NCLAT: Unsuccessful Resolution Applicant Cannot Challenge Resolution Plan Submitted And Approved In Extended EoI Timeline
NCLAT: Unsuccessful Resolution Applicant Cannot Challenge Resolution Plan Submitted And Approved In Extended EoI Timeline
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench, comprising Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member), has ruled that a fresh Form G is not required when modifications are made to the Invitation for Expression of Interest (EoI), provided that the EoI includes a clause allowing the Committee of Creditors (CoC) to extend the timeline for submitting the resolution plan.
The Tribunal further held that if a new resolution plan is submitted based on such an extension and later approved by the Adjudicating Authority, unsuccessful resolution applicants cannot challenge the approval if they also benefited from the extension and submitted revised plans.
The case involved the Corporate Insolvency Resolution Process (CIRP) of Indian Pulp and Paper Private Limited, which commenced on July 22, 2022. On February 13, 2023, the Resolution Professional (RP) communicated to all resolution applicants that they could submit revised plans within the extended timeline. Pinax Paper Mills Ltd., in consortium with Pinax Steel Industries Pvt. Ltd., submitted an EoI and was included in the list of Prospective Resolution Applicants (PRAs) published on February 23, 2023. Eventually, the CoC approved the resolution plan submitted by Pinax Paper Mills Ltd. and Pinax Steel Industries Pvt. Ltd., making them the Successful Resolution Applicant (SRA). However, the appellant, a competing resolution applicant, challenged their eligibility, arguing that Pinax Paper Mills Pvt. Ltd. had not originally submitted an EoI.
The appellant contended that since Pinax Paper Mills Pvt. Ltd. was not included in the list of PRAs published on November 14, 2022, the CoC could not have considered its resolution plan under Regulation 39(1B) of the CIRP Regulations. It further argued that under Regulation 36A(4-A), the RP was required to publish a fresh Form G when extending the EoI submission timeline and claimed that the process violated both Regulation 36A(4-A) and Regulation 39(1B).
In response, the respondents maintained that the CoC had decided to extend the timeline on July 7, 2023, and had communicated this to all resolution applicants on February 13, 2023. They emphasized that the appellant itself had benefited from the extension by submitting a revised resolution plan and therefore could not now challenge the process.
The Tribunal observed that Clause 6 of the EoI explicitly permitted the RP to extend the timeline with the CoC’s approval, making all resolution applicants aware of this possibility. It noted that while modifications to the request for resolution plans require the issuance of a fresh Form G, an extension of the timeline approved by the CoC does not. Furthermore, the Tribunal highlighted that the appellant had actively participated in the process without objecting to the extension and had submitted a revised plan. Therefore, it could not later claim to be aggrieved by the non-publication of a fresh Form G.
The Tribunal also pointed out that while the name of Pinax Paper Mills Pvt. Ltd. was not included in the first final list of PRAs, it appeared in the final list published on February 28, 2023, after the timeline extension. Consequently, the claim of a breach of Regulation 39(1B) was rejected.
Distinguishing this case from Ashdan Properties Pvt. Ltd. vs. Mamta Binani (RP of Rolta India Ltd.) & Ors. (2024), the Tribunal noted that in the present matter, a fresh list of PRAs was published after the extension, which included the name of the SRA. Therefore, the earlier precedent was not applicable.
Concluding its ruling, the NCLAT held that no material irregularity was committed by the RP that would justify setting aside the approval of the resolution plan under Section 61(3)(ii) of the Insolvency and Bankruptcy Code (IBC). The Tribunal reiterated that judicial interference in CoC-approved resolution plans should be minimal and dismissed the appeal.
