NCLAT Delhi: Resolution Applicant not Allowed to submit Revised Plan, After Adoption of Swiss Challenge Method

NCLAT Delhi: Resolution Applicant not Allowed to submit Revised Plan, After Adoption of Swiss Challenge Method

The National Company Law Appellate Tribunal (for short NCLAT), Principal bench through its division bench comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), while adjudicating an appeal filed in Jindal Stainless Ltd. vs. Mr. Shailendra Ajmera and another, ruled that after adoption of Swiss Challenge Method to find out the best plan Resolution Applicant cannot be allowed to submit a revised plan.

The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench vide order dated 10 November, 2021 initiated Corporate Insolvency Resolution Process (in short CIRP) against Mittal Corp Ltd and others- corporate debtor/ respondents. Mr. Shailendra Ajmera was appointed as the Resolution Professional.

The Resolution Professional received six resolution plans for the Corporate Debtor including plans from appellant- Jindal Stainless Ltd. and Shyam Sel and Power Ltd.- respondent no. 2. All the Resolution Applicants were communicated the rules of the Challenge Process and after receipt of the unconditional acceptance, Challenge Process was conducted in the 13th Committee of Creditors (in short CoC) meeting held on 15 July, 2022.

The Adjudicating Authority vide an order dated 11th August, 2022, directed the CoC to consider the revised resolution plan of Shyam Sel and Power Ltd. and take an informed decision. In fulfillment of the said Order, the Resolution Professional halted the voting process which was ongoing. Jindal Stainless Ltd. filed an appeal before NCLAT against the Order paased by the Adjudicating Authority.

The issue before the NCLAT was whether after closure of Challenge Process on 15th July, 2022 and consequent receipt of Resolution Plan by 18th July, 2022, the Adjudicating Authority could have directed for consideration of the revised plan submitted by Shyam Sel and Power Ltd. thereafter?

The NCLAT referred the judgment passed by the Hon'ble Supreme Court in Ngaitlang Dhar vs. Panna Pragati Infrastructure Private Limited and others (2020) and held that after adoption of Swiss Challenge Method to find out the best plan, one Resolution Applicant cannot be allowed to submit a revised plan.

"It is well settled that the timeline in the IBC has its salutary value and it was the wisdom of the CoC which decided to vote on the Resolution Plan after completion of Challenge Process and not to proceed to take any further negotiation or further modification of the plan, that decision ought not to have been interfered with," the Appellate Tribunal observed.

The Application was filed by Shyam Sel and Power Ltd. on 7th August, 2022, when CoC had already resolved the vote on all the plans and voting had also commenced with effect from 7th August, 2022.

The Bench set aside the Order dated 11th August, 2022 passed by the Adjudicating Authority. Further, the Resolution Professional has been directed to initiate fresh voting process on the Resolution Plans received in the process which may be contemplated within the period of one month.

Accordingly, the Appeal was disposed off.