Arun Mittal & Anr vs Mr. Vichitra Narayan Pathak Erstwhile ...

Arun Mittal & Anr. ....Appellants Vs.

Narmada Cereals Pvt. Ltd. & Ors. ...Respondents For Appellants: Mr. Rajesh Bohra, Ms. Sangeeta Bohra, Advocates. For Respondents: Mr. Abhishek Naik, Advocate for R1 & 2 Mr. Iswar Mohapatra, Advocate for R3.

ORDER

(Through Virtual Mode)

18.02.2022: Heard Shri Rajesh Bohra, Learned Counsel for the

Appellant, Shri Abhishek Naik, Learned Counsel for Respondent Nos.1 and 2

and Shri Iswar Mohapatra, Learned Counsel for Respondent No.3.

2. This Appeal has been filed against the judgment and order of the

Adjudicating Authority (National Company Law Tribunal), New Delhi Bench,

Court III dated 04.01.2022 by which the Adjudicating Authority has directed

for liquidation of the Corporate Debtor- 'M/s. Narmada Cereals Pvt. Ltd.'.

Aggrieved by the said order, this Appeal has been filed. Appellants, who has

filed the Appeal are Promoters of the Corporate Debtor, filed Resolution Plan

and there are other three Resolution Plans also which have been considered

by the Committee of Creditors (CoC).

2

3. Learned Counsel for the Appellants submits that the Appellants'

Resolution Plan was Rs. 37 Crore which was higher than the liquidation

value and in the 11th CoC meeting held on 17th, 18th and 20th September,

2021, Appellants' plan was decided to be put for consideration. He submits

that the sole CoC member when found that plan is agreeable, there was no

question of rejecting the plan by e-voting. He submits that Appellant did not

get any opportunity to further improve their plan and they were under

impression that their plan is acceptable. He further submits that other three

proposals which were earlier not found in favour and were rejected were also

put to vote which vitiates the process.

4. Learned Counsel appearing for Respondent Nos. 1 and 2 submits that

in the 11th CoC meeting, the only observation which was recorded in the

proceeding is that the plan was found to be worth consideration and there

was no approval of the plan in the said meeting and decision was ultimately

taken to obtain a decision by e-voting. He submits that approval of the CoC

was also taken by taking a final decision and in the final decision e-voting

plan was rejected with 100% voting of the Financial Creditors. He submits

that rejection of other three plans does not cause any prejudice to the

Appellants. He submits that present is a proceeding which was initiated by

the Corporate Debtor under Section 10. On a pointed query that whether

CoC is ready to give an opportunity to Appellant to enhance its plan, the

Learned Counsel submits that CoC is not agreeable to give any further

opportunity and decision has already been taken.

Comp. App. (AT) (Ins.) No. 161 of 2022 3

5. We have considered the submissions of the Counsel for the parties and

perused the record.

6. It is well settled that CoC has power to take a decision either to accept

a Resolution Plan or reject a plan. The commercial wisdom of the CoC is not

subject matter of judicial review except on the limited ground as provided

under Sections 30 and 61. In the present case, although 11th CoC meeting

indicates that plan was considered and it was decided to put it for

consideration but we do not agree with the submission of the counsel for the

Appellants that the plan found approval of the CoC. In the 11th CoC meeting

ultimate decision was to obtain a decision by e-voting and in the e-voting, it

was held that the plan was rejected with 100% votes. We are of the view that

in the facts of the present case, it cannot be held that CoC has approved the

plan.

7. As far as the submissions of the counsel for the Appellants that other

three plans were put to vote which were already not approved, we say that

consideration and rejection of the said plans once again may at best be

redundant and in no way prejudice the case of the Appellants.

8. Looking to the fact that Appellants are Promoters and even the plan

which although was considered but not found in favour, we are of the view,

in the ends of justice, we reserve liberty to the Appellants to participate in

the liquidation process when the liquidation starts as on going concern of the

Appellants. We say no more than this with regard to participation and

Comp. App. (AT) (Ins.) No. 161 of 2022 4

consideration of the Appellants' bid in the liquidation as and when it takes

place. Subject to these observations, the Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[V.P. Singh] Member (Technical) Anjali/nn

Comp. App. (AT) (Ins.) No. 161 of 2022