Essar (India) Ltd Vs Prabhat Technologies (India) Ltd (NCLAT Delhi)
NCLAT Delhi held that rejection of approved resolution plan on account of alleged fraud without giving an opportunity to resolution applicant to explain its position is against the principle of natural justice. Accordingly, matter remanded back.
Facts- The Committee of Creditors had approved the subject resolution plan dated 23.10.2020 in the 9th CoC Meeting with an overwhelming majority of 98.15%. on 07.11.2020. However, vide the Impugned Order dated 09.01.2024 passed by National Company Law Tribunal, Mumbai Bench-I (‘NCLT’), the resolution plan submitted by the Appellants was rejected on sole basis of the Respondent No. 2/State Bank of India claiming to have unilaterally withdrawn its consent to the plan. It is argued NCLT, without there being an application under Section 33 (2) of the IB Code had directed the Corporate Debtor to be liquidated.
Conclusion- Held that we find the Impugned Order is a non-speaking order and even against principles of natural justice, as the aggrieved party, viz the Resolution Applicants, whose plan was rejected on account of an alleged fraud, was never given an opportunity to explain its position. Further the impugned order does not give any reason for rejecting the Appellants’ resolution plan, once duly approved by the Committee of Creditors with an overwhelming majority of 98.15%. NCLT rather had merely accepted a statement of Respondent 2/SBI to permit withdrawal of consent. It ignored its earlier Order dated 19.12.2023, whereby it had directed Respondent No. 2 to file a “formal application” to bring on record the fact the Bank of India and Union Bank of India, had also withdrawn their consent. Thus, we set aside the impugned order and remand the matter to the Ld. Adjudicating Authority to look into the issues above and to decide the matter afresh through a reasoned order.
