National Company Law Appellate Tribunal | While deciding the appeal, Rakesh Kumar, J., and Dr. Ashok Kumar Mishra (Technical Member) held that the Adjudicating Authority can either approve or reject the resolution plan but cannot modify it.
In the case at hand, the Resolution Professional filed the resolution plan which was approved by the Adjudicating Authority with some modification. The appellants aggrieved with the modification challenged the impugned order before this Tribunal.
The appellant contended that once resolution plan is approved by the majority of Committee of Creditors (CoC) in its commercial wisdom and submitted before the Adjudicating Authority for approval, the Adjudicating Authority can either approve or reject the resolution plan.
The Tribunal observed that when a resolution plan is submitted before the Adjudicating Authority which is in compliance with Sections 30 and 31(1) of Insolvency Bankruptcy Code, 2016 (“the Code, 2016”), such resolution plan has to be approved by the Adjudicating Authority.
The Tribunal further stated that the Adjudicating Authority must be satisfied that the resolution plan has provisions for its effective implementation since the word “shall” has been incorporated in proviso of Section 31 of the Code, 2016. Further, Section 31(2) of the Code, 2016 empowers the Adjudicating Authority to reject the resolution plan, if it is satisfied that resolution plan is not in conformity with the requirements as referred to in Section 31(1) of the Code, 2016.
The Tribunal noted that the mandate of legislation is to either approve the resolution plan or to reject it. However, there is no provision for making alteration or modification in the resolution plan.
Hence, the Tribunal held that in view of the statutory provisions as contained in Section 31 of the Code, 2016 the Adjudicating Authority has exceeded its jurisdiction in modifying the conditions in the resolution plan.
Thus, the Tribunal allowed the appeal and held that the modifications in the impugned order may not be taken note of.
[Mathuraprasad C Pandey v Partiv Parikh, 2022 SCC OnLine NCLAT 1608, decided on 14-12-22]
Advocates who appeared in this case :
Counsel for Appellant:- Advocate Abhijeet Sinha, Advocate Ravi Pahwa, Advocate Aastha Mehta, Advocate Aditya Shukla, Advocate Prerana Mahapatra;
Counsel for Respondent:- Advocate Karan Valecha, Advocate Jamin R. Dave, Advocate PBA Srinivasan, Advocate Parth Tandon, Advocate Abhishek Sharma.