Approval of Resolution Plan by CoC Bars Subsequent Revisions, and Written Orders Prevail Over Oral Directions

NCLAT held that the approval of the Resolution Plan by the Committee of Creditors bars any subsequent revisions and that written orders take precedence over oral directions.

The National Company Law Appellate Tribunal (NCLAT), Principal Bench led by Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Arun Mitra and Mr. Arun Baroka reviewed a bunch of two appeals and observed that once the CoC, exercising its commercial wisdom, approves a resolution plan within the stipulated timeline, any subsequent attempt to submit a revised plan is barred, and an unchallenged written order of the Adjudicating Authority supersedes any alleged oral directions, ensuring finality in the CIRP process.

The appeals arose from the order of the NCLT, Mumbai Bench (Court III), dated May 2, 2024, which dismissed IA No. 124/2024 filed by Sandeep Jayantilal Vadodria and Others while allowing IA No. 5826/2023 filed by Resolution Professional (RP) for approval of the Resolution Plan. The CIRP against Adico Forge Pvt. Ltd. commenced on June 23, 2023, following an application under Section 9 of the IBC. Two resolution plans were submitted—one by Saverni Neutech Pvt. Ltd. through a consortium and the other by Trinity India Forgetech Pvt. Ltd. Despite several extensions, Saverni Neutech failed to submit a revised plan by the final deadline of December 15, 2023, leading to the approval of Trinity India’s plan with 92.87% of the CoC’s votes.

On December 18, 2023, Saverni Neutech requested a refund of its EMD, which the RP returned, indicating the consortium’s withdrawal from the process. Later, on December 30, 2023, it filed IA No. 124/2024 seeking permission to submit a revised plan, but the NCLT, on January 5, 2024, directed the RP not to consider any fresh plans. The NCLT ultimately dismissed Saverni Neutech’s application on May 2, 2024, and approved Trinity India’s resolution plan. Aggrieved, Sandeep Jayantilal Vadodria and Prem Trading Company filed appeals before the NCLAT, arguing that Saverni Neutech was unfairly denied the chance to submit a revised plan and challenging the voting process on the grounds of conflict of interest.

The NCLAT observed that the approval of Trinity India’s resolution plan reflected the commercial wisdom of the CoC. It noted that Saverni Neutech’s request for an EMD refund demonstrated its withdrawal, and no further submission was warranted after the December 15, 2023 deadline. The tribunal emphasized that any alleged oral direction on January 1, 2024, allowing the submission of a revised plan was rendered moot by the written order of January 5, 2024, which prohibited the consideration of new plans. Since this order remained unchallenged, the tribunal found no merit in the applicants’ claim.

The NCLAT also rejected Prem Trading Company’s objections, highlighting that its authorized representative had participated in the CoC meeting and voluntarily exited after voting on select agenda items. Given its minimal 2.48% voting share, the company’s vote had no impact on the outcome, which was predominantly secured by HDFC Bank Ltd. with the majority share. In light of these findings, the NCLAT upheld the NCLT’s order, affirming that the approval of Trinity India’s plan was consistent with the provisions of the IBC and dismissed both appeals.

Mr. Puneet Thakur, Mr. A. Venayagam Dalan and Mr. Gaurav Pal, Advocates represented the Appellant for CA Nos. 1020-1021 of 2024.

Mr. Abhijeet Sinha, Sr. Advocate with Mr. Amanpreet Singh Rahi, Advocates appeared for the Appellant for CA Nos. 1003-1004 of 2024.

Mr. Arpit Singhvi and Mr. Kunal Kannungo, Advocates represented the RP.

Mr. Abhirup Dasgupta, Mr. Rohan Aggarwal and Mr. Akshat Khetan, Advocates appeared for Respondent No. 3.

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REEDLAW 2024 NCLAT Del 09562