Gajjala Yoganand Vs Birendra Kumar Agarwal (NCLT Hyderabad)
NCLT Hyderabad held that decision to consolidate, or not, rests with the Committee of Creditors (CoC). However, here since the consolidation of CIRP of both Corporate Debtors at last stage is denied since the same is only an attempt to disrupt the successful resolution process.
Facts- This application has been filed by the suspended director of M/s. Manjeera Retail Holdings Private Limited (MRHPL), which, along with its holding company, Manjeera Constructions Limited (MCL), is undergoing Corporate Insolvency Resolution Process (CIRP). Both Corporate Debtors were admitted into CIRP by this Authority on 18.07.2023, and the Resolution Plans approved by their respective Committees of Creditors (CoC) have been submitted by the common Resolution Professional (RP).
The applicant contents that both MRHPL and MCL have “common assets and liabilities being inextricably intertwined apart from the other criteria laid down in binding precedents such as common directorship, common financial creditors, common resources, interlinkages of finances, common registered office etc” and therefore “CIRP of both Corporate Debtors be consolidated which will lead to value maximisation and benefit several stakeholders of the Corporate Debtors”.
Conclusion- In the present case, the decision to consolidate, or not, rests with the CoCs, who are not only better equipped to make such determinations but also have a vested interest in the outcome, and whose commercial wisdom is paramount in insolvency matters and beyond judicial review.
