NCLAT dismisses appeal against Liquidation Order

NCLAT dismisses appeal against Liquidation Order

The National Company Law Appellate Tribunal held that the CoC could not be directed to consider a revised plan just because a bigger amount was offered

The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal against the liquidation order filed by the prospective Resolution Applicant.

The Principal Bench of the National Company Law Appellate Tribunal at New Delhi, comprising Justice A.I.S. Cheema and Mr V.P. Singh heard the matter titled M/s Unicon Buildtech v Aishwarya Mohan Gahrana, Resolution Professional.

The factual background is that Appellant – M/s Unicon Buildtech was the prospective Resolution Applicant for the Corporate Debtor – Durha Vitrak Private Limited and the Respondent was the Resolution Professional for it. The Resolution Plan submitted by the Appellant – Resolution Applicant was revised in view of the discussions with the Committee of Creditors (CoC) and the said revised resolution plan was to be discussed in the 6th CoC meeting. However, the Appellant – Resolution Applicant through an e-mail informed the Respondent – Resolution Professional, the unavailability of the Appellant's professional team for the presentation of the revised resolution plan.

The CoC did not consider the Appellant's request and proceeded with the prospect of liquidation by filing the same before the National Company Law Tribunal (NCLT), which passed the liquidation order.

The Appellant – Resolution Applicant contended that the Appellant was offering the Resolution Plan of ₹77 crore against total debt of ₹52 crore of the Corporate Debtor and, therefore, his plan was required to be considered. The Appellant further contended that the CoC and the Respondent – Resolution Professional acted arbitrarily to suit the vested interests of the creditors by acting in defiance of the objectives of the Insolvency and Bankruptcy Code, 2016.

The Tribunal went through the minutes of the CoC meetings and found that the Appellant – Resolution Applicant had on earlier occasion also filed a revised plan. It further found that CoC had considered the email sent by the Appellant asking for an extension of time but in its wisdom did not find it appropriate to give more time to the Appellant and rejected the Resolution Plan for reasons recorded.

The Tribunal noted that these were commercial decisions and further observed that the CoC could not be directed to consider a revised plan just because Appellant was offering a bigger amount.

The Tribunal, therefore, dismissed this appeal filed against the liquidation order by concluding:

"In this matter, Section 7 Application was admitted on 8th November, 2019 and the order of liquidation came to be passed on 31st May, 2021. Keeping Section 12 of the IBC in view and the time frame within which CIRP should be completed, we do not find the Appellant making out any case for us to entertain the Appeal if liquidation order has been passed."