Pani Logistics vs Vikas G. Jain - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (03 Apr 2023)

Mere allocation of meagre amount cannot be a ground to question the resolution plan

MANU/NL/0313/2023

Insolvency

The Appellant s is an Unsecured Financial Creditor who has vote share in the CoC of 0.264%. The plan has been approved by the CoC with more than 99% vote share.

The Appellant challenging the order submits that the objections with regard to partial rejection of the claim of the Appellant and other creditors being pending before the Adjudicating Authority, the plan ought not to have been approved. It is further submitted that there has been several material have come in to light which indicate that the Asset Reconstruction Company is a fraudulent company which is involved in several illegal activities. An additional affidavit has been filed by the Appellant bringing on record Income Tax raid and several newspaper articles and press release issued by Ministry of Finance dated 15.12.2021. It is submitted that a fraudulent company should not be allowed to take over the Corporate Debtor.

The commercial wisdom of the Committee of Creditors in approval of a resolution plan is to be given due regard is the settled law of the of Supreme Court in "Essar Steel India Ltd. Committee of Creditors vs. Satish Kumar Gupta". Approval of Resolution Plan by the Adjudicating Authority can be questioned on a limited ground that plan is violative of any statutory provision including provision of Section 30 Sub-section (2) of the I&B Code.

One of the submission which has been raised by learned counsel for the Appellant is that very limited amount has been paid to the Appellant and other creditors that comes to 0.0969% of the admitted claim.

Present is not a case that it is contended that payment to the other creditors/ Operational Creditors is less than the liquidation value. The allocation in the plan to the creditors can be questioned when the plan value earmarked for them is less than the liquidation value. Mere allocation of meagre amount cannot be a ground to question the resolution plan. It is also submitted by learned counsel for the Appellant that several cases against the 'Rare Asset Reconstruction Ltd.' are pending including Income Tax raid. The law will take its own course. There is no reason to entertain this Appeal. Appeal is dismissed.

Tags : RESOLUTION PLAN APPROVAL LEGALITY