NCLAT upholds the Adjudicating Authority's Right to allow modifications to the resolution plan.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan and Arun Baroka (Technical Member) was hearing an appeal and upheld the Adjudicating Authority's right to allow modifications to the Resolution Plan upon the Appellant's request and dismissed claims of discrimination, stating that clarifications were uniformly sought from all Resolution Applicants. It stressed the importance of providing comprehensive information to the CoC to avoid biased perceptions and clarified the CoC's discretionary power regarding payment terms. The matter was remanded to the Adjudicating Authority for fresh consideration within a 60-day timeline.
In a consolidated judgment, the National Company Law Appellate Tribunal (NCLAT) addressed three appeals stemming from the same order issued on 06.10.2023 by the Adjudicating Authority of the National Company Law Tribunal, Mumbai Bench, Court IV. The appeals pertained to various aspects of the approval process for the resolution plan concerning SKS Power Generation Chhattisgarh Limited, a corporate debtor.
The case revolved around the Corporate Insolvency Resolution Process (CIRP) initiated against SKS Power Generation Chhattisgarh Limited on 29.04.2022. Following the initiation of the CIRP, the Resolution Professional (RP) facilitated the submission of Expression of Interest (EoI) from Prospective Resolution Applicants (PRA) via `Form-G'. Subsequently, Resolution Plans were submitted, negotiations took place, and a revised Resolution Plan was eventually submitted by multiple applicants. Following an inter-se bidding process, the Resolution Plan of SEML (Successful Resolution Applicant) was approved by the Committee of Creditors (CoC) on 08.06.2023.
However, the RP filed an application before the Adjudicating Authority seeking approval of SEML's Plan, which was met with challenges from other unsuccessful Resolution Applicants. The Adjudicating Authority partially allowed one such application, leading to appeals from SEML, Vantage Point Asset Management Pte. Ltd., and Torrent Power Limited.
The appeals primarily contested the Adjudicating Authority's interference with the CoC's commercial decision-making process, alleging violations of jurisdiction and principles of natural justice. Concerns were raised regarding the completeness of financial data provided to the CoC, the fairness of the evaluation process, and the treatment of various aspects of the Resolution Plans.
After considering the arguments presented by all parties and reviewing the records, the NCLAT rendered its judgment. It upheld the decision to allow modifications requested by the Appellant regarding certain stipulations of the Resolution Plan. Additionally, it dismissed claims of discrimination, emphasized the importance of complete and deliberated information before the CoC, and clarified the CoC's authority in deciding payment terms.
Ultimately, the NCLAT set aside the earlier order and remanded the matter to the Adjudicating Authority for fresh consideration, directing an expedited resolution process within 60 days. The judgment concluded by disposing of all appeals without imposing any costs.
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