FACTS OF THE CASE:
- Maharashtra Seamless Limited (“MSL”) was the Resolution applicant for the Corporate Debtor United Seamless Tubular Private Limited whose plan was approved by 87% vote of CoC.
- Corporate Debtor has the total financial debt of Rs. 1897 crores, and Operational Debt of 2.50 Crore.
- Adjudicating Authority, the National Company Law Tribunal on 21st January, 2019 approved the Resolution Plan of MSL in an application filed by the Resolution professional.
- MSL offered upfront payment of Rs. 477 Crores.
- AA while giving approval of the resolution plan was of finding that the said plan met all the requirements of section 30 (2) of the Code.
- The said order was carried up before NCLAT by Padmanbhan Venkatesh & Indian Bank.
- Another appeal was made by MSL seeking directions for Hon’ble NCLAT to give directions to Superintendent of Police and Collector for execution of the Resolution Plan.
- The application was disposed off as the NCLAT was of view that the Superintendent of Police and Collector cannot be given any direction for the execution of the plan as the bid amount was not deposited by the Resolution Applicant, rather the directions to be given to the directors to cooperate with the Resolution applicant.
- The NCLAT in other appeals by directed to resolution applicant to increase the bid amount by Rs. 120 crore within 30 days then only his plan will be approved by Adjudicating Authority and will hand over the assets of CD.
- Meanwhile other application was made by resolution applicant for withdrawal of the resolution plan u/s 12 A as he has deposited the amount of Rs 477 crores and the same has been due to the delay in execution of plan they have to bear the interest.
- The case was taken before the Hon’ble Supreme court by Resolution Applicant.
- Whether the bid amount should exceed the Liquidation Value?
- If the CoC has approved the plan from a majority of 87 % of votes, the plan can be rejected by the Adjudicating Authority?
- Whether the resolution applicant can withdraw the resolution plan under section 12A?
The Hon’ble Supreme court have held that:
- There is no provision under Insolvency and Bankruptcy Code, 2016 which provides that the bid amount should match the liquidation value.
- The plan was approved by 87 % of vote of CoC and commercial wisdom of CoC cannot be challenged by AA or NCLAT.
- AA has to approve the plan if it satisfies that the plan is feasible and viable under section 30 (2) of the IBC, and there is no judicial power to review the plan once it is approved by and conforms to Section 30.
- The Resolution Applicant cannot withdraw his plan under Section 12 A of the Code.
- Further the Resolution Professional was directed to handover the physical assets of CD to MSL within four weeks.
- The police and administrative authorities are directed to render assistance to the Resolution Professional to enable him to carry out these directions.
Click here to read full judgement: Maharashtra Seamless Limited VS. Padmanabhan Venkatesh & Ors.