Dr. Ravi Shankar Vedam vs. Tiffins Barytes Asbestos and Paints Limited - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (13 Jun 2023)

Shareholders are excluded from 'representation', 'participation' or 'voting in the CoC' and are represented in the CoC only through the Directors

MANU/NL/0581/2023

Insolvency

The Present Appeals are filed under Section 61 of the 'Insolvency and Bankruptcy Code, 2016' (IBC), against the Impugned Orders passed by the 'Adjudicating Authority'/ 'National Company Law Tribunal, Chennai. The Learned Adjudicating Authority, has dismissed application filed by the Appellant here in, seeking for forensic audit of the 'Books of Accounts' of the Corporate Debtor, and not to approve the Resolution Plan till the disposal of the Application. Further, the Adjudicating Authority has also dismissed application, challenging the approval of the Resolution Plan.

Once the 'CIRP' is triggered, the Management of the affairs of the Corporate Debtor lies with the Interim Resolution Professional and the shareholders do not have a Right to file any claim in the 'CIRP' but can only do so in the Liquidation Process. It is seen from the provisions of the IBC that the Shareholders are excluded from 'representation', 'participation' or 'voting in the CoC' and are represented in the CoC only through the Directors.

The Applicant/ Appellant is not a Guarantor of the Corporate Debtor and is hence not affected by the approval of the Resolution Plan. Hence, when an Application under Section 30(6) of the IBC, is filed for approval of the Resolution Plan, the 'Adjudicating Authority' examines whether the Resolution Plan is compliant of Section 30(2) of the IBC. In the instant case, the 'Adjudicating Authority' found the 'plan', in adherence with Section 30(2) (e) of the IBC and has approved the same, vide Order and therefore present Tribunal, is of the considered view that these issues raised by the shareholder when the CoC has approved the Plan with requisite Majority is not provided for in the Code and hence have no bearing.

There is no 'material irregularity' in the approval of the Resolution Plan and that Section 30(2) of the IBC and Regulations 37, 38 (1) (A), and 39 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 was adhered to and there is no contravention to Section 29A or any other Provisions of the Law, for the time being in force.

The Commercial Wisdom of the CoC has been given paramount importance and that there can be judicial intervention only when there is any material irregularity or if the Plan is not in adherence to Section 30(2) of the IBC.The Hon'ble Apex Court, in the matter of 'Ebix Singapore Pvt. Ltd. &Ors. v. Committee of Creditors of Educomp Solutions Private Limited', has clearly laid down that subsequent to the approval of the Resolution Plan of the CoC and before the approval by the Adjudicating Authority, no modifications / alterations can be called for as IBC is a time bound process.

In the instant case, present Tribunal finds no infirmity in the 'Order of the Learned Adjudicating Authority' in the 'Approval of the Plan'. Further, having regard to the fact that the Resolution Plan is successfully implemented, there is no reason to interfere in the well reasoned Orders of the Adjudicating Authority. Appealsdismissed.

Tags : RESOLUTION PLAN APPROVAL LEGALITY