State Bank Of India vs Mbl Infrastructures Limited & Anr

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No. 539 of 2022 (Arising out of Order dated 11.03.2022 passed by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata in I.A. No.(IB)626/KB/2021 in C.P.(IB) No.170/KB/2017)

IN THE MATTER OF: State Bank of India Stressed Asset Resolution Group, Corporate Centre, 21st Floor, Make Tower 'E' Cuffe Parade, Mumbai-400005. ... Appellant

Vs

1. MBL Infrastructures Limited, 308, 3rd Floor, Baani Corporate One, Commercial Centre, Jasola, New Delhi-110025.

2. Anjanee Kumar Lakhotia, B-37, 1st Floor, Soami Nagar (South), New Delhi - 110017. ... Respondents

Present:

For Appellant: Mr. Krishnendu Datta, Sr. Advocate, Ms. Moulshree Shukla, Mr. Rahul Gupta, Ms. Varsha, Mr. Krishan Singhal, Advocates

For Respondents: Mr. Ratnako Banerji & Mr. Arun Kathpalia, Sr. Advocate, Ms. Anusuya Salwan, Mr. Bankim Garg, Mr. Rachit Wadhwa, Ms. Nikita Salwan, Mr. Shaunak Mitra, Mr. Aditya Dhupar, Advocates

JUDGMENT

ASHOK BHUSHAN, J.

This Appeal by State Bank of India ("SBI"), one of the Member of the

erstwhile Committee of Creditors ("CoC") of M/s MBL Infrastructures

Limited has been filed challenging the order dated 11.03.2022 passed by

Company Appeal (AT) (Insolvency) No. 539 of 2022 1 National Company Law Tribunal, Kolkata Bench, Kolkata in I.A.

No.(IB)626/KB/2021 filed by Respondent herein, in which IA, the

Adjudicating Authority has issued certain directions to the Appellant for

implementation of the approved Resolution Plan. Aggrieved by the order

and directions issued by the Adjudicating Authority, the Appellant has

come up in this Appeal.

2. Brief facts of the case for deciding the Appeal are:

(i) M/S MBL Infrastructures Ltd. was set-up by one Mr. A. K.

Lakhotia. Certain financial facilities were extended to M/S

MBL Infrastructures Ltd. in which default was committed,

resulting in initiation of proceedings under Section 7 of the

Insolvency and Bankruptcy Code, 2016 (hereinafter referred to

as the "Code"). On 30.03.2017, Section 7 Application was

admitted and Corporate Insolvency Resolution Process

("CIRP") begun.

(ii) Mr. A.K. Lakhotia, submitted a Resolution Plan. After

submission of Plan by Mr. A.K. Lakhotia, Section 29A was

introduced in the Code with effect from 23.11.2017. The

Adjudicating Authority declared the Resolution Applicant

eligible vide order dated 18.12.2017, which was challenged by

Punjab National Bank by way of an Appeal, where an interim

order was passed that without prior approval of the Appellate

Tribunal, no Plan shall be accepted. An Appeal was also filed

by the RBL Bank.

Company Appeal (AT) (Insolvency) No. 539 of 2022 2

(iii) The Appellate Tribunal permitted the Appeals to be withdrawn

on 23.03.2018. Thereafter, Resolution Plan was approved by

75.80% voting share. By an order dated 18.04.2018, the

Adjudicating Authority approved the Resolution Plan and also

excluded the period of 106 days.

(iv) The State Bank of India, IDBI Bank, Bank of Baroda and Bank

of India filed four separate Appeals, challenging order dated

18.04.2018 passed by the Adjudicating Authority, before the

Appellate Tribunal. The main ground of challenge in the

Appeal was that Resolution Applicant was ineligible in view of

Section 29A. From time-to-time meeting of all financial

creditors and lenders were held wherein various issues were

discussed.

(v) By order dated 16.08.2019, Appellate Tribunal confirmed the

Plan approval order. A Contempt Application was also filed by

the Resolution Applicant against the State Bank of India, on

which an order was passed by the Adjudicating Authority on

21.10.2019, disposing of the Contempt Petition with direction

to the Committee of Creditors/ Monitoring Committee to

implement the Resolution Plan in entirety.

(vi) Bank of Baroda filed a Civil Appeal No.8411 of 2019, assailing

the Plan approval order. The Consortium Bank has appointed

Forensic Auditor.

Company Appeal (AT) (Insolvency) No. 539 of 2022 3

(vii) The Hon'ble Supreme Court vide its judgment dated

18.01.2022 dismissed the Appeal filed by Bank of Baroda. The

Hon'ble Supreme Court although held that Resolution

Applicant was not eligible under Section 29A, but noticing the

subsequent facts, including the fact that Resolution Applicant

has already infused Rs.63 crores and Corporate Debtor is a

on-going concern, Hon'ble Supreme Court did not interfere

with the order approving the Resolution Plan and was of the

view that Resolution Plan be implemented.

(viii) Before dismissal of the Appeal on 18.01.2022, the Resolution

Applicant had filed IA No. (IB)626/KB/2021 seeking exclusion

of period between 18.04.2018 until disposal of the application.

The Adjudicating Authority vide order dated 11.03.2022

disposed of the IA No. (IB)626/KB/2021 and in paragraphs 11,

12 and 13, the Adjudicating Authority issued following

directions:

"11. After hearing both the parties at length and after going through the pleadings and documents placed on record including the judgments passed by the Hon'ble Supreme Court and the Hon'ble NCLAT, we direct the SBI, the lead bank of the working capital consortium to take steps for implementation of the approved resolution plan by executing working capital consortium documents;

i. By executing capital consortium documents; ii. By issuing Bank guarantee and letters of credit as per approved resolution plan

Company Appeal (AT) (Insolvency) No. 539 of 2022 4

iii. By issuing certificate regarding availability of line of credit as per approved resolution plan iv. And by issuing net worth certificate/ solvency certificate required for bidding in tenders for public section infrastructure projects.

12. It is further directed that meeting available Non Fund Based limits and execution of documentation in respect thereof, shall form an integral part of the approved plan. It is further ordered that the period from 18th April, 2018 till 18th January, 2022 when the Hon'ble Supreme Court passed the judgment and order shall be formally excluded from calculation of the period for implementation of the plan and all dates mentioned in the resolution plan are consequentially extended for implementation of the resolution plan.

13. We understand the concern of the State Bank of India as submitted by the Ld. Counsel, and we direct that forensic audit on the issues like whether the applicants have infused Rs.66 crore or not can be taken up and continued at their end, and the applicants shall provide all the necessary cooperation to the bank in this regard but for the present the prime importance is the implementation of the resolution plan. In case there is any hindrance or non-cooperation by the applicants in the conduct of the forensic audit, the bank can always seek directions from this Adjudicating Authority."

(ix) The State Bank of India aggrieved by this order has come up in this Appeal."

3. We have heard Shri Krishnendu Datta, learned Senior Counsel

appearing for the Appellant, Shri Ratnako Banerji, learned Senior Counsel

Company Appeal (AT) (Insolvency) No. 539 of 2022 5 and Shri Arun Kathpalia, learned Senior Counsel appearing on behalf of

Respondent.

4. The learned Counsel for the Appellant submits that there was no

interim order passed by the Hon'ble Supreme Court staying the

implementation of the Plan, hence, there was no occasion to exclude the

period from 18.04.2018 to 18.01.2022. It is submitted that Lenders have

approved the Resolution Plan keeping in mind a particular time-line under

which the Plan was to be implemented and Lenders have to receive the

money. By exclusion of period of three years and nine months, the

Resolution Plan stands modified, which is impermissible. Granting of

exclusion of three years and nine months fundamentally alters the

Resolution Plan from one by term of ten years to one by term of fourteen

years. It was not open to the Adjudicating Authority to allow modification

of any nature or to permit the conditional implementation. The impugned

order passed by the Adjudicating Authority has altered the very basis on

which the Resolution Plan was adjudged as feasible and viable. The

impugned order failed to take into account that Respondent No.2

(Resolution Applicant) has repeatedly defaulted in implementing the

Resolution Plan. First default committed by the Resolution Applicant is its

failure to bring promoters contribution. The Resolution Applicant has also

failed to discharge the debt of Operational Creditor. The Resolution

Applicant has also failed to comply with cash flow monitoring. The

Resolution Applicant was obliged to issue NCD to the Financial Creditors.

The Corporate Debtor failed to issue the NCD in accordance with due

Company Appeal (AT) (Insolvency) No. 539 of 2022 6 procedure of law including SEBI guidelines. The Resolution Applicant has

never been serious about implementing the Plan. The SBI is a public

financial institution and it cannot disburse finance to entities without

satisfying itself that financial affairs of the entities are not mismanaged.

The SBI and other Financial Creditors were unable to further finance the

Corporate Debtor as the implementation requirement under the Resolution

Plan, the Resolution Applicant never cooperated for a proper forensic audit.

The forensic audit conducted by the erstwhile Resolution Professional

remined inconclusive and unsatisfactory for the Lenders. The Lenders

appointed new Forensic Auditor on 04.10.2019. The new Forensic Auditor

also could not provide a conclusive report. The Lenders appointed another

Forensic Auditor - M/s BDO LLP, but the Corporate Debtor did not

cooperate with the Forensic Auditor.

5. The learned Counsel for the Respondents, refuting the submissions

of the learned Counsel for the Appellant submits that it is the Appellant

and other Lenders, who were never interested in implementing the Plan

and the order of the approval dated 18.04.2018 was challenged by many

Lenders including the State Bank of India. Challenge by the Lenders,

culminated in dismissal of Civil Appeal by Hon'ble Supreme Court on

18.01.2022. During this period, the Lenders had no intention to implement

the Plan. It is apparent from the fact that SBI did not execute necessary

documents regarding execution of working capital consortium document.

The argument regarding cash flow monitoring, in the meeting held on

03.05.2018, all the Banks unanimously agreed that the pool account with

Company Appeal (AT) (Insolvency) No. 539 of 2022 7 SBI shall be the pool account envisaged in the Plan. All proceeds of

Respondent No.1 were deposited and all expenditure were made from the

said pool account. There was sufficient cash flow monitoring in terms of

the Plan. The pool account was in absolute control of the SBI. The Banks

have appointed independent and reputed statutory Auditors of their choice.

Two rounds of forensic audit were already concluded by the Forensic

Auditors empaneled with SBI and approved unanimously by the CoC

without any adverse findings against Respondent No.1. The Promoters

contribution of Rs.63.30 crores (Rs.40.11 crores fresh + Rs.23.19 crores

existing credit) was brought in the pool account by the Promoters within

one quarter of order dated 18.04.2018. All payments that could made,

which were not dependent on execution of documents by SBI were made.

The payment of liquidation value to Dissenting Financial Creditors were

always been available with Respondent No.1 in form of working capital.

Despite being assured since 30.05.2018, the liquidation value has not been

collected by Dissenting Financial Creditors, first on the ground of pending

Appeals before the Appellate Tribunal, thereafter pending Civil Appeal

before the Hon'ble Supreme Court and now again pending Appeal before

this Tribunal. The issue of NCD and their redemption is dependent on SBI

executing the documents as decided unanimously by all Banks on

03.05.2018. The Respondents have implemented all terms of the Plan

except which is dependent on the SBI. The exclusion of period from

18.04.2018 to 18.01.2022 was reasonable and necessary since during the

aforesaid period Lenders themselves were litigating against the approval of

Company Appeal (AT) (Insolvency) No. 539 of 2022 8 Resolution Plan and they had no intention to implement the Plan. The

Banks were clearly of the view that the Plan being already under challenge,

they cannot risk disbursement of significant public money without final

adjudication of the issue raised. When the Banks themselves had no

mindset to implement the Plan, they cannot complain regarding the

exclusion of the subject period during which period was Lenders

themselves, who were challenging the approval of the Plan. The Corporate

Debtor is an infrastructure company executing civil engineering projects

particularly roads and highways. Before approving the Plan, a TEV Study

Report was got conducted by PNB Investment Services Ltd. There was an

economic viability study much before approval of the Resolution Plan. As

per the Techno Economic Viability Report for effective implementation of

the Resolution Plan availability of Bank Guarantees, Letters of Credit and

working capital facility by the Working Capital Consortium was essential.

By approving the Plan, assenting working capital Banks agreed to continue

to make available Non-Fund Based ("NFB") facilities (Bank Guarantees and

Letters of Credit) of Rs.303.63 crores. After approval of the Plan erstwhile

Resolution Professional handed over the management to the Board of

Directors of the Company in terms of the approved Plan. A new working

capital consortium comprising of six assenting Banks was constituted with

the Appellant-SBI as the lead Bank. The Bank got conducted forensic

audit, in which audit report, nothing adverse was found. The Plan was not

implemented by working capital consortium led by SBI. Despite all, the

Banks unanimously agreed to implement the Plan in meeting held on

Company Appeal (AT) (Insolvency) No. 539 of 2022 9 03.05.2018, the Bank had returned NCD stating non-implementation of

the Plan by SBI. Under the circumstances, Respondent was constrained

to file IA No. (IB)626/KB/2021. The Respondent is continuing as a going

concern and several projects have been completed by the Respondent after

approval of Resolution Plan and it was due to non-cooperation of the

Lenders that further steps could not be taken.

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

parties and have perused the record.

7. While noticing the facts of the case, we have noted that even before

approval of the Resolution Plan by the CoC, the issue of ineligibility of

Resolution Applicant was raised and against the order of the Adjudicating

Authority, declaring the Resolution Applicant eligible, Appeals were filed by

Punjab National Bank and RBL Bank, which Appeals were withdrawn on

23.03.2018 by an order of the Appellate Tribunal. Thereafter, Plan was

approved on 18.04.2018. After approval of the Plan by the Adjudicating

Authority, again a set of litigation was initiated by the Lenders, including

the SBI. Four Appeals were filed challenging the Plan approval order. In

the Appeal, which was filed by the Lenders against the Plan approval order,

there was order passed by this Appellate Tribunal that decision regarding

approval or rejection of the Plan, shall not be taken without leave of the

Appellate Tribunal. Ultimately, the Appeals were dismissed by the

Appellate Tribunal on 16.08.2019. We may notice the Minutes of the

Meeting of Consortium Lenders held on 02.03.2019, where issues

regarding Resolution Plan were noticed. The Minutes clearly notice that

Company Appeal (AT) (Insolvency) No. 539 of 2022 10 SBI has challenged the eligibility of the Resolution Applicant before the

Appellate Tribunal. The Appellate Tribunal has also passed an order

directing that no order shall be passed in the contempt proceedings, if any,

filed against the Financial Creditor. Following part of the Minutes is

relevant to notice where details of challenge in the Appellate Tribunal has

been noticed:

"In the meantime IDBI, BOB and OBC approached NCLAT, challenging Resolution Plan approved by NCLT Kolkata. NCLAT vide order dated 09.05.2018 instructed execution as per its orders.

Against the final order of NCLT Kolkata regarding approval of Resolution Plan, IDBI Bank vide appeal No.194/2018 and BOI vide 235/2018 have approached NCLAT Delhi. The case has been admitted on 21.05.2018 and the next date of hearing is 20.03.2018.

The NCLAT Delhi has issued orders on 09.05.2018 and directed that the execution of plan is subject to decision of NCLAT and till then the company has to ensure to protect the value of its assets.

As this, SBI also filed an appeal in NCLAT, reporting ineligibility of Sh. Lakhotia u/s 29A on 03.07.2018. The Hon'ble NCLAT dismissed the appeal on the basis of limitation & did not hear the merits on request of senior lawyer from Sh. A.K. Lakhotia side.

SBI has impleaded application with BOI and approached NCLAT, challenging eligibility of Sh. Lakhotia to be Resolution Applicant with suppressing the facts before NCLT Kolkata to become eligible Resolution Applicant u/s 29A on 18.12.2017.

Company Appeal (AT) (Insolvency) No. 539 of 2022 11 On 20.03.2019 Hon'ble NCLAT issued orders

"Heard in part. We also discussed the matter with the promoters, who are also the Resolution Applicant, about improving the plan before going into the question of legality of the approved plan and the impugned order. Post the case for further under the heading for "Orders on 8th April, 2019 at 2 PM. Until further order, the Adjudicating Authority will not pass any order on the contempt proceedings petition, if any, filed against the Financial Creditor and the officers of the Financial Creditor and others."

SBI apprised that SAMB-II is being shifted to new location and requested all lenders to note new address as under:-

State Bank of India, SAMB-II, 11st Floor, STC Building, Jawahar Vayapar Bhawan, Janpat, New Delhi-110001.

The meeting ended with a vote of thanks by AGM, SBI."

8. The fact that the Financial Creditors right from the very beginning,

even before approval of the Resolution Plan have been raising ineligibility

issue in respect of the Resolution Applicant and after approval of the Plan

several Appeals were been filed by the Lenders themselves, challenging the

approval order contending that Resolution Applicant is ineligible. When

Lenders themselves were challenging the approval of the Plan, it is

reasonable to comprehend that Lenders were not keen to implement the

Plan. The Resolution Applicant has initiated contempt proceedings in

which also subsequently the Adjudicating Authority while disposing of the

contempt application directed the SBI to implement the Resolution Plan.

Company Appeal (AT) (Insolvency) No. 539 of 2022 12

9. Now, we come to the judgment of the Hon'ble Supreme Court dated

18.01.2022 by which order, the Appeal filed by the Bank of Baroda against

the order of the Appellate Tribunal, confirming the approval order was

dismissed. It is relevant to notice that in paragraph 31 of the judgment,

the Hon'ble Supreme Court had noted that Respondent is an on-going

concern. The Hon'ble Supreme Court has also noticed that Respondent

No.3 has infused over Rs.63 crores. The Hon'ble Supreme Court has also

approved the order of Adjudicating Authority, granting extension of

exclusion on account of pending litigation. The Hon'ble Supreme Court

although after considering the submission of the parties held that the

Resolution Applicant was not eligible to submit the Resolution Plan under

Section 29A(b) of the Code, however, Hon'ble Supreme Court even after

holding that Resolution Applicant is not eligible, did not chose to interfere

with the Plan approval order. We may in this regard refer to paragraphs

61, 62, 63 and 64 of the judgment of the Hon'ble Supreme Court, which is

to the following effect:

"61. Having held so, we would like to come to the last part of our order. Though the very resolution plan submitted by the Respondent No. 3, being ineligible is not maintainable, much water has flown under the bridge. The requisite percentage of voting share has been achieved. We may also note that the percentage has been brought down from 75% to 66% by way of an amendment to Section 30(4) of the Code.

62. Secondly, majority of the creditors have given their approval to the resolution plan. The adjudicating authority has rightly noted that it was accordingly

Company Appeal (AT) (Insolvency) No. 539 of 2022 13 approved after taking into consideration, the techno- economic report pertaining to the viability and feasibility of the plan. The plan is also put into operation since 18.04.2018, and as of now the Respondent No. 1 is an on-going concern. Though, the Respondent No.11 has taken up the plea that its offer was conditional, it has got a very minor share which may not be sufficient to impact by adding it with that of the appellant and Respondent No.7. The Respondent No.7 and the Respondent No.11 did not choose to challenge the order of the appellate tribunal.

63. We need to take note of the interest of over 23,000 shareholders and thousands of employees of the Respondent No.1. Now, about Rs. 300 crores has also been approved by the shareholders to be raised by the Respondent No.1. It is stated that about Rs. 63 crores has been infused into the Respondent No.1 to make it functional. There are many on-going projects of public importance undertaken by the Respondent No.1 in the nature of construction activities which are at different stages.

64. We remind ourselves of the ultimate object of the Code, which is to put the corporate debtor back on the rails. Incidentally, we also note that no prejudice would be caused to the dissenting creditors as their interests would otherwise be secured by the resolution plan itself, which permits them to get back the liquidation value of their respective credit limits. Thus, on the peculiar facts of the present case, we do not wish to disturb the resolution plan leading to the on-going operation of the Respondent No.1."

Company Appeal (AT) (Insolvency) No. 539 of 2022 14

10. The Hon'ble Supreme Court in its order made it clear that Resolution

Plan has to be implemented as the Corporate Debtor being a on-going

concern and Promoters have infused over Rs.63 crores. The Hon'ble

Supreme Court also noticed that interest of over 23,000 shareholders and

thousands of employees have to be taken care of. The observations made

by the Hon'ble Supreme Court is clear and categorical that Plan is required

to be implemented.

11. The submission of learned Counsel for the Appellant that order of

Adjudicating Authority excluding the period from 18.04.2018 to

18.01.2022 amounts to modification of the Plan, cannot be accepted. The

Adjudicating Authority has only excluded the period for implementation of

the Plan. Under the Plan, period was provided for implementation was ten

years, the exclusion was granted because of series of litigations, which were

initiated by the Lenders themselves, culminating into dismissal of Civil

Appeal filed by the Bank of Baroda before the Hon'ble Supreme Court. The

exclusion of the period during which litigations between the parties,

instituted by the Lenders was going on, is both just and fair. The Lenders,

who were throughout contending that the Resolution Applicant is ineligible

and they were challenging the approval order before the Appellant Tribunal

as well as before the Hon'ble Supreme Court, have no mindset to implement

the Resolution Plan. The learned Counsel for the Appellant has cited

judgment of the Hon'ble Supreme Court in Jaypee Kensington Boulevard

Apartments Welfare Association vs. NBCC (India) Ltd. - (2022) 1 SCC

401; Ebix Singapore Pvt. Ltd. vs. CoC of Educomp Solutions Ltd. -

Company Appeal (AT) (Insolvency) No. 539 of 2022 15 (2021) SCC OnLine 707; Committee of Creditors of Essar Steel India

Ltd. vs. Satish Kumar Gupta and Ors. - (2020) 8 SCC 531 and Pratap

Technocrats v. Monitoring Committee Reliance Infratel - (2021) 10

SCC 623 to support its contention that Resolution Plan cannot be modified

by the Adjudicating Authority, not it can be whittled down by the

Adjudicating Authority.

12. As observed above, present is not a case where Resolution Plan has

been modified by the Adjudicating Authority. The Adjudicating Authority

vide order dated 11.03.2022 has already granted extension by the

impugned order for the period from 18.04.2018 to 18.01.2022, which

period was taken in the litigation initiated by the Lenders themselves. It is

also relevant to notice that while approving the Resolution Plan on

18.04.2018, the Adjudicating Authority has granted exclusion of 106 days.

The Hon'ble Supreme Court in its judgment dated 18.01.2022 has

approved the exclusion on account of litigation and proceedings. We may

recapitulate paragraph 32 of the Hon'ble Supreme Court, which is to the

following effect:

"32. Both the forums have rightly construed the issue qua extension and exclusion. Admittedly, there were earlier rounds of litigation and proceedings were pending against the interim orders. This issue has also been concluded finally by this Court inter alia holding that in such a scenario exclusion has to be granted, in light of the time spent in litigation."

Company Appeal (AT) (Insolvency) No. 539 of 2022 16

13. When the Hon'ble Supreme Court in earlier round has approved the

exclusion of the period during which litigation were pending, no exception

can be taken to the exclusion of the period from 18.04.2018 to 18.01.2022

as directed in the impugned order by the Adjudicating Authority. The

learned Counsel for the Appellant submitted that it was the Respondent,

who did not cooperate in the implementation of the Plan and they have not

issued the NCD as per the due procedure, hence, the documents regarding

working capital were not executed by the Bank. Whereas, the Respondent

case is that it was the Appellant, who did not discharge its obligation under

the Plan and on the other hand the Respondent has discharged its

obligation by bringing Promoters' contribution to the extent of Rs.63 crores.

The learned Counsel for the Appellant submitted that Promoters'

contribution which was required to be brought up was about Rs.102 crores

and Rs.63 crores was not sufficient. Be that as it may, when the

substantial money was brought by the Promoters contribution, the Lenders

could have initiated the part of process, requiring the Promoters to bring

the balance money.

14. The object of the Code especially in a case where Resolution Plan has

been approved and which approval also received the confirmation from

Hon'ble Supreme Court, it is obligatory on all stake holders to initiate the

implementation of the Plan, trying to find excuses for refusal to implement

by either of the parties cannot be justified. All stake holders had to act in

a manner so as to implement the Resolution Plan. The Lenders cannot

absolve themselves from carrying out their obligation in the Resolution Plan

Company Appeal (AT) (Insolvency) No. 539 of 2022 17 by raising one or other pretext. The submission of the learned Counsel for

the Appellant that due to granting of extension of three years and nine

months in the implementation of the Plan, the Plan is no more viable,

cannot be accepted. Viability and feasibility of the Plan is required to be

considered at the stage when Plan is to be approved by the CoC. After the

Plan has been approved, the issue of viability and feasibility cannot be

allowed to be raised by the Appellant. The Adjudicating Authority did not

modify the Plan in any manner and exclusion of the period from 18.04.2018

to 18.01.2022, cannot be said to be any kind of modification in the Plan.

15. In the Insolvency and Bankruptcy Board of India (Insolvency

Resolution Process for Corporate Persons) Regulations, 2016, under

Regulation 39, sub-regulation (9), a creditor is allowed to apply to

Adjudicating Authority for direction in case there is any non-

implementation of the Resolution Plan. At no point of time, the Appellant

made an application praying for any direction to the Resolution Applicant

towards implementation of the Plan alleging any non-implementation. It

was the Resolution Applicant, who had filed application for contempt

against the Bank and thereafter I.A. No.(IB)626/KB/2021 praying for

direction to the Appellant. The directions, which have been issued by the

Adjudicating Authority in paragraph 11 as noted above, are directions,

which were required to be undertaken by the Lenders and directions issued

by the Adjudicating Authority are in accordance with the Resolution Plan.

No exception can be taken to the directions issued in paragraph 11. The

Lenders and Banks are obliged to discharge their obligations as per the

Company Appeal (AT) (Insolvency) No. 539 of 2022 18 Resolution Plan. The fact that directions have been issued to the Appellant,

cannot mean that Resolution Applicant is not to perform its obligation as

per the Resolution Plan.

16. The learned Counsel for the Appellant has submitted that

Respondent has not cooperated with forensic audit. The learned Counsel

for the Respondent submits that although carrying out forensic audit was

not part of the Resolution Plan, but Bank itself has got conducted the

forensic audit in which audit Report no adverse findings were given against

the Resolution Applicant. Hence, conducting the forensic audit again and

again cannot be a ground for the Appellant to refuse the implementation of

the Resolution Plan. The learned Counsel for the Respondent further

submits that Hon'ble Supreme Court in its order dated 26.10.2021

recorded that the issue of forensic audit stood addressed.

17. The learned Counsel for the Resolution Applicant has undertaken to

perform all its obligations under the Plan as and when it arises according

to the Resolution Plan. Recording the aforesaid statement of the Resolution

Applicant, we are of the view that there is no ground to interfere with the

impugned order passed by the Adjudicating Authority, which order is

clearly in aid of implementation of the Resolution Plan. The

implementation of the Resolution Plan being obligation and duty of all stake

holders as per the scheme of the IBC, as observed above, the Resolution

Applicant shall also carry out its obligation under Resolution Plan

promptly, while the Lenders will discharge their obligations in the Plan and

as per directions issued in the impugned order by the Adjudicating

Company Appeal (AT) (Insolvency) No. 539 of 2022 19 Authority. We, while upholding the impugned order also direct the

Resolution Applicant to carry out its obligations in the Resolution Plan

along with carrying out all the obligations by the Lenders. Subject to above,

the Appeal is dismissed. No order as to costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

23rd May, 2023

Ashwani

Company Appeal (AT) (Insolvency) No. 539 of 2022 20