Ajay Gupta vs Pramod Kumar Sharma

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1385 OF 2022

AJAY GUPTA APPELLANT(S)

VERSUS

PRAMOD KUMAR SHARMA RESPONDENT(S) O R D E R

Dinesh Maheshwari, J.

Having heard learned senior counsel for the appellant at

sufficient length and having perused the material placed on

record, we do not feel persuaded to entertain this appeal under

Section 62 of Insolvency and Bankruptcy Code, 20161 by one of

the resolution applicants2 in the corporate insolvency

resolution process3 concerning the corporate debtor-B.B. Foods

Pvt. Ltd.

The appellant seeks to question the judgment and order

dated 13.01.2022 as passed by the National Company Law

Appellate Tribunal, Principal Bench, New Delhi4 in Company

Appeal (AT) Insolvency No. 35 of 2022 whereby, the Appellate

Tribunal declined to interfere in the order dated 13.12.2021

passed in I.A. No. 367 of 2021 in CP No.(IB)349/ALD/2018 by the

National Company Law Tribunal, Allahabad Bench, Allahabad5 by

1 Hereinafter also referred to as “the Code’. Signature Not Verified

2 A consortium led by the appellant (comprising of a private limited company and Digitally signed by Rajni Mukhi the appellant himself) has been the resolution applicant. Date: 2022.03.02 16:52:09 IST 3 ‘CIRP’, for short.

Reason:

4 Hereinafter also referred to as ‘the NCLAT’ or ‘the Appellate Tribunal’. 5 Hereinafter also referred to as ‘the NCLT’ or ‘the Adjudicating Authority’.

1 which, the Tribunal granted the prayer of the appellant to

amend his resolution plan dated 22.10.2021 but, at the same

time, also allowed the other resolution applicant to place any

modification in their resolution plan before the Committee of

Creditors6.

Shorn of unnecessary details, the relevant background

aspects for the present purpose are that as regards the CIRP in

question, there had been two resolution applicants, the

consortium led by appellant being one of them. It appears that

there had been deliberations in the CoC over the resolution

plans submitted by the appellant and other resolution

applicant; and in the minutes of eighth meeting dated

02.11.2021, the CoC indicated its deliberations/observations

concerning the two resolution plans in the following terms:

“At this stage, the representative of Resolution Applicant, namely, Sirius Foods Private Limited was invited to have detailed deliberations on the Resolution Plan submitted by Sirius Foods Private Limited and during the course of deliberations, defects/technical difficulty was pointed out and thereafter, representative of Resolution Applicant, namely, Sirius Foods Private Limited assured that all defects would be removed to the extent possible and to the satisfaction of the COC and Resolution Professional. No further objections/issues were raised by any other participant of the meeting and accordingly, representative of Resolution Applicant, namely, Sirius Foods Private Limited left the meeting thereafter.

At this stage, the representative of Resolution Applicant, namely, consortium of Prabhat Warehouse and Cold Storage Limited and Mr. Ajay Gupta was invited to have detailed deliberations on the Resolution Plan submitted by, consortium of Prabhat Warehouse and Cold Storage Limited & Mr. Ajay Gupta and during the course of deliberations, defects/technical difficulty were pointed out and thereafter, representative of Resolution Applicant, namely, consortium of Prabhat Warehouse

6 ‘CoC’, for short.

2 and Cold Storage Limited and Mr. Ajay Gupta assured that all defects will be removed to the extent possible and to the satisfaction of the COC and Resolution Professional and left the meeting room. No further objections/issues were raised by any other participant of the meeting and accordingly, representative of the said Resolution Applicant, left the meeting thereafter.”

After the aforesaid deliberations/observations of CoC, the

appellant sent a communication dated 18.11.2021 and annexed

therewith his affidavit dated 17.11.2021 in the so-called

‘clarification in respect of the resolution plan’. The contents

of this affidavit dated 17.11.2021 read as under: -

“AFFIDAVIT I, Ajay Gupta, a director in Prabhat Warehouse Cold Storage Private Limited and on behalf of Ajay Gupta individual, which form a consortium and being the lead member of the said consortium, do hereby affirm as follows:

1. The consortium of Prabhat Warehouse Cold Storage Private Limited and Ajay Gupta have submitted a resolution plan dated 27th September, 2021 which was further amended vide Resolution Plan dated 22nd October, 2021. In the amended resolution plan, payment schedule and the resolution of the corporate debtor has been mentioned, which we would be honouring at the earliest.

2. That while submitting the amended resolution plan, I was under certain apprehensions regarding litigations being involved in the process of resolution of the corporate debtor, but now after seeking legal advice on behalf of the consortium, state that the amount of payment to be made under the resolution plan of Rs. 16.10 crores will remain the same and is not being modified, however I’m putting forth my gesture of making the payment upfront, if the bank allows the same within 90 days of the receipt of the order of Hon’ble NCLT approving our resolution plan, as I would be taking the possession of the corporate debtor on the payment of upfront amount of resolution amount i.e. Rs.16.10 crore.

3. Our payment of upfront amount under the resolution plan is in no way going to modify the plan and I am submitting this affidavit so to clear my point.”

It appears that the appellant’s proposal for such

modification/amendment of the resolution plan was declined by

the resolution professional. Thereupon, the appellant

3 approached the Adjudicating Authority by filing I.A. No. 367 of

21 in C.P. No. (IB) 349/ALD/2018. The Adjudicating Authority

took note of the submissions made on behalf of the appellant

and passed the order dated 13.12.2021 granting the prayer of

the appellant but, at the same time, correspondingly allowed

the other resolution applicant to place any modification in

their submitted resolution plan before CoC so as to provide

level playing field. The order dated 13.12.2021 so passed by

the Adjudicating Authority reads as under:-

“I.A. No. 367/2021 Ld. Counsel for the applicant present. Ld. Counsel for the CoC present. Ld. Counsel for the RP present. Ld. Senior Counsel for the other Resolution Applicant whose plan is also being considered by the CoC present.

This is an application filed by one of the Resolution Applicant seeking to amend the final Resolution Plan dated 22.10.2021 submitted by the applicant to make the following amendments:-

(a) To uncaps the CIRP costs on conditions stated therein;

(b) To reduce term of the plan from 180 days to 90 days.

At this point of time, we are conscious of the fact that the CIRP period will come to end on 06.01.2022 and a decision on the resolution plans will have to be taken first by the CoC and, thereafter by this Adjudicating Authority.

Therefore, the ends of justice will be met if we direct the applicant herein to place the affidavits at Page Nos. 290 to 298 alongwith the covering letter addressed to the sole member of the CoC for consideration. Since we do not wish to disturb level playing field, the other resolution applicants whose plans are also being considered will also be permitted to place any modification in their submitted resolution plan before the CoC for its consideration. Such modifications shall be communicated to the CoC, no later than 48 hours from now.

Accordingly, IA No. 367/2021 is disposed of.”

Thereafter, the resolution plans were considered by the

4 CoC on 21/22.12.2021 and the plan of the other resolution

applicant was approved.

The appellant, on the other hand, attempted to question

the said order dated 13.12.2021 before the Appellate Tribunal.

The Appellate Tribunal took note of the grievance of the

appellant that its resolution plan came to be known to everyone

and hence, no opportunity should have been given to the others

to modify.

The Appellate Tribunal found no substance in those

submissions while taking the view that the Adjudicating

Authority had passed the impugned order so as to maintain the

level playing field. The Appellate Tribunal also took note of

the fact that the resolution plans had already been considered

by CoC on 21.12.2021.

We may also indicate that earlier, the said order dated

13.01.2022 as passed by the Appellate Tribunal was sought to be

questioned before us by the erstwhile director of the corporate

debtor but, we declined to accede locus to the said appellant

and hence, the said appeal [@ Dy. No. 2729 of 2022] was

dismissed, while rejecting the application seeking permission

to file appeal, by our order dated 07.02.2022.

Now, the said order dated 13.01.2022 of the Appellate

Tribunal is sought to be questioned by the unsuccessful

resolution applicant.

The learned senior counsel has painstakingly taken us

5 through the relevant contents of the Request for Resolution

Plan7 as issued by the Resolution Professional as also the

minutes of the meeting of CoC and the affidavit filed by the

appellant. Learned counsel would strenuously contend that so

far as the appellant is concerned, it had not been a case of

modification of the resolution plan because modification as

such was not even permissible under the conditions of RFRP; and

the submissions of the appellant by way of the affidavit dated

17.11.2021 had only been to meet with the requirements of the

COC, as reflected in the minutes of the meeting dated

02.11.2021 and for such a proposition, there was no

justification in granting any liberty to the other resolution

applicant to modify its resolution plan. Learned senior counsel

has also contended that appellant had been rather prejudiced in

the matter for the reason that the terms of its resolution plan

became known to the other resolution applicant when the matter

was examined by the Adjudicating Authority while passing order

dated 13.12.2021.

We do not find the submissions aforesaid making out a

case for interference. This is for the simple reason that on a

perusal of the order dated 13.12.2021, this much is clear that

certain key features/stipulations of the resolution plan were

sought to be amended by the appellant. Whether it was done in

response to the requirement of the CoC or otherwise, the fact

of the matter remains that there was going to be modification

of the relevant terms of the resolution plan of the appellant.

7 ‘RFRP’, for short.

6 When that was being permitted at the request of the appellant

himself, we cannot find fault in the Adjudicating Authority

having passed an order so as to balance the position of the

respective parties and to provide level playing field by

granting corresponding permission to the other resolution

applicant to place its modification for consideration of CoC.

So far as affidavit dated 17.11.2021 is concerned, though

the appellant stated in paragraph 3 thereof that the payment of

upfront amount under the resolution plan was in no way going to

modify the plan but, that had only been an expression of the

understanding of the appellant about the legal effect of the

propositions put forward by him, which included the

modification of the term of plan from 180 days to 90 days. Such

a proposition could not have been treated as formal or

innocuous or of no material bearing.

So far as the factor relating to divulging of the contents

of the plan is concerned, the same had been of the making of

the appellant himself. If the appellant had chosen to

divulge/disclose the terms of its resolution plan before the

Adjudicating Authority, there had not been any fault on the

part of the resolution professional or the CoC or the other

resolution applicant.

Thus, the view taken by the Adjudicating Authority as also

by the Appellate Tribunal appears to be reasonable and sound,

calling for no interference.

Before concluding on the matter, we need to indicate two

7 other relevant factors concerning this matter. One is that the

other resolution applicant, whose resolution plan has been

accepted by the Committee of Creditors, is not before us and

has not been impleaded as a party respondent in this appeal.

Hence, no order prejudicial to the interest of the successful

resolution applicant could be passed in this appeal. Secondly,

the matter would nevertheless require further processing before

the Adjudicating Authority; and for that matter, we are

informed that the approval of the Committee of Creditors has

already been placed before the Adjudicating Authority.

Taking note of all the facts and circumstances of the

case, while declining to interfere in this appeal, we leave all

the relevant aspects of the matter open for examination by the

Adjudicating Authority but, strictly in accordance with law.

Subject to the observations foregoing, this appeal stands

dismissed.

...................J .

(DINESH MAHESHWARI)

....................

J. (VIKRAM NATH) New Delhi;

February 25, 2022.

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