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Oriental Bank of Commerce Vs. Vivita Limited - (National Company Law Tribunal) (21 Jun 2021)

Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved

MANU/NC/1562/2021

Insolvency

Present is an Application filed by the Resolution Professional under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking approval of the Resolution Plan submitted by consortium of V. Square and Bombay Carrier (Resolution Applicant). The Resolution Plan has been approved by the CoC through E-voting with 72.27% votes.

In K. Sashidhar v. Indian Overseas Bank & Others, the Hon'ble Apex Court held that, if the CoC had approved the Resolution Plan with requisite percent of voting share, then as per Section 30(6) of the IBC, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that, the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon'ble Court observed that the role of the NCLT is 'no more and no less'. The Hon'ble Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan "as approved" by the requisite percent of voting share of financial creditors. Even in that enquiry, the grounds on which the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2), when the Resolution Plan does not conform to the stated requirements.

In CoC of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors., the Hon'ble Apex Court clearly laid down that, the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved.

The Resolution Plan as approved by the CoC under Section 30(4) of the IBC meets the requirements of Section 30(2) of the IBC and Regulations 37 and 38 of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the IBC and is in accordance with law. The same needs to be approved as provided under Section 31 of the IBC. The Resolution Plan submitted by Consortium of V. Square and Bombay Carrier annexed to the Application is approved. Application allowed.

Tags : RESOLUTION PLAN   APPROVAL   POWER  

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