NCLAT curbs RP's powers, seeks CoC justification for plan approval -Binani Cements

Published in news-legal May 23 2018 0
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NCLAT allows interlocutory application filed by Ultra Tech Cement Ltd. (‘UltraTech’), directs Resolution Professional (‘RP’) not to take any comment from one or other Resolution Applicant(s), and to ignore such step if already taken;

UltraTech alleged violation of Appellate Tribunal’s interim order by the RP wherein it was held that it will be open to the Committee of Creditors (‘CoC’) and the Adjudicating Authority to approve one or other Resolution Plan; Peruses Sec. 30(2) of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) to opine that a RP is required to examine each resolution plan to confirm whether it inter alia provides for payment of Insolvency Resolution Process costs, payment of Operational Creditors’ debts and management of the affairs of Binani Cements Ltd. (‘Corporate Debtor’) ; Observes that prima facie, in absence of any information through any source while scrutinizing the resolution plan u/s 30(2), the RP cannot hold or decide as to who is ineligible u/s 29A as no such power is conferred on the RP; States that the RP cannot disclose the resolution plan to any other person, including Resolution Applicant(s), who has submitted the resolution plan; Opines that “the resolution plan submitted by one or other Resolution Applicant being confidential cannot be disclosed to any competitor Resolution Applicant nor any opinion can be taken or objection can be called for from other Resolution Applicants with regard to one or other resolution plan”; Points out that the intention of the legislature is clear that the CoC while approving or rejecting one or other resolution plan should follow such procedure which is transparent; Remarks that “those who will watching the proceeding ..... are not mere spectator but may express their views to the CoC for coming to conclusion in one or other way”; Thus rules that the CoC should record reasons while approving or rejecting one or other resolution plan; Lastly, clarifies that Resolution Applicant is entitled to be present in the meeting of CoC when his resolution plan is being considered and may point out whether one or other person (Resolution Applicant) is ineligible in terms of Sec. 29A or not:
New Delhi NCLAT
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