2024 TaxPub(CL) 155 (NCLAT-
New Del)
CIRP REGULATIONS, 2016
Regulation
36B, Sub-Regulations 4 & 4A
Regulation 36B(4) only provides for request of resolution plan shall not
require any non-refundable deposit but where to check the apprehension of the
applicant, non-refundable deposit or a bank guarantee is required to be
submitted for the resolution plan.
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Resolution plan - Resolution plan of
appellant was not considered - Failure in submission of bank guarantee -
Allowability thereof
The Appellant who had submitted a Resolution Plan
which was not considered due to reason that he failed to submit the Bank
Guarantee as per RFRP. The said requirement was contrary to the Regulations and
plan of the Resolution Applicant ought to have been considered. Held:
The RFRP was fully in compliance with Regulation 36B(4A). The Counsel for the
Resolution Professional had rightly submitted that requirement of Bank
Guarantee was only for the purpose to consider seriousness of the Resolution
Applicants who were able to submit the Bank Guarantee. Appellant had never
complied with the said and had not challenged the RFRP at any stage, therefore,
appellant could not be allowed to contend that the said condition was not
correct.
REFERRED :
FAVOUR : Appeal dismissed
A.Y. :
IN THE NCLAT, PRINCIPAL BENCH,
NEW DELHI - LB
ASHOK BHUSHAN, CHAIRPERSON,
BARUN MITRA, TECHNICAL MEMBER & ARUN BAROKA, TECHNICAL MEMBER
Rakesh Ranjan v.
Fanendra Harakchand Munot & Anr.
Company Appeal (AT)
(Insolvency) No. 1352 of 2023 & I.A. No. 4807 of 2023
4 December, 2023
Appellant by: Akshay Sapre, Tabrez Malawat, Rupali Jain, Syed Hamza, Advocates
Respondents by: Rajat Sinha, Madhur Jhawar, Advocates for R-1 Nakul Mohta and Riya
Dhingra, Advocates for R-2
(Hybrid Mode)
Heard Learned Counsel for the
parties.
2. This Appeal has been filed against the Order, dated 18-7-2023 passed
by the National Company Law Tribunal, Mumbai Bench, Court-V by which I.A.
No. 2724 of 2022 filed by the Resolution Professional for approval of the
Resolution Plan has been allowed and the Resolution Plan submitted by the
Successful Resolution Applicant has been approved.
3. This Appeal has been filed by the Appellant who had also submitted a
Resolution Plan which was not considered due to reason that he failed to submit
the Bank Guarantee of Rs. 50 Lakhs as per RFRP.
4. Learned Counsel for the Appellant submits that the requirement of
Rs. 50 Lakhs of Bank Guarantee was not in accordance with Regulation 36B,
Sub-Regulation 4 and 4A of CIRP Regulations, 2016 since the said requirement
was contrary to the Regulations and plan of the Resolution Applicant i.e.
Appellant ought to have been considered.
5. Learned Counsel appearing for the Respondents refuting the
submissions of Learned Counsel for the Appellant submits that RFRP specifically
contains a condition for submission of Bank Guarantee of Rs. 50 Lakhs which was
never challenged by the Appellant.
6. Learned Counsel for the Resolution Professional has pointed that
even in effect the Appellant has written letter to the Canara Bank on 14-2-2022
that it shall submit a Bank Guarantee along with the Resolution Plan and at no
point of time the said clause of the RFRP was challenged by the Appellant and
when the plan has not been considered he has come up in this Appeal. It is
further submitted that Resolution Plan has been approved and has been fully
implemented, the amount distributed and this Appeal has virtually become
infructuous.
7. We have considered the submissions of Learned Counsel for the
parties and have perused the record.
8. The Appellant itself has pointed out the minutes of 09th CoC Meeting
held on 2-3-2022 where the Resolution Plan submitted by the Appellant was
considered. Following is the consideration by the CoC of the Resolution Plan
:--
'Discussion on
Resolution plan submitted by Mr. Rakesh Ranjan:
Chairman
requested authorised representatives of V Axis Structural Steels Pvt. Ltd. to
log out from the meeting.
Chairman
informed that as per the terms and conditions of the Request for Resolution
Plan, the prospective resolution applicant was required to submit a Bank
Guarantee of Rs. 50 Lakhs along with the resolution plan. However, Mr. Rakesh
Ranjan has not submitted such Bank Guarantee. Since he has not complied with
the terms stipulated in the Request for Resolution Plan, the resolution plan
submitted by him cannot be considered.
Mr. Rakesh
Ranjan requested the CoC to waive the requirement of bank guarantee and
consider the resolution plan submitted by him. He stated that he will submit
the bank guarantee after approval of the Resolution plan by the NCLT.
CoC stated
that such requirement cannot be waived. For the knowledge of Coe, the Chairman
highlighted below mentioned points observed in the documents submitted by Mr.
Rakesh Ranjan in respect of the sources of funds for implementation of the
resolution plan:'
9. The submission which has been pressed by learned Counsel for the
Appellant is that the condition for requiring to submit Rs. 50 Lakhs Bank
Guarantee was contrary to Regulation 36B(4) and (4A). Regulation 36-B(4) and
(4A) of Regulations, 2016 is as follows :--
'36-B.
Request for resolution plans.--...................
(4) The
request for resolution plans shall not require any nonrefundable deposit for
submission of or along with resolution plan.
[(4A) The
request for resolution plans shall require the resolution applicant, in case
its resolution plan is approved under subsection (4) of section 30, to provide
a performance security within the time specified therein and such performance
security shall stand forfeited if the resolution applicant of such plan, after
its approval by the Adjudicating Authority, fails to implement or contributes
to the failure of implementation of that plan in accordance with the terms of
the plan and its implementation [schedule I].
Explanation
I.--For the purposes of this sub-regulation,
'performance security' shall mean security of such nature, value, duration and
source, as may be specified in the request for resolution plans with the
approval of the committee, having regard to the nature of resolution plan and
business of the corporate debtor.
Explanation
II.--A performance security may be specified in
absolute terms such as guarantee from a bank for Rs. X for Y years or in
relation to one or more variables such as the term of the resolution plan,
amount payable to creditors under the resolution plan, etc.]'
10. The copy of RFRP which has been handed over by the Appellant
contains under the heading of 'Other Conditions', following two conditions are
as follows :--
'Bank
Guarantee to be submitted along with the Resolution plan; Rs. 50 Lakhs
Performance
Bank Guarantee to be submitted by the successful resolution applicant (whose
plan has been approved by the CoC): 10% of total amount proposed under
resolution plan.'
11. When we look into the Regulation 36-B(4) it only provides for
request of resolution plan shall not require any non-refundable deposit. In
RFRP there is no such clause which requires that Resolution Applicant has to
submit any non-refundable deposit. With regard to Regulation 36B(4A), RFRP
itself contains a condition as extracted above. Therefore, the RFRP was fully
in compliance with Regulation 36B(4A). Learned Counsel for the Resolution
Professional has rightly submitted that requirement of Bank Guarantee was only
for the purpose to consider seriousness of the Resolution Applicants who are
able to submit the Bank Guarantee of Rs. 50 Lakhs. Appellant has never complied
the said and has not challenged the RFRP at any stage, cannot be allowed to
contend that the said condition is not correct.
12. We have further noticed in 09th COC Meeting that Appellant has made
a request to CoC to waive the requirement of Bank Guarantee which was not
accepted by the CoC and Appellant having not complied with the terms of the
RFRP in submitting the plan, we do not find any illegality in the decision of
the CoC in not considering the Resolution Plan of the Appellant. Learned
Counsel for the SRA submits that plan has already been implemented and
distribution have been made.
In view of the above, we see no
reason to entertain this Appeal, the Appeal is dismissed.