Resolution plan approved by CoC cannot be interfered by Adjudicating Authority

SREI Infrastructure Finance Limited Vs Gujarat Hydrocarbons And Power SEZ Limited (NCLT Delhi)

NCLT Delhi held that resolution plan submitted by the Successful Resolution Applicant which was approved by CoC cannot be interfered by Adjudicating Authority. Adjudicating Authority is not empowered to analyse or evaluate commercial decision of CoC.

Facts- The present application has been filed by Mr. Rakesh Kumar Agarwal, Resolution Professional of M/s. Gujarat Hydrocarbons and Power SEZ Limited (Corporate Debtor) on 11.09.2021 under the provisions of Sections 30(6) read with Section 31 of the Insolvency & Bankruptcy Code, 2016 read with Regulation 39(4) of the Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 for approval of the Resolution Plan in respect of M/s. Gujarat Hydrocarbons and Power SEZ Limited submitted by Respondent/Successful Resolution Applicant (“SRA”) namely M/s. Zaveri & Co. Pvt. Ltd.

Conclusion- Held that the Resolution Plan submitted by the Successful Resolution Applicant namely M/s. Zaveri & Co. Pvt. Ltd. which was approved by the CoC in its 11t^h meeting dated 30.08.2021, the Plan meets the requirement of being a viable and feasible and for revival of the Corporate Debtor. By and large, there are provisions for making the Plan effective after approval by this Bench.

Held that the “Commercial wisdom of CoC” is given paramount status. This Adjudicating Authority is not endowed with the powers of jurisdiction or authority to analyse or evaluate the commercial decision of the CoC. The Resolution Plan submitted by the Successful Resolution Applicant namely M/s. Zaveri & Co. Pvt. Ltd. which was approved by the CoC in its 11t^h meeting dated 30.08.2021, this Adjudicating Authority cannot interfere in the same.

FULL TEXT OF THE NCLT JUDGMENT/ORDER

1. Brief Background of the Case

1.1. The present application has been filed by Mr. Rakesh Kumar Agarwal, Resolution Professional (“RP”) of M/s. Gujarat Hydrocarbons and Power SEZ Limited (“Corporate Debtor”) on 11.09.2021 under the provisions of Sections 30(6) read with Section 31 of the Insolvency & Bankruptcy Code, 2016 (“the Code” or “IBC”) read with Regulation 39(4) of the Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) for approval of the Resolution Plan in respect of M/s. Gujarat Hydrocarbons and Power SEZ Limited (“Corporate Debtor”) submitted by Respondent/Successful Resolution Applicant (“SRA”) namely M/s. Zaveri & Co. Pvt. Ltd.

1.2. Background of the Corporate Debtor:

The Corporate Debtor was incorporated on 17.08.2007, as a Company Limited by Shares (Non-govt. Company) having CIN: U70109DL2007PLC167079, under the Companies Act, 1956 with the Registrar of Companies, NCT of Delhi and Haryana. The Authorised Share Capital of the Corporate Debtor was Rs. 20,00,00,000/- and the Paid-up Share Capital of the Corporate Debtor was Rs. 9,80,39,210/-. The Registered Office Address of the Corporate Debtor was at 22, Community Centre, Basant Lok, Vasant Vihar, New Delhi-110057. The Corporate Debtor was incorporated for the purpose of the development, operation and maintenance of a sector specific SEZ for providing product and product-related services for the Oil & Gas, Energy and Petrochemical Sector over an area of 450.0 Hectares in Vilayat Industrial Estate in Vagra Taluka of Bharuch District in the State of Gujarat. The Corporate Debtor received in principle approval vide letter no FI/152/2007-SEZ dated 4t^h February, 2008 from the Ministry of Commerce and Industry, Department of Commerce (SEZ Section). Government of India. The letter of approval granted the status of Developer to the Corporate Debtor as defined under the SEZ Act.

1.3. An application under section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) was filed by the Financial Creditor i.e., M/s. SREI Infrastructure Finance Limited against the Corporate Debtor i.e., M/s. Gujarat Hydrocarbons and Power SEZ Limited and the said application was admitted by this Adjudicating Authority, Bench III vide order dated 18.11.2020 and we declared moratorium and Mr. Rakesh Kumar Agarwal was appointed as an Interim Resolution Professional (IRP).

1.4. The Resolution Plan (a revised/Final Resolution Plan dated 5^th April 2021 as well as 23^rd August 2021) was submitted by the Successful Resolution Applicant namely M/s. Zaveri & Co. Pvt. Ltd. which was approved by the CoC in its 11^th meeting dated 30.08.2021 under Section 30(4) of the IBC by 100% voting share in respect of the CIRP of the Corporate Debtor after considering its feasibility and viability.

2. Collation of claims by RP

2.1. In terms of Section 13 and Section 15 of the Code, the Applicant/RP has submitted that the public announcement was published in newspapers i.e., Financial Express (English Edition) and Hindustan Times (Hindi Edition) Delhi Edition on 21.11.2020 to invite the stakeholders for submission of their claims.

2.2. In response to the public announcement (publication of Form-A) made, the Applicant constituted the Committee of Creditors (“CoC”) on 18.12.2020 under Section 21(1) of the Code read with Regulation 13 & 17 of CIRP Regulations. The 1st CoC Meeting was convened on 18.12.2020 wherein the IRP was confirmed as the Resolution Professional (RP) by 100% votes.

3. Evaluation and voting

3.1. The 2^nd CoC Meeting was convened on 14.01.2021 wherein the CoC approved the issuance of the Invitation for Expression of Interest (“EoI”) in Form-G along with the Eligibility Criteria for inviting Prospective Resolution Applicants (“PRAs”). The RP published the Form-G in terms of Section 25(2)(h) of the Code read with Regulation 36A(4)(a) of the CIRP Regulations in newspapers on 19.01.2021 and the last date for accepting the Resolution Plan was fixed on 15.03.2021.

3.2. The 3^rd CoC Meeting was convened on 16.03.2021 wherein it was informed that the RP received 9(nine) EoI out of which 8(eight) satisfied the eligibility criteria as approved by the CoC. Further, RP received requests from M/s. Gandhi Realty (India) Pvt. Ltd., M/s. Zaveri & Co. Pvt. Ltd., M/s. Shah Developers and from Vision India Fund for extension of the last date of submissions of the Resolution Plan. Therefore, RP proposed for extension of last date of submission of Resolution Plan and the CoC member approved the extension for submission of the Resolution Plan from 15.03.2021 to 05.04.2021.

3.3. The 4^th CoC Meeting was convened on 07.04.2021 wherein it was informed that two Resolution Plans have been received from M/s. Zaveri & Co. Pvt. Ltd. and from M/s. Shah Developers. The only valid Resolution Plan was received from M/s. Zaveri & Co. Pvt. Ltd. However, a collective view was taken by the CoC and the CoC approved the extension for submission of the Resolution Plan from 05.04.2021 to 20.04.2021. Further, the CoC resolved to extend the CIRP by a period of 90 days (ending on 17.05.2021). Accordingly, the Resolution was proposed which was approved by the CoC. Thereafter, the RP filed the Application for seeking an extension for a period of 90 days of the CIRP. This Adjudicating Authority allowed the extension application.

3.4. The 5t^h CoC Meeting was convened on 21.04.2021 wherein the RP proposed for extension of submission of last date of Resolution Plan and the CoC approved the extension for submission of the Resolution Plan from 20.04.2021 to 06.05.2021.

3.5. The 6^th CoC Meeting was convened on 07.05.2021. The 7^th CoC Meeting was convened on 11.05.2021 wherein it was informed to the CoC that three Resolution Plans has been received from M/s. Zaveri & Co. Pvt. Ltd., M/s. Shah Developers and SMAIT (SREI Multiple Asset Investment Trust) and the same was placed before the CoC. All the Resolution Plans were handed over to M/s. Sumedha Management Solutions Pvt. Ltd., to check the eligibility of each of the Prospective Resolution Applicants with respect to the qualification u/s 29A and confirm the conditions referred to in section 30(2) of IBC. The 8^th CoC Meeting was convened on 03.08.2021.

3.6. The 9^th CoC Meeting was convened on 10.08.2021 wherein it was informed to the RP that the Resolution Plan submitted by all the Prospective Resolution Applicants (PRAs) contains certain conditionality and the RP was directed to communicate the same to the PRAs with a request to submit revised Resolution Plan without any condition and present the Resolution Plan before the CoC by 13.08.2021. The 10^th CoC Meeting was convened on 17.08.2021 wherein it was stated by the RP that M/s. Zaveri & Co. Pvt. Ltd. and M/s. Shah Developers requested further time to provide their final Resolution Plan, the CoC member approved the extension for submission of the Resolution Plan. The 11^th CoC Meeting was convened on 30.08.2021 wherein the RP presented all Plans to discuss and to evaluate as per evaluation matrix, to deliberate on the feasibility and viability and the manner of distribution proposed in each plan and other matters regarding payments, etc. The Resolution Plans were vetted on various parameters and the Resolution Plan of M/s. Zaveri & Co. Pvt. Ltd. was approved with 100% voting shares.

4. The RP submits that a total of 11 (Eleven) CoC meetings have been held during the CIRP period which are as follows: