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The Chennai Bench of the National Company Law Appellate Tribunal (NCLAT) has ruled that after the Committee of Creditors (CoC) approves a resolution, the Adjudicating Authority cannot guide the invitation of new bids from resolution applicants due to "scope for further development." (Sreenivasa Rao Ravinuthala vs Renganayaki Agencies)
The good resolution applicant (appellant) filed an appeal against a decision by the National Company Law Tribunal (NCLT), Hyderabad, ordering the CoC to call for new proposals due to the minor differences between the two submitted plans. The NCLT, or Adjudicating Authority, had stated that the resolution sum to be paid by the resolution applicants could be improved further. It was pointed out that in this case, the NCLT had not made any findings of the approved plan's breach of Section 30(2) IBC, and was therefore legally bound to sanction the Appellant's scheme. The Adjudicating Authority, according to the Settlement Professional, entirely overlooked the fact that the other failed resolution applicants had only received 55.58 percent of the overall voting share of the financial creditors. Except for the restricted scope given under Sections 30 and 31 IBC, the Supreme Court held that the commercial wisdom of CoC should not be interfered with.
The NCLAT concluded that the NCLT order was "clearly unsustainable" in light of this. "In conclusion, the immediate Comp App (AT) (CH) (INS) No. 23/2021 is approved. There are no fees. The ‘Adjudicating Authority' (National Company Law Tribunal, Bench-I, Hyderabad) is expected to approve the ‘Resolution Plan' approved by the “Committee of Creditors” with a unanimous vote in favor of ‘KALS.' "The NCLAT issued an order to "form a group." The appellant was represented by R Vidhya Shankar, an attorney. Advocate Aneesh, V. represented Resolution Professional.
The NCLAT found the Supreme Court's decision in Kalpraj Dharamshi & Anr. V. Kotak Investment Advisors Ltd. & Anr. to reach its decision.
Tags : Resolution Professional , Resolution Plan , NCLT
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