State Bank of India & Ors Vs Consortium of Mr. Murari Lal Jalan And Mr. Florian Fritsch & Anr (Supreme Court of India)
Supreme Court held that jurisdiction under Article 142 of the Constitution of India invoked due to non-implementation of approved resolution plan even after five years of the approval. Accordingly, it is directed that the corporate debtor be taken in liquidation.
Facts- These appeals arise from the judgment and order dated 12.03.2024 passed by the National Company Law Appellate Tribunal (NCLAT) wherein the NCLAT dismissed the appeal and upheld the order dated 13.01.2023 passed by the National Company Law Tribunal (NCLT). The order of the NCLT held that Respondent No.1 had fulfilled all the Conditions Precedent as stipulated in the Resolution Plan. The NCLAT further issued several directions including a direction that the Performance Bank Guarantee of Rs. 150 Crore could be adjusted towards the first tranche payment of Rs. 350 Crore which was to be made by Respondent No.1.
Conclusion- Several decisions of this Court have highlighted the importance of a speedy resolution process under the IBC, 2016 in the context of either completing the CIRP process in a time-bound manner as per Section 12 of the IBC, 2016 or ensuring that the Liquidator does not cause unnecessary delay or inefficiency in the Liquidation process. A primary and predominant consideration behind minimizing delay is to ensure that the assets of the Corporate Debtor do not get frittered away or depreciated due to the time lag caused either during the CIRP or during the liquidation process overseen by the Liquidator. Such a time bound action is also equally important and imperative while the Resolution Plan is being implemented by the successful resolution applicant. Unnecessary delay caused in implementation of the Resolution Plan would also lead to similar consequences of the assets of the corporate debtor diminishing in value. Therefore, there is no doubt that the timely implementation of the Resolution Plan is also one of the underlying objectives of the IBC, 2016.
