Bank Of India And Anr vs Royal Splendour Developers Pvt. Ltd. ...
- CitationCompany Appeal (AT) (Ins) No.281 of 2020
Ratio decidendi
The rule this decision rests on
The Appellate Tribunal's jurisdiction to interfere with a commercial decision of the Committee of Creditors, taken by the requisite majority to approve a resolution plan, is limited; it does not extend to ordering the inclusion in an approved plan of speculative provisions that were never placed before the Committee of Creditors during its deliberations. A dissenting creditor's objection to an approved resolution plan, which was not raised as a proposal at the meeting of the Committee of Creditors, cannot be entertained at the appellate stage as a ground to modify the plan.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI Company Appeal (AT) (Ins) No.281 of 2020 IN THE MATTER OF: Bank of India ...Appellant Versus Royal Splendour Developers Pvt. Ltd. ...Respondents Through the Resolution Professional Ms. Kavitha Surana & Ors.
For Appellant: Counsel appeared but did not mark appearance For Respondents: None ORDER
17.02.2020 Heard Counsel for the Appellant. It is stated that the
Committee of Creditors (COC) in the Corporate Insolvency Resolution Process
(CIRP) against Royal Splendour Developers Pvt. Ltd. has approved the
Resolution Plan which has been approved by the Adjudicating Authority
(National Company Law Tribunal, Division Bench, Chennai). The plan was
approved by majority of more than 70.93%. The learned Counsel states that
the Appellant Bank was in minority having 24.97% voting share and at the
time of voting on the Resolution Plan, it had voted against the Resolution Plan,
copy of which is at Annexure - E (Page 133) and sought liquidation in place
of resolution.
The Counsel states that the Appellant is ready to go with the Plan but
the objection of the Appellant is that the Resolution Plan does not provide and
is silent as to what is to be done with securities held by the bank, in case the
Successful Resolution Applicant (SRA) fails to complete the project. It is stated
that the Plan should have this modification.
On being asked, the learned Counsel for the Appellant does not show
us that any such proposal was made at the time of meeting of COC. Apart -2-
from this, keeping in view Judgement of the Hon'ble Supreme Court of India
in the matter of "Committee of Creditors of Essar Steel India Limited Vs.
Satish Kumar Gupta & Ors." (Civil Appeal No.8766-67 of 2019), this
Tribunal has limited jurisdiction to interfere in the commercial decision taken
by the Committee of Creditors with requisite majority. Hon'ble Supreme Court
has observed that there is no residual jurisdiction not to approve a resolution
plan on the ground that it is unfair or unjust to a class of creditors, so long
as the interest of each class has been looked into and taken care of. (See Para
- 58 of the Judgement.) We do not think that Appellant can ask us to get
included speculative provision so as what to do if SRA fails to complete the
project.
Keeping in view the limited scope, we do not find that the present Appeal
makes out a case to interfere. There is no substance in the Appeal.
Admission is declined. The Appeal is accordingly disposed.
[Justice A.I.S. Cheema] Member (Judicial)
(Justice A.B. Singh) Member (Judicial)
[Kanthi Narahari] Member (Technical)
/rs/md
Company Appeal (AT) (Ins) No.281 of 2020
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