Bank Of Maharashtra Stressed Asset ... vs Ms. Vandana Garg (Erstwhile Resolution ...

IN THE MATTER OF: Bank of Maharashtra Stressed Asset Management Branch Janmangal, 45/47, 6th Floor, Mumbai Samachar Marg, Mumbai-400001 ...Appellant

Versus

1. Ms. Vandana Garg (Erstwhile Resolution Professional/ Monitoring Committee Chairperson) of Jyoti Structures Limited) Residing at: C-3803, Oberoi Esquire, Oberoi Garden City, Goregaon East, Mumbai. ...Respondent No.1

2. Mr. Sharad Sanghi (Successful Resolution Applicant For Jyoti Structures Limited) Residing at: 23, Seagull Carmichael Road Mumbai-400 026 ...Respondent No.2

3. Monitoring Committee of Jyoti Structures Limited (represented by RP being Chairperson and RA, SBI, ICICI and IDBI) Having address at: C-3803, Oberoi Esquire, Oberoi Garden City, Goregaon East, Mumbai ...Respondent No.3

4. Jyoti Structures Limited Valecha Chambers, 6th Floor, New Link Road, Andheri (West,) Mumbai - 400053 ...Respondent No.4

5. State Bank of India Through the authorised representative Mr. Manish Patel, Corporate Centre, 21 Floor, Maker Tower 'E', Cuffe Parade, Mumbai - 400005 ...Respondent No.5

6. Bank of India Andheri Large Corporate Branch, Through the Deputy General Manager, M.D.I. Building, First Floor, 28, S.V. Road, Andheri (W), Mumbai-400 058 ...Respondent No.6

7. Indian Bank Through the Assistant General Manager, Sir P.M. Road, Fort, Mumbai-400001. ...Respondent No.7

8. Union Bank of India Through the Deputy General Manager, Mumbai Main Office, Union Bank Bhavan, Nariman Point, Mumbai-400 021. ...Respondent No.8

9. IDBI Bank Ltd. Through the General Manager, 49, Maker Arcade, 7th Floor, NMG Dept., Cuffe Parade, Mumbai-400005

Also at: Plot No. C 7, G Block, BKC, Opposite NSE Building, Bandra (E), Mumbai - 400051 ...Respondent No.9

10. ICICI Bank Ltd. Through the authorised person Mr. Krishnakumar R, 4, Laxmi Towers Kurl Complex, B Wing, Bandra Kurla Complex Road, G Block BKC, Bandra East, Mumbai-400051 ...Respondent No.10

11. Bank of Baroda Stressed Assets Management Branch (Formerly Dena Bank), Through the Deputy General Manager, 1st Floor, 17/B, Mumbai Samachar Marg, Horniman Circle, Mumbai 400023. ...Respondent No.11

12. Canara Bank Through the Branch Manager, Maker Tower-E, 20th Floor, Cuffe Parade, Mumbai. ...Respondent No.12

13. Phoenix ARC Pvt. Ltd. (South Indian Bank)

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 2 of 29 Through the Assistant Vice President, 5th Floor Dani Corporate Park, 158 CST Road, Kalina Santacruz (E), Mumbai-400098 ...Respondent No.13

14. Standard Chartered Bank Through the authorised person Mr. Srinivasan, Crescencenzo, 6th Floor, C-38/39, G-Block, Behind MCA Club, BKC, Mumbai-400051. ...Respondent No.14 15. Tata Capital Financial Services Ltd. Through the authorised person Mr. Ravi Kabra, RM-SAMG, One Forbes, Dr. VB Gandhi Marg, Fort, Mumbai -400001 ...Respondent No.15 16. Mahindra & Mahindra Financial Service Ltd. Through the authorised person Mr. Sumanth Parasram, Sadhana House, 2nd Floor, 570, P.B. Marg, Worli, Mumbai-400018 ...Respondent No.16 17. Assets Care and Reconstruction Enterprise Ltd, Through the authorized signatory, Having registered office at 2nd Floor, Mohandev Building, 13, Tolstoy Marg, New Delhi-110001 ...Respondent No.17 18. IDBI Trusteeship Services Limited Through the authorized signatory, Ground Floor, Asian Building, 17, R Kamani RD, Ballard Estate, Fort, Mumbai-400001. ...Respondent No.18 19. AION Direct Singapore PTE Ltd. Unit G-1/G-19, Grand Hyatt Plaza Santacruz East, Mumbai. ...Respondent No.19 20. Apollo Asia Private Credit Master Fund Pte. Ltd., Ground floor, A-83, Pocket D, Okhla Phase II, Okhla Industrial Estate, New Delhi, Delhi 110020 ...Respondent No.20 Present: For Appellant : Mr. Ravi Raghunath, Ms. Rathina Maravarnani, Mr. Namanjeet Singh Bhatia, Advocates

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 3 of 29 For Respondent : Mr. Malak Bhatt, Ms Samridhi, Advocates for R2. Mr. Dhruv Dewan, Advocate for R4. Mr. Rajeev Kumar Panda, Advocate for R1. Mr. Siddharth Sangal, Ms. Richa Mishra, Advocates for R5. With Company Appeal (AT) (Insolvency) No. 345 of 2022

IN THE MATTER OF: Central Bank of India Stressed Asset Management Branch II Chandramukhi, Ground Floor, Nariman Point, Mumbai - 400021 ...Appellant Versus 1. Ms. Vandana Garg (Erstwhile Resolution Professional/ Monitoring Committee Chairperson) of Jyoti Structures Limited) Residing at: C-3803, Oberoi Esquire, Oberoi Garden City, Goregaon East, Mumbai. ...Respondent No.1

2. Mr. Sharad Sanghi (Successful Resolution Applicant For Jyoti Structures Limited) Residing at: 23, Seagull Carmichael Road Mumbai-400 026 ...Respondent No.2 3. Monitoring Committee of Jyoti Structures Limited (represented by RP being Chairperson and RA, SBI, ICICI and IDBI) Having address at: C-3803, Oberoi Esquire, Oberoi Garden City, Goregaon East, Mumbai ...Respondent No.3 4. Jyoti Structures Limited Valecha Chambers, 6th Floor, New Link Road, Andheri (West,) Mumbai - 400053 ...Respondent No.4 5. State Bank of India Through the authorised representative Mr. Manish Patel, Corporate Centre, 21 Floor, Maker Tower 'E', Cuffe Parade, Mumbai - 400005 ...Respondent No.5

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 4 of 29 6. Bank of India Andheri Large Corporate Branch, Through the Deputy General Manager, M.D.I. Building, First Floor, 28, S.V. Road, Andheri (W), Mumbai-400 058 ...Respondent No.6

7. Indian Bank Through the Assistant General Manager, Sir P.M. Road, Fort, Mumbai-400001. ...Respondent No.7

8. Union Bank of India Through the Deputy General Manager, Mumbai Main Office, Union Bank Bhavan, Nariman Point, Mumbai-400 021. ...Respondent No.8

9. IDBI Bank Ltd. Through the General Manager, 49, Maker Arcade, 7th Floor, NMG Dept., Cuffe Parade, Mumbai-400005

Also at: Plot No. C 7, G Block, BKC, Opposite NSE Building, Bandra (E), Mumbai - 400051 ...Respondent No.9

10. ICICI Bank Ltd. Through the authorised person Mr. Krishnakumar R, 4, Laxmi Towers Kurl Complex, B Wing, Bandra Kurla Complex Road, G Block BKC, Bandra East, Mumbai-400051 ...Respondent No.10

11. Bank of Baroda Stressed Assets Management Branch (Formerly Dena Bank), Through the Deputy General Manager, 1st Floor, 17/B, Mumbai Samachar Marg, Horniman Circle, Mumbai 400023. ...Respondent No.11

12. Canara Bank Through the Branch Manager, Maker Tower-E, 20th Floor, Cuffe Parade, Mumbai. ...Respondent No.12 13. Phoenix ARC Pvt. Ltd. (South Indian Bank) Through the Assistant Vice President, 5th Floor Dani Corporate Park, 158 CST Road, Kalina Santacruz (E), Mumbai-400098 ...Respondent No.13

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 5 of 29 14. Standard Chartered Bank Through the authorised person Mr. Srinivasan, Crescencenzo, 6th Floor, C-38/39, G-Block, Behind MCA Club, BKC, Mumbai-400051. ...Respondent No.14 15. Tata Capital Financial Services Ltd. Through the authorised person Mr. Ravi Kabra, RM-SAMG, One Forbes, Dr. VB Gandhi Marg, Fort, Mumbai -400001 ...Respondent No.15 16. Mahindra & Mahindra Financial Service Ltd. Through the authorised person Mr. Sumanth Parasram, Sadhana House, 2nd Floor, 570, P.B. Marg, Worli, Mumbai-400018 ...Respondent No.16 17. Assets Care and Reconstruction Enterprise Ltd, Through the authorized signatory, Having registered office at 2nd Floor, Mohandev Building, 13, Tolstoy Marg, New Delhi-110001 ...Respondent No.17 18. IDBI Trusteeship Services Limited Through the authorized signatory, Ground Floor, Asian Building, 17, R Kamani RD, Ballard Estate, Fort, Mumbai-400001. ...Respondent No.18 19. AION Direct Singapore PTE Ltd. Unit G-1/G-19, Grand Hyatt Plaza Santacruz East, Mumbai. ...Respondent No.19 20. Apollo Asia Private Credit Master Fund Pte. Ltd., Ground floor, A-83, Pocket D, Okhla Phase II, Okhla Industrial Estate, New Delhi, Delhi 110020 ...Respondent No.20 Present: For Appellant : Mr. Ravi Raghunath, Ms. Rathina Maravarnani, Mr. Namanjeet Singh Bhatia, Advocates. For Respondent : Mr Malak Bhatt, Ms Samridhi, Advocates for R2. Mr. Dhruv Dewan, Advocate for R4. Mr. Rajeev Kumar Panda, Advocate for R1. Mr. Siddharth Sangal, Ms Richa Mishra, Advocates for R5.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 6 of 29 JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)]

The present Appeal is filed under Section 61 of the Insolvency and

Bankruptcy Code, 2016, (the "Code") against the order dated 23.12.2021

("Impugned Order") passed by the Hon'ble National Company Law Tribunal,

Court-I, Mumbai Bench ("Ld. Adjudicating Authority, Mumbai") in IA 2028 of

2021 in CP No. 1137/MB/2017.

2. The brief facts relevant to decide the case are as under:-

a) On 04.07.2017 C.P. No.1137/MB/2017 was filed by State Bank of

India against Jyoti Structures Ltd., and the same was admitted by Ld.

Adjudicating Authority, Mumbai

b) On 26.03.2018 to 27.03.2018 the e-voting on the Resolution Plan

by the COC was held:

o 62.66% of CoC members voted in favour of Resolution Plan;

o 23.12% voted against the Resolution Plan, and o 14.21% of CoC members abstained from voting.

The Bank of Maharashtra abstained from voting for the Resolution

Plan, while Central Bank of India cast a dissenting vote. IDBI

Trusteeship Services (0.04%), Indian Bank (6.31%) and Standard

Chartered Bank (3.31%) changed their voting from Dissenting to

Assenting.

c) On 06.04.2018 Bank of India (9.11%) assented and hence Plan got

the assenting votes of 81.31% of voting share.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 7 of 29

d) On 31.07.2018 Ld. Adjudicating Authority, Mumbai refused to

approve the Resolution Plan on the ground that CIRP period had

expired and that voting cannot be changed.

e) On 19.03.2019 the above order was set aside by this Appellate

Tribunal and remitted back the matter, after excluding certain period,

and holding that CoC can extend time for voting and permit change of

votes as there is no bar under the Code.

f) On 25.03.2019 Respondent No.2 submitted an amended resolution

plan.

g) On 27.03.2019 Adjudicating Authority approved the amended

resolution plan.

h) On 22.02.2021, Adjudicating Authority passed an order dated

22.02.2021 observing that Definitive Agreement as per the Resolution

Plan had not been finalized.

i) On 09.09.2021, the Appellant filed IA 2028 of 2021 before the

Adjudicating Authority, Mumbai inter alia praying for equal treatment

of all Secured Financial Creditors for payment of Plan value on the

ground that their exists glaring inequality between Assenting and

Dissenting / Abstaining Financial Creditors and definitive Agreements

have not been finalized / executed.

j) On 28.10.2021, Adjudicating Authority issued notice in IA 2028 of

2021

k) Definitive agreement signed on 15.09.2021.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 8 of 29

l) On 23.12.2021, Adjudicating Authority dismissed IA 2028 of 2021 by

the present Impugned Order.

3. The Appellant - Bank of Maharashtra, in CA(AT)(Ins.) No. 344 of 2022

is a Secured Financial Creditor of M/s. Jyoti Structures Limited ("Corporate

Debtor") and had abstained from voting on the resolution plan. The Appellant

in Company Appeal (AT)(Ins.) No. 345 of 2022 - Central Bank of India, is

another Secured Financial Creditor, who had cast a dissenting vote against

the Resolution Plan.

4. The questions which arise for consideration in the present Appeal are:

(i) Whether amongst the same class of creditors (i.e., Secured Financial

Creditors) there can be discrimination in payment of the resolution

value only on the basis of the vote cast by them?

(ii) Whether the Adjudicating Authority failed to appreciate that Section

30(2)(b)(ii) of the Code only provides for the minimum amount payable,

and that the said provision does not permit inequitable, unfair and

discriminatory treatment between Assenting Secured Financial

Creditors and Dissenting / Abstaining Secured Financial Creditors

when it comes to payment/distribution of the resolution amount?

(iii) Whether the Adjudicating Authority, Mumbai erred in dismissing IA

2028 of 2021 in CP No. 1137/MB/2017 filed by the Appellant by relying

on the decision in Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss

Asset Reconstruction Co. Ltd., (2021) 9 SCC 657?

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 9 of 29

5. The admitted claim of Bank of Maharashtra is to the extent of

Rs.184,55,84,031/-, out of which the liquidation value proposed to be paid

proportionate to their exposure is of Rs.27,51,67,000/-. The admitted claim

of Central Bank of India is to the extent of Rs.144,10,31,047/- out of which

the liquidation value proposed to be paid proportionate to their exposure is of

Rs.21,48,51,000/-.

6. Appellants claim that the inequitable, unfair and discriminatory

treatment in payment of resolution value is evident from the following:

S. Particulars Amount Amount Percentage Haircut No. Admitted Paid under Plan to the Admitted claim 1 Assenting 50,45,61,52,427 36,39,83,24,001 73% 27% creditors

2. Dissenting/ 13,59,92,28,646 202,75,78,000 14% 86% Abstaining creditors 3 Operational 4,80,53,00,000 115,00,00,000 23.95% 76% creditors (24%)

7. The payment which the appellant would have been entitled to, if there

was fair and equitable treatment, is as under: -

Bank of Liquidation amount Rs 27,51,67,000 Maharashtra If resolution amount is Rs 105,86,27,000 + offered at par with Rs 78,34,60,000 other Assenting Secured Financial Creditors Central Bank Liquidation amount Rs 21,48,51,000 of If resolution amount is Rs 96,45,00,000 + India offered at par with Rs 74,96,49,000 other Assenting Secured Financial Creditors

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 10 of 29

8. Appellant claims that the Impugned Order merely records the

contentions of the Appellant, extracts the said provision and paraphrases the

said provision of the Code and thus claimed to be cryptic order, which is liable

to be set aside. [CCT v. Shukla & Bros., (2010) 4 SCC 785 (para 23)].

9. Appellant claims that Section 30(2)(b)(ii)1 of the Code provides for the

minimum payment to be made to a dissenting/abstaining creditor, and that

provision does not permit inequitable, unfair and discriminatory treatment

between Assenting Secured Financial Creditors and Abstaining / Dissenting

Secured Financial Creditors when it comes to payment/distribution of the

resolution amount. Further, the Explanation I to 30(2)(b)(ii) of the Code

mandates that the distribution shall be fair and equitable. Appellant

advances the argument that merely because one Bank (i.e., Bank of

Maharashtra) had abstained from voting and another bank (i.e., Central Bank

of India) had cast a dissenting vote, they cannot be paid only as per the

liquidation value, and not on par with the other Secured Financial Creditors.

If discrimination in payment of resolution value between the same class of

creditors (i.e., Secured Financial Creditors) on the basis of their voting is

permitted, then it will have far reaching consequences in as much as a person

who abstains or dissents is punished for such vote. This will have a chilling

1 Section 30(2)(b)(ii) -

(ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor.

Explanation 1.- For the removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 11 of 29 effect and not encourage a participative CoC. Furthermore, that under the

fear of being given only liquidation value, most of the members of the CoC will

be forced to vote in favour of a plan, which may not really be in the best

interests of all stakeholders and achieve the object of the Code of

maximisation of the assets and revival of the Corporate Debtor.

10. Appellant places its reliance on Essar Steel India Ltd. Committee of

Creditors v. Satish Kumar Gupta, (2020) 8 SCC 531 (para 90), wherein the

Hon'ble Supreme Court has observed that equitable treatment is to be

accorded to each creditor depending upon the class to which it belongs:

secured or unsecured, financial or operational. Appellant has also relied on

Central Bank of India Vs Resolution Professional of Sirpur Paper Mills

Ltd and Others 2018 SCC OnLine NCLAT 1034. Appellant has also relied

on RBL Bank Ltd Vs Sical Logistics Ltd, Company Appeal (AT) (CH) (Ins)

No.36/2024, which is similar to the above cited judgment.

11. Appellant also contends that the decision in Ghanashyam Mishra &

Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC

657 has no application to the present case in as much as the Appellant is not

seeking to make any claims which are not part of the resolution plan, but is

only seeking for proper distribution of the resolution amount in a non-

discriminatory manner. The Appellant claims not to be seeking to setting

aside of the Resolution Plan, but only seeking to establish that the

Adjudicating Authority has failed to discharge the statutory duty enjoined

under the Code.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 12 of 29

12. Appellant claims that a resolution plan, which is contrary to the Code

cannot be approved by the Adjudicating Authority [State Tax Officer (1) v.

Rainbow Papers Limited, 2022 SCC OnLine SC 1162 (para 15, 41, 43, 45,

47-48, 59)]. It is claimed that in the event that the discrimination in payment

is set aside, then the same would not in any manner affect the basic structure

of the Resolution Plan as the tenure of the payment (12 years), the Resolution

Plan Value (Rs. 3965.06 Crores) and other pre-conditions for the benefit of

Resolution Applicant would remain unaltered and only the payment to the

Financial Creditors would get readjusted as per their exposure towards

Corporate Debtor.

13. Resolution Professional/now member of the Monitoring Committee of

the Corporate Debtor (Jyoti Structures Limited) has raised the question of

maintainability of the present appeal, which to us is the most important issue.

RP brings to our notice that in the same CIRP this Appellate Tribunal in

another IA had already adjudicated and therefore the present Appeal attracts

res-judicata. It was brought to our notice, that in the same CIRP, the

resolution applicant Sharad Sanghi had submitted a resolution plan which

was approved, basis negotiation with the CoC with 81.31% of voting shares.

However, NCLT vide order dated 31.07.2018 rejected the resolution plan,

which was approved by the CoC and ordered the RP to file for liquidation for

Corporate Debtor. The Resolution Applicant Sharad Sanghi had come before

this Appellate Tribunal under Section 61 and on March 19, 2019 and this

Appellate Tribunal had remitted the mater back to NCLT to approve the

resolution plan with one modification. The relevant portion of the said order

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 13 of 29 dated March 19, 2019 passed by this Appellate Tribunal has been reproduced

below:

"24. In view of the aforesaid findings and as we have already held that the Resolution Process' took place within 270 days and the "Committee of Creditors' had the jurisdiction to change its opinion in favour of the "Resolution Plan to make it a success and Regulation 26(2) being directory which also stands deleted, we set aside the impugned order and hold that the "Resolution Plan being in conformity with Section 30(2) warranted approval by the Adjudicating Authority.

25. However, we make it clear that to make the "Resolution Process successful, though it is open to the 'Committee of Creditors to change its opinion by assenting in favor of one or other plan, we further hold that the Committee of Creditors' once voted in favour of the Resolution Plan cannot change its views.

26. In the result, the case is remitted to the Adjudicating Authority, Mumbai Bench, Mumbai to approve the plan in terms of Section 31 of the Insolvency and Bankruptcy Code, 2016 with modification, i.e that the plan is to be implemented within the period of 12 years as offered by the Successful Resolution Applicant. The appropriate order be passed on an early date preferably within two weeks from the date of the production of the copy of this order"

(Emphasis supplied)

14. Respondent No.2, which is the Successful Resolution Applicant, also

canvases arguments similar to the arguments presented by the RP that the

Appellant is effectively seeking to challenge the resolution plan at this belated

stage, after the resolution plan has already attained finality, and therefore

questions the maintainability of the Appeal. SRA brings to our notice that

Adjudicating Authority vide order dated 27.03.2019 had approved the

resolution plan. No appeals were filed against the resolution plan approval

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 14 of 29 order within the statutory period prescribed under the Code and therefore the

resolution plan approved attained finality. It also brings to our notice that,

being a Financial Creditor of the company, the appellant was at all times

aware of all the developments with respect to the resolution plan from the

date of the plan approval order till its implementation on 09.11.2021. Despite

this, Appellant had chosen to file an application in September 2021, about

30 months after the approval of the resolution plan. It brings to our notice

that there is an unjustifiable delay on the part of the Appellant in challenging

the provisions of the resolution plan. The Respondent No. 2/SRA also brings

to our notice that the plan has been implemented as on November, 2021 and

the business of the company has already been taken over by the new

management of the company. Furthermore, the pay outs as envisaged under

the resolution plan are already under process and disrupting them will

militate against the very logic of the due process envisaged under the code.

15. The Respondent No.2/SRA also brings to our notice that once the

resolution plan has been approved, it is binding on all the stakeholders. The

resolution plan is claimed to be unfair and inequitable to dissenting /

abstaining Financial Creditors as the quantum of payments provided to the

Appellant is less than the payments provided to the assenting secured

Financial Creditors under the resolution plan and basis this discriminatory

treatment the Appellant has sought for a modification of the resolution plan.

SRA - Respondent No.2 brings to our notice that the plan provides for the

payments to dissenting Financial Creditors as per Section 30(2) of the Code,

which provides for the payment of debts of Financial Creditors, who do not

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 15 of 29 vote in favour of the resolution plan, in such manner as may be specified by

the Board, which shall not be less than the amount to be paid to such

creditors in accordance with sub-section (1) of Section 53 in the event of a

liquidation of the Corporate Debtor. The above has also been accepted by the

Adjudicating Authority in the impugned order. Respondent No.2/SRA brings

to our notice that the provision relating to payment to dissenting Financial

Creditors as is being claimed was not existing in Section 30(2) of the Code at

the time of the approval of the resolution plan by the CoC.

16. Furthermore, Regulation 38 of the CIRP Regulations, contained the

following as mandatory contents of the resolution plan:

"...

(c) liquidation value due to dissenting Financial Creditors and provide that such payment is made before any recoveries are made by the Financial Creditors who were voted in favour of the resolution plan."

17. SRA - Respondent No.2 has also relied on the judgment of Jaypee

Kensington Boulevard Apartments Welfare Association vs. NBCC (India)

Ltd., (2022) 1 SCC 401, wherein it was held that the amount prescribed

under the code and CIRP Regulations was the amount payable to dissenting

Financial Creditors, which we will deal in hereinafter. Furthermore, Appellant

relies on the judgement of Appellate Tribunal in Facor Alloys Limited and

Anr. Vs. Bhuvan Madan, 2020 SCC OnLine NCLAT 789 wherein it was

noted that the only requirement for a resolution plan under the Code was to

provide for the prescribed payment to dissenting Financial Creditors.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 16 of 29

18. Respondent No. 4/Corporate Debtor has contended that the Appellant

is seeking indirectly to challenge the resolution plan by challenging the

impugned application and indirectly extend the period of limitation to

challenge the resolution plan. Respondent No.4 relies on the decision of

Hon'ble Supreme Court in National Spot Exchange Vs. Anil Kohli, 2021

SCC Online SC 716 wherein the Hon'ble Supreme Court has held that:

"...

19. In view of the afore-stated settled proposition of law and even considering the fact that even the certified copy of the order passed by the adjudicating authority was applied beyond the period of 30 days and as observed hereinabove there was a delay of 44 days in preferring the appeal which was beyond the period of 15 days which maximum could have been condoned and in view of specific statutory provision contained in Section 61(2) of the IB Code, it cannot be said that the NCLAT has committed any error in dismissing the appeal on the ground of limitation by observing that it has no jurisdiction and/or power to condone the delay exceeding 15 days."

[Emphasis supplied]

19. Respondent No. 4/Corporate Debtor also contends that the resolution

plan once approved is binding on all the stakeholders. It brings to our notice

the same judgments which have been relied upon by the Respondent No. 2.

Respondent No. 4 also brings to notice the relevant provisions for payments

to such creditors who do not vote in favour or abstain from voting the

resolution plan which are follows:

"Those financial creditors of the Company who qualify as "dissenting financial creditors" (as defined under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016, as amended from time to time) ("Dissenting Financial Creditors") shall be paid an amount as

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 17 of 29 would have been paid to them in respect of their financial debt in case of liquidation of the Company ("Dissenting Financial Creditor Dues"), As set out in the provisions of the Insolvency and Bankruptcy Code, 2016 and the regulations framed thereunder, the Dissenting Financial Creditor Dues shall be paid from the cash flows of the Company including from the equity infusion as per the terms of this Final Resolution Plan and arising from the business operations of the Company, before any recoveries are made by the Financial Creditors who voted in favor of the Final Resolution Plan."

20. Respondent No. 4/Corporate Debtor has also relied on the judgment of

Hon'ble Supreme Court in Essar Steel India Ltd. Committee of Creditors

v. Satish Kumar Gupta, (2020) 8 SCC 531 wherein it has held that:

"...

129. As has been held in this judgment, it is clear that Explanation 1 has only been inserted in order that the Adjudicating Authority and the Appellate Tribunal cannot enter into the merits of a business decision of the requisite majority of the Committee of Creditors. As has also been held in this judgment, there is no residual equity jurisdiction in the Adjudicating Authority or the Appellate Tribunal to interfere in the merits of a business decision taken by the requisite majority of the Committee of Creditors, provided that it is otherwise in conformity with the provisions of the Code and the Regulations, as has been laid down by this judgment."

[Emphasis supplied]

And claims that there cannot be any interference with the commercial wisdom

of the CoC provided the payments are made to dissenting Financial Creditors

in accordance with the provisions of the Code. Such minimum payment as

prescribed under the Code has been stated to be fair and equitable, and

beyond the minimum payment any amount is to be paid or not is left to the

commercial wisdom of the CoC.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 18 of 29

21. Respondent No.4 have also relied upon the judgment of Ghanashyam

Mishra & Sons Private Limited v. Edelweiss Asset Reconstruction

Company Limited, Civil Appeal No. 8919 of 2019 even though the

Appellant claims the Ghanashyam Mishra (supra) is not applicable in this

case.

22. Respondent No. 5 - State Bank of India, which was impleaded, as a

party brings to our notice that the abstaining / dissenting Financial Creditors

with a voting share of 4.41% are seeking pay outs under the resolution plan

on par with the assenting Financial Creditors (which were having 81.31%

voting share). In their Appeal before NCLT, Respondent No.4 - SBI was not

made a party. However, they have been impleaded before NCLAT. Respondent

No. 5 - State Bank of India brings to our notice that out of 34 Financial

Creditors around 20 Financial Creditors (81.31% voting share) voted in favour

of the resolution plan, yet the Appellants with 4.41% voting share have moved

to implead, only SBI as a party when the prayer, they are seeking in these

appeals affects the rights and financials of all the Financial Creditors.

Therefore, others are also relevant parties. Respondent No. 5 also bring to our

notice that the terms and provisions of the resolution plan are in accordance

with the provisions of Code. Since the resolution plan has been approved by

the CoC and Adjudicating Authority by its order dated 27.03.2019 and this

order has attained finality, therefore, the contents and provisions of the

resolution plan are binding on all the parties or stakeholders including the

Appellants herein. Thus, the present appeal cannot be sustained in law.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 19 of 29 Appraisal

23. We observe that the Appellant had filed an IA No. 2028/2021 in CP (IB)

No. 1137/MB/2017 on 09.09.2021 before the Adjudicating Authority with the

following prayers:

"a) That the discrimination in payment under the Resolution Plan on the basis of the Assenting and Dissenting / Abstaining Financial Creditor be modified to the extent that all Secured Financial Creditors (SFCs) inter alia Applicant be treated equally for payment of Plan value subject to their individual exposure with the same terms as that of Assenting Financial Creditors.

b) That the Monitoring Agency (MA) be given a direction to consult with all Secured Financial Creditors (SFCs) forming part of erstwhile COC by convening a Joint meeting and file a report within a period of three weeks with regard to their stand for treatment of all Secured Financial Creditors at par without discriminating their payment under the Resolution Plan on the basis of Assenting / Financial Creditors.

c) That till the said report is filed by MA the implementation of Resolution Plan (exclusive of compliances part of pre-condition) and the enforcement of Financing documents be stayed for a period of three weeks.

d) That in the event that definitive documents have already been executed between the parties, appropriate direction be issued to the signatories to execute an Addendum Agreement incorporating with regard to the sharing of plan value ordered to be modified by this Hon'ble Tribunal.

e) That it be ordered that the share of Bank of Maharashtra i.e. Rs.78.34 Crores out of balance amount of Rs.579.72 Crores for which this Dissenting / Abstaining Creditors are entitled, be deposited with this Hon'ble Forum in proportionate to the payments

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 20 of 29 getting released to the Assenting Financial Creditors year wise under the Resolution Plan.

f) Any other Order as this Hon'ble Tribunal may deem fit and proper."

[Emphasis supplied]

24. The Adjudicating Authority vide order dated 23.12.2021 had dismissed

the above-mentioned I.A. No.2028 of 2021 with following observations:

"8. Further, Resolution Plan once approved by the AA shall stand frozen and binding on all stakeholders including FCs. The Hon'ble Supreme Court in the matter of Ghanshyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Co. Ltd. (Civil Appeal 8129 of 2019, dated 13.04.2021) in para 95 (i) at pg. 103 held "That once a Resolution Plan is duly approved by the Adjudicating Authority under sub-section (1) of Section 31, the claims as provided in the Resolution Plan shall stand frozen and will be binding on the Corporate Debtor, and its employees, members, creditors, including the Central Government any State Government or any local authority, guarantors and other stakeholders."

[Emphasis supplied]

25. We note that now in the present Appeal before us, the Appellant has

sought the following reliefs:

"a) Set aside the Order dated 23.12.2021 passed by the Ld. Adjudicating Authority, Mumbai in LA 2028 of 2021 in CP No. 1137/MB/2017;

b) Direct that the discrimination in payment under the Resolution Plan on the basis of the Assenting Financial Creditor and Dissenting / Abstaining Financial Creditor be modified to the extent that all Secured Financial Creditors including the Appellant Bank shall be treated equally for

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 21 of 29 payment of Plan value subject to their individual exposure with the same terms as that of Assenting Financial Creditors;

c) Direct that, in the event that definitive documents have already been executed between the parties, to execute an Addendum Agreement incorporating with regard to the sharing of plan value ordered to be modified by this Hon'ble Appellate Tribunal;

d) Pending the hearing and disposal of this Appeal, direct that the share of the Appellant Bank, i.e., Rs.78.34 Crores out of balance amount of Rs.579.72 Crores for which the Dissenting/Abstaining Creditors are entitled, be deposited with this Hon'ble Appellate Tribunal in proportion to the payments getting released to the Assenting Financial Creditors year wise under the Resolution Plan;

e) Pending the hearing and disposal of this Appeal, pass an order granting stay of the Resolution Plan (exclusive of compliances part of pre-condition) and the enforcement of Financing documents;

f) Interim and Ad-interim relief in terms of prayer clause

(d) and (e); and

g) Pass such other or further order(s) as this Hon'ble Appellate Tribunal deems fit and proper in the facts and circumstances of the present case.

26. We observe that resolution plan of the Corporate Debtor was approved

by NCLT on 27.03.2019. The IA No. 2028 of 2021 was filed before the NCLT

on 07.09.2021 by the Appellant praying that the discrimination in payment

under the Resolution Plan on the basis of the Assenting and Dissenting / Abstaining

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 22 of 29 Financial Creditor be modified to the extent that all Secured Financial Creditors

(SFCs) inter alia Applicant be treated equally for payment of Plan value subject to

their individual exposure with the same terms as that of Assenting Financial

Creditors. This IA No. 2028 of 2021 was dismissed by NCLT on 23.12.2021

along with the application of Central Bank of India. Pursuant to such rejection

of these applications, the applicant filed this appeal before Appellate Tribunal

on 04.03.2022 which is filed with a delay of around 41 days from the

permissible last date of filing an appeal i.e. 22.01.2022. We find that sufficient

cause for the condonation of delay has not come on record or explained in

any hearing. Perusal of record shows that there is no application for

condonation of delay. The law as per Section 61(2) of the Code is very clear

that the Appeal has to be filed within 30 days and beyond 30 days, basis

sufficient cause, the condonation can be allowed up to 15 days. Basis date of

issue of the certified copy of the impugned order, which is placed on record,

with a date of 14.02.2022, the limitation has been counted and taken within

time, but which is against the provisions in the Code. And the Appeal should

be dismissed on this ground alone.

27. Furthermore, we also observe that in the present case, the resolution

plan was approved by the CoC on 27.03.2018 / 06.04.2018 while the same

was approved by the Adjudicating Authority on 27.03.2019. However, the IA

Nos. 2028/2021 and 2035/2021 were preferred by the Appellants only in

September, 2021, which is after more than 3 years 6 months from approval

of the resolution plan by the CoC and after more than 2 years 6 months from

approval of the resolution plan by the Adjudicating Authority. Thus, the said

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 23 of 29 IAs were belated and unjustified and could not have been entertained. There

is nothing on record to suggest that the Appellants objected to the Resolution

plan, post approval by the CoC and pre-approval by the Adjudicating

Authority even though they were having full knowledge of contents of the

resolution plan. We observe that even though the Appellant claims that it is

not challenging the resolution plan and it is just raising a question of

discrimination, basis which distribution to the dissenting Financial Creditor

is lower than the assenting Financial Creditor and even less than the

Operational Creditor, effectively it is challenging the resolution plan. To us

this is a case of challenge of resolution plan disguised as the modification in

the distribution. We are convinced with the arguments of R5/SBI that IAs

filed before the AA were much belated and unjustified and ought not to have

been entertained at all. We observe that the Resolution Plan was approved by

the CoC with 81.31% on 27.03.2018/06.04.2018, and the same was

approved by the Adjudicating Authority on 27.03.2019. However, the I.A. Nos.

2028/2021 & 2035/2021 before AA were preferred by the appellants only in

September 2021 i.e. after more than 3 years 6 months from approval of the

Resolution Plan by the СoC and after more than 2 years 6 months from

approval of the Resolution Plan by the Adjudicating Authority as noted by as

earlier herein. Thus, the said IAs were much belated and unjustified and

ought not to have been entertained at all because of acquiescence and gross

delay on the part of the Appellants. We are also convinced with the arguments

of R5/SBI that the Appellants, that in order to create appellate jurisdiction,

the Appellants approached the Adjudicating Authority by filing the IA Nos.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 24 of 29 2028/2021 & 2035/2021 despite knowing fully that the Adjudicating

Authority does not have the power/jurisdiction to change/modify the

approved Resolution Plan and thus, the said power/jurisdiction could not

have been exercised by way of appellate jurisdiction before this NCLAT.

28. Perusal of the submissions of the SRA and RP and the reliefs sought by

the Appellant, which, interalia, include modifying the provisions of the

resolution plan which provide for the distribution of amounts payable to

assenting and dissenting Financial Creditors, modifying the definitive

documents executed pursuant to implementation of the resolution plan and

in effect to stay the implementation of the resolution plan, we observe that it

is effectively challenging the resolution plan. Such a challenge could have

been done as an appeal before the Adjudicating Authority, within the

statutory period provided under the Code, but it was not done so. We observe

that the Appellant has filed the impugned application on 09.09.2021, only to

circumvent the limitation period for filing appeals. The resolution plan was

approved vide order dated 27.03.2019 and the order is not under challenge

and has never been under challenge by any of the two parties. The Appellants

cannot be allowed to challenge the resolution plan in the garb of their IAs

being dismissed, when the order dated 27.03.2019, of the Adjudicating

Authority approving the resolution plan has attained finality.

29. Respondents also get support from the judgment of Ghanashyam

Mishra & Sons Private Limited v. Edelweiss Asset Reconstruction

Company Limited, Civil Appeal No. 8919 of 2019 which has been relied

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 25 of 29 upon by Adjudicating Authority. Hon'ble Supreme Court has held as follows

in this judgment:

"...

95. In the result, we answer the questions framed by us as under:

i. That once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of the Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan;

ii. 2019 amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect;

iii. 'Consequently all the dues including the statutory dues owed to the Central Government, any State

Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants approval under Section 31 could be continue."

30. The above judgment reaffirms the binding nature of the resolution plan

as per Section 31 of the Code and we observe that the Appellant cannot be

permitted to take recourse to any other mode or manner to satisfy the

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 26 of 29 payment or recover the amounts payable to it other than what was envisaged

under the resolution plan. We note that the resolution plan stands frozen

upon its approval. By seeking amounts other than in the resolution plan, the

resolution applicant could not be saddled with liabilities which were not

foreseen by it. The present situation is similar to Ghanashyam Mishra &

Sons Private Limited (supra) and therefore as claimed by the Appellants. it

cannot be said that the judgment is not applicable in this case.

31. It was also argued by the Appellants that in the event that the

discrimination in payment is set aside, then the same would not in any

manner affect the basic structure of the Resolution Plan as the tenure of the

payment (12 years), the Resolution Plan Value (Rs. 3965.06 Crores) and other

pre-conditions for the benefit of Resolution Applicant would remain unaltered

and only the payment to the Financial Creditors would get readjusted as per

their exposure towards Corporate Debtor. For arguments sake if it is claimed

that there is no change in the value of the resolution plan and it is only

distribution within the same size of total plan and for that reason

Ghanashyam (supra) is not applicable, we note that such an argument is not

convincing as it upsets the resolution plan and brings uncertainty for the

SRA. Even if this argument is accepted, we find that basis other arguments

as noted herein earlier - particularly non-maintainability for which the Appeal

cannot be entertained by us and also the extant legal provisions in the Code

come in the way of the Appellants.

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 27 of 29

32. In the facts and circumstances of the case, we thus find that the appeal

filed is belated one without sufficient cause and is not maintainable. We also

observe that in the guise of intervention application, it is an appeal.

33. We also observe that the resolution plan had been agitated earlier by

one Resolution Applicant Sharad Sanghi and it was settled as per orders of

this Appellate Tribunal on 19th March 2019 and Appellant in the present case

being a FC, was fully aware of the proceedings. Thus, we observe that it could

have intervened or filed an Appeal, which it didn't do. By allowing the present

IA of the Appellant in this case we cannot reopen the approval of the

resolution plan. The Appellant is thus estopped from any relief on this Appeal.

34. We also note that the plan has been implemented as on November,

2021 and the business of the company has already been taken over by the

new management of the company. The pay outs as envisaged under the

resolution plan are already under process and disrupting them will militate

against the very logic of the due process envisaged under the Code.

35. Adjudicating Authority vide order dated 27.03.2019 had approved the

resolution plan. No appeals were filed against the resolution plan approval

order within the statutory period prescribed under the Code and therefore the

resolution plan approved attained finality. Being a Financial Creditor of the

company, the appellant was at all times aware of all the developments with

respect to the resolution plan from the date of the plan approval order till its

implementation on 09.11.2021. Despite this, Appellant had chosen to file an

application in September 2021, about 30 months after the approval of the

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 28 of 29 resolution plan. There is an unjustifiable delay on the part of the Appellant

in challenging the provisions of the resolution plan. The Appellant is

effectively seeking to challenge the resolution plan at this belated stage, after

the resolution plan has already attained finality.

36. Thus, on the count of limitation under Section 61(2) of the Code, the

Appeal is not maintainable. Accordingly, the Appeal doesn't deserve to be

entertained. No intervention is required in the orders of the Adjudicating

Authority. We also observe that the Appellants have been wasting the

precious time of both NCLT and NCLAT by filing unjustified claims and that

too belatedly.

Orders

37. Basis above analysis, the appeal is dismissed as not maintainable. All

related IAs are also disposed of. No orders as to costs.

[Justice Yogesh Khanna] Member (Judicial)

[Ajai Das Mehrotra] Member (Technical)

[Arun Baroka] Member (Technical) New Delhi.

January 09, 2026.

Pawan

Company Appeal (AT) (Insolvency) No. 344 & 345 of 2022 29 of 29