecting application filed by the Appellant. Appeal is dismissed.
