The NCLT Kolkata Bench approves the resolution plan and dismisses the challenge brought by an unsuccessful resolution applicant.
National Company Law Tribunal (NCLT), Kolkata Bench held that an unsuccessful resolution applicant lacks locus standi to challenge the approval of a resolution plan by the Committee of Creditors (CoC) unless there is a breach of legal provisions; the Committee's decision is upheld as an exercise of its commercial wisdom.
In the matter of I.A. (IB) No. 969/KB/2024, the National Company Law Tribunal (NCLT) addressed the challenge by Dhansagar Dealers Private Limited, an unsuccessful resolution applicant, against the conduct of the Committee of Creditors (CoC) and the approved resolution plan of the successful resolution applicant. The applicant contended that the CoC's approval of the resolution plan was illegal and arbitrary, and sought the consideration of its revised plan and a challenge mechanism. The core issue was whether an unsuccessful resolution applicant had the standing to contest the approved resolution plan after its approval and the issuance of the Letter of Intent (LoI).
The Tribunal noted that the resolution plan had been approved unanimously by the CoC, with the successful resolution applicant's plan being favoured. The Tribunal found that the applicant was not entitled to challenge the plan's approval unless there was a breach of legal provisions. It was observed that the CoC's decision fell within its commercial discretion, and the applicant's plan, which was less favourable compared to the successful one, did not provide grounds for challenge. Consequently, the application was dismissed on the grounds of lack of locus.
In I.A. (IB) (Plan) No. 7/KB/2024, the Tribunal sanctioned the resolution plan submitted by Mr. Vikas Garg. The plan was approved by the CoC with 100% voting shares and was compliant with the Insolvency and Bankruptcy Code (IBC) and relevant regulations. The Tribunal reviewed the financial allocations and statutory compliance associated with the plan. It was noted that the plan's provisions, including the treatment of claims, extinguishment of pre-CIRP claims, and reliefs for past liabilities, were in accordance with the IBC and judicial precedents. The Tribunal granted specific reliefs while directing that other requests for consents, approvals, and waivers be addressed with the relevant authorities.
The order concluded with the approval of the resolution plan and the lifting of the moratorium. The Resolution Professional was discharged, and the resolution applicant was directed to adhere to statutory obligations. The application challenging the plan was dismissed, and the case was recorded for further compliance with the formalities.
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