Independent Sugar Corporation Limited vs Committee Of Creditor Of Hindusthan ...

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No.516 of 2025 (Arising out of Order dated 11.03.2025 passed by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata in IVN. P (IBC)/5(KB)2025 in C.P.(IB)/369(KB)2020)

IN THE MATTER OF: Independent Sugar Corporation Ltd. ...Appellant

Versus

Committee of Creditors of Hindusthan National Glass & Industries Ltd. & Ors. ...Respondents

Present: For Appellant : Mr. Ritin Rai, Sr. Advocate with Mr. Rishav Banerjee, Mr. Utsav Trivedi, Ms. Pooja Chakrabarti, Ms. Kiran Sharma, Ms. Manini Roy, Mr. Mridul Godha and Ms. Nandini Acharya, Advocates. Mr. Yadnath Bhargavan, Mr Akshay Chandra, Advocates for Intervenor/Impleading Applicant. For Respondents : Mr. Siddhant Kant and Ms. Gayathri Balasubramanian, Advocates for R-1/CoC. Mr. Abhishek Anand and Mr. Mohit Gupta, Advocates for CoC. Mr. Krishnendu Datta, Sr. Advocate with Mr. Vikram Wadhera, Ms. Smriti Churiwal, Mr. Jaiveer Kant, Mr. Akhil Nene, Advocates for R-2/RP. Mr. Joy Saha, Ms. Liz Mathew, Sr. Advocates with Abhijeet Sinha, Mr. Bhagavathy and Ms. Aastha Vishwakarma, Advocates for R-3.

JUDGMENT

ASHOK BHUSHAN, J.

This Appeal has been filed challenging order dated 11.03.2025

passed by National Company Law Tribunal, Kolkata Bench in IVN. P

Company Appeal (AT) (Ins.) No.516 of 2025 1 (IBC)/5(KB)2025. The Appellant aggrieved by the order has come up in

this Appeal.

2. Brief background facts necessary to be noticed for deciding the

Appeal are:

i. Corporate Insolvency Resolution Process ("CIRP") was

initiated against Hindusthan National Glass & Industries Ltd.

- Corporate Debtor ("CD") vide order dated dated 21.10.2021.

Mr. Girish Sriram Juneja (Respondent No.2 herein) was

appointed as Interim Resolution Professional ("IRP"), who was

latter confirmed as Resolution Professional ("RP") of the CD.

ii. In the CIRP of the CD, three Resolution Plans were received,

i.e. by the Appellant, AGI Greenpac ("AGI") and Nirma

Chemical Works Private Limited. CoC on 28.10.2022

approved the Resolution Plan of AGI with 98% vote share. The

Resolution Plan of the Appellant received 88% vote share.

iii. The AGI - Resolution Applicant had submitted an Application

with the Competition Commission of India ("CCI") seeking

approval to enter into combination with the CD. The CCI on

15.03.2023 granted approval to AGI combination proposal

with the CD. There have been challenge to the order of CCI.

The NCLT rejected the Application on 28.04.2023. An Appeal

and various Applications were filed in Company Appeal (AT)

(Ins.) No.735 of 2023 before this Tribunal. This Tribunal vide

order dated 18.09.2023 upheld the approval granted to the

Company Appeal (AT) (Ins.) No.516 of 2025 2 AGI observing that prior approval was only 'directory'. The

Appellant also challenged CCI approval dated 15.03.2023

before the NCLAT, which order was upheld by NCLAT on

28.07.2023. The Appellant filed Civil Appeal before the

Hon'ble Supreme Court, challenging both the orders i.e.

28.07.2023 and 18.09.2023. The Hon'ble Supreme Court

vide its order dated 29.01.2025 set aside the approval

granted to the Resolution Plan of AGI, holding that approval

of CCI is mandatory before Resolution Plan can be approved

by the CoC. The Hon'ble Supreme Court by its judgment

dated 29.01.2025, issued following directions:

"155. The upshot of the above discussion are the following orders:

155.1. The AGI Greenpac's Resolution Plan is unsustainable as it failed to secure prior approval from the CCI, as mandated under the proviso to Section 31(4) of the IBC. Consequently, the approval granted by the CoC to the Resolution Plan dated 28.10.2022 without the requisite CCI approval, cannot be sustained and is hereby set aside and quashed.

155.2. Any action taken pursuant to the Resolution Plan shall stand nullified, and the rights of all stakeholders shall be restored as per status quo ante, prior to the approval of the Resolution Plan by the CoC on 28.10.2022.

155.3. Consequently, the CoC shall reconsider the Appellant's Resolution Plan and any other Resolution Plans which possessed the requisite CCI approval as on 28.10.2022 i.e., the date on which the CoC voted upon the submitted Resolution Plans."

Company Appeal (AT) (Ins.) No.516 of 2025 3 iv. On 30.01.2025, Insolvency and Bankruptcy Board of India

("IBBI") issued a show cause notice to the RP - Mr. Girish

Sriram Juneja . The Adjudicating Authority on 04.02.2025,

taking into consideration the direction of the Hon'ble

Supreme Court, directed the CoC to consider the Plan

submitted by H2 Bidder i.e. Appellant. The CoC in its

Meeting dated 04.02.2025 approved the Resolution Plan of

the Appellant and also resolved to file an Application seeking

extension of CIRP period. I.A. 269/KB/2025 has been filed

by RP, praying for various reliefs, including extension of

CIRP.

v. The Adjudicating Authority on 14.02.2025 framed certain

questions with respect to resolution process. On 14.02.2025,

the Adjudicating Authority observed that it hopes and trust

that till the matter is finally heard, no further steps would be

taken by the CoC or RP pursuant to the 'resolution' adopted

on 04.02.2025. The Applications were heard on 27.02.2025.

The RP also filed an Application before the Adjudicating

Authority seeking approval of Resolution Plan being IA (Reso

Plan) 6/KB/2025. An Appeal in this Tribunal was also filed

challenging order dated 27.02.2025, which was dismissed by

this Tribunal on 07.03.2025

vi. The Application - INV. P (IBC) No.5/KB/2025 was filed by

Soneko Marketing Pvt. Ltd., an Operational Creditor, praying

Company Appeal (AT) (Ins.) No.516 of 2025 4 for intervention. The said Application came for consideration

before the Adjudicating Authority on 11.03.2025, on which

date, following order was passed by the Adjudicating

Authority:

"IVN.P (IBC)/5(KB)2025

Heard Ld. Sr. Counsel for the parties on the interim relief.

Let reply affidavit be filed to this application by the respondent within a period of five days from today. Consequent upon filing of reply affidavit, rejoinder if any, be filed within next five days. Both the parties are hereby directed to supply advance copy to each side as stated above.

In the meantime, RP is hereby directed not to proceed with the decisions on any resolution plan. However, he will continue to run the CIRP process and keep the company is going concern. It is made clear that pleadings should be completed in all eventuality before the date fixed and no further adjournment will be given for hearing of this application. The matter will be heard on the date fixed.

Registry is hereby directed to list the matter on the top of Board. Ld. Sr. Counsel for the parties are hereby directed to remain present for hearing on the date fixed. Ld. Counsel for the parties are further directed to file written submission, if any, not more than three pages in support of their arguments.

List the matter on 26/03/2025 for hearing."

vii. Subsequent to the order dated 11.03.2025, the Adjudicating

Authority passed an order on 17.03.2025 in IA(IB)

No.269/KB/2025, where various reliefs were claimed,

including extension of CIRP period. The Adjudicating

Company Appeal (AT) (Ins.) No.516 of 2025 5 Authority in its order dated 17.03.2025 took the view that

post the IA(IB) No.269/KB/2025 was reserved for orders, the

CP-369/KB/2020 has been transferred to another Bench.

Hence, Adjudicating Authority refrained from commenting on

all other matters associated with the present case and the

same may be taken up before the Bench, where the matter is

transferred. The Adjudicating Authority however, on prayer

of the RP for clarification, granted following clarification in

paragraph 18:

"18. In regard to the prayer "a" of the application seeking clarification of the order dated 10.02.2025 we have already clarified in presence of all the parties that filing of IAs have not restrained and applications have already been filed by the CoC and RP which have been entertained by this Tribunal even after the order of 10.02.2025."

3. This Appeal has been e-filed on 24.03.2025 challenging the order of

Adjudicating Authority dated 11.03.2025. On 27.03.2025, the Appeal

was taken for consideration and on the request made by learned Counsel

for the Respondent, the matter was fixed for 28.03.2025. The Appeal was

heard on the said date and the order was reserved.

4. We have heard Shri Ritin Rai, learned Senior Counsel appearing for

the Appellant; Shri Joy Saha, learned Senior Counsel appearing for

Respondent No.3, who had filed the Application for Intervention Petition

No. IBC)/5(KB)2025. We have also heard Shri Krishnendu Datta, learned

Senior Counsel for the RP and learned Counsel appearing for the CoC/

Respondent No.1.

Company Appeal (AT) (Ins.) No.516 of 2025 6

5. Learned Counsel for the Appellant in support of the Appeal submits

that by order of the Hon'ble Supreme Court dated 29.01.2025, the

Hon'ble Supreme Court has directed for consideration of the Appellant's

Resolution Plan and any other Resolution Plan, which possessed the

requisite CCI approval as on 28.10.2022, i.e. the date on which the CoC

voted upon the Resolution Plan of AGI. In view of the direction of the

Hon'ble Supreme Court, it was obligatory on the CoC and the RP to

consider the Resolution Plan of the Appellant. After the order was passed

by the Hon'ble Supreme Court, a show cause notice dated 30.01.2025

was issued to the RP by IBBI, which show cause notice has no effect on

continuation of the RP in the present proceedings. Such initiation of

show cause notice result in automatic suspension of RP's Authorization

for Assignment ("AFA") granted to the RP, which debars the RP from

taking any fresh assignment. However, issuance of show cause notice,

does not prohibit the RP to continue with the existing engagement. After

the order of the Hon'ble Supreme Court various applications have been

filed by Operational Creditor, i.e. suspended Management, by filing

different Intervention Applications to stall the process of approval of

Resolution Plan. The Application - Inv. P (IBC)/5(KB)2025 was filed only

with the said object and Adjudicating Authority committed error in

passing an interim order on 11.03.2025, directing the RP not to proceed

with the decision on any Resolution Plans, which interim order is

unsustainable. It is submitted that the interim order passed by

Adjudicating Authority has effect of stopping the RP and the CoC from

complying the order of Hon'ble Supreme Court dated 29.01.2025. It is

Company Appeal (AT) (Ins.) No.516 of 2025 7 submitted that Adjudicating Authority itself by order dated 17.03.2025

clarified that filing of IAs have not restrained and Applications have

already been filed by the CoC and RP, which have been entertained by the

Tribunal even after the order of 10.02.2025 (correct date is 14.02.2025).

Learned Counsel for the Appellant submits that Appellant's only prayer in

this Appeal is that Adjudicating Authority may be directed to proceed with

the Plan approval application and all other Application/ Intervention

Applications and decide the same. Learned Counsel for the Appellant

submits that although by issue of show cause notice, there is no embargo

on the RP with respect to continuing with the existing assignment,

however, this Tribunal may direct the NCLT to treat all pending

Applications as objections to the Plan approval application and decide the

same, so that order of the Hon'ble Supreme Court dated 29.01.2025 be

implemented.

6. Shri Joy Saha, learned Senior Counsel appearing for Respondent

No.3 - Soneko Marketing Pvt. Ltd., who had filed Intervention Application

No.(IBC)/5(KB)2025, opposing the Appeal contends that the effect of

issuance of show cause notice by the IBBI is automatic suspension of AFA

of the RP. The AFA having been suspended automatically, the RP cannot

proceed, in the present proceedings. The Adjudicating Authority has

rightly restrained the RP from proceeding with the Resolution Plan.

Learned Counsel has relied on the judgment of High Court of Madras in

CA. V. Venkata Sivakumar vs. Insolvency and Bankruptcy Board of

India - (2024) SCC OnLine Mad 156 as well as judgment of High Court

Company Appeal (AT) (Ins.) No.516 of 2025 8 of Bomaby in Kairav Anil Trivedi vs. Insolvency and Bankruptcy

Board of India and ors. - (2024) SCC OnLine Bom 2572.

7. Learned Counsel for the CoC submits that the Resolution Plan

having been approved by the CoC on 04.02.2025, Application for approval

of Resolution Plan needs to be considered. It is submitted that

Intervenors, dissenting secured Financial Creditors and Suspended

Management are trying to stall the CIRP by filing one after another

Intervention Applications. It is submitted that by issuance of show cause

notice, the RP is not prohibited from continuing the existing assignment.

The RP cannot take any new assignment in view of suspension of AFA.

Reference has been made to Regulation 7A of IBBI (Insolvency

Professional) Regulations, 2016.

8. We have considered the submissions of learned Counsel for the

parties and have perused the records.

9. The Appellant is aggrieved by the following part of the impugned

order i.e. "In the meantime, RP is hereby directed not to proceed with the

decisions on any resolution plan". The submission of the Appellant is that

all Intervention Applications and objections to the Resolution Plan need to

be considered simultaneously by the Adjudicating Authority and the

process need not be stopped. The issuance of show cause notice dated

30.01.2025 in no manner prohibit the RP to continue with the

assignment. In any view of the matter, the Hon'ble Supreme Court has

directed for consideration of Resolution Plan of the Appellant by the CoC

and RP submitted as on 28.10.2022.

Company Appeal (AT) (Ins.) No.516 of 2025 9

10. The submission canvassed before us by contesting parties is

regarding engagement of RP to continue in the process or not. Admittedly,

Intervention Petitions (IBC)/5(KB)2025 and other Applications are still

pending and have still not been finally decided. When the Hon'ble

Supreme Court had directed the CoC to reconsider the Resolution Plan of

the Appellant as on 28.10.2022, we are of the view that the Resolution

Plan Application along with all objections regarding continuance of the RP

in the CIRP, need to be finally decided by the Adjudicating Authority.

Stopping the process will further delay the resolution of the CD. We have

already noticed that IA 269/KB/2025 has already been filed by the RP for

extension of timeline of the CIRP. The Hon'ble Supreme Court having

directed for consideration of Resolution Plan of the Appellant, the

Adjudicating Authority has to consider and pass an appropriate order on

the said Application, which Application is also now pending for

adjudication.

11. Shri Joy Saha, learned Senior Counsel for Respondent No.3 has

submitted that Adjudicating Authority has already passed an order on

14.02.2025, where the Adjudicating Authority directed "we hope and

trust that till the matter is finally heard and disposed of, no further steps

would be taken by the CoC or RP pursuant to the 'resolution' adopted on

04/02/2025 and 10/02/2025". The submission is that the order dated

14.02.2025 being continuing and which order was never challenged, the

Adjudicating Authority has rightly passed the impugned order on

11.03.2025. We noticed above that Adjudicating Authority in its order

Company Appeal (AT) (Ins.) No.516 of 2025 10 dated 17.03.2025 in IA 269/KB/2025 has issued clarification. The

Adjudicating Authority, which had passed order on 14.02.2025, have

clarified that 'filing of IAs have not restrained and applications have

already been filed by the CoC and RP, which have been entertained by this

Tribunal even after the order of 10.02.2025 (correct date is 14.02.2025)'.

In view of the above clarification dated 17.03.2025, we are of the view that

order dated 14.02.2025, cannot be read in a manner as submitted by

Learned Counsel for Respondent No.3. Learned Counsel for Respondent

No.3 submitted that order was never challenged. However, Learned

Counsel for RP has contended that Application for clarification was

already filed being IA 269/KB/2025, which clearly covered the issue. We,

thus, are of the view that in view of the clarification order dated

17.03.2025, order dated 14.02.2025, cannot be read as any kind of

restraint put by the Adjudicating Authority.

12. The present is a case where CIRP has commenced as early as on

21.10.2021 and the process has not reached to its culmination. We are of

the view that in view of the order of the Hon'ble Supreme Court dated

29.01.2025, the Adjudicating Authority need to proceed with the

consideration of all pending Applications, including Plan approval

Application and Application - IVN. P (IBC)/5(KB)2025 and decide all

issues, including competency of the RP to participate in the ongoing

process. Applications being pending before the Adjudicating Authority,

we refrain ourselves from expressing any opinion on the submissions

regarding continuance of the RP as noticed above. Ends of justice will be

Company Appeal (AT) (Ins.) No.516 of 2025 11 served in disposing the Appeal by deleting the following directions from

the impugned order:

"....In the meantime, RP is hereby directed not to proceed with

the decisions on any resolution plan. ...."

13. We further are of the view that Adjudicating Authority may

proceed to consider all pending Applications, including Resolution Plan

approval Application, i.e. I.A. 269/KB/2025 and IVN. P (IBC)/5(KB)2025

and all other pending Applications and decide the same at the earliest in

accordance with law. The Appeal is disposed of accordingly. There shall

be no order as to costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

NEW DELHI

4th April, 2025

Ashwani

Company Appeal (AT) (Ins.) No.516 of 2025 12