After Approval By The Adjudicating Authority, The Resolution Plan Is No More A Confidential Document: NCLAT

The NCLAT in a Bench comprising of Justice Ashok Bhushan (Chairperson) and Dr. Ashok Kumar Mishra (Technical Member) in Association of Aggrieved Workmen of Jet Airways (India) Limited v. Jet Airways (India) Ltd held that after approval of the Resolution Plan, the Plan does not remain a confidential document, so as to deny its perusal to a claimant, who is aggrieved by the Plan The Appellants herein are the Operational Creditors, an association of aggrieved workmen of Jet Airways (India) Ltd. and to whom a sum of Rs. 52 Crores was allocated in the Resolution Plan, of the Corporate Debtor/ Jet Airways and are seeking a copy of the Resolution Plan or any part of it. This appeal was filed by the Appellants, seeking to challenge the decision of the Adjudicating Authority approving the Resolution Plan. The question that arose for consideration before the Bench was whether the Appellant, who has filed an Appeal against the order of the Adjudicating Authority is entitled to a copy of the Resolution Plan or any part of it in these proceedings. Decision Of The NCLAT The Tribunal first noted the scheme of the Code and Regulations framed under it regarding confidentiality of certain information and reports including the Resolution Plan in the Corporate Insolvency Resolution Process proceedings. Process Under CIRP Proceedings After the public announcement of the CIRP, the Interim Resolution Professional has to collect all information relating to assets, finances and operations of the Corporate Debtor, receive and collate all claims submitted by the creditors; constitute a Committee of Creditors; and to perform other functions as enumerated in Section 18 of the Code. After appointment of Resolution Professional, he has to conduct the Corporate Insolvency Resolution Process including conducting of the meeting of the Committee of Creditors. Section 24 of the Code requires the Resolution Professional give notice of each meeting to the Committee of Creditors, including to operational creditors or their representatives if the amount of their aggregate dues is not less than ten per cent of the debt. After submission of the Resolution Plan, the Resolution Professional has to examine each plan and when he is satisfied that the requirements of Section 30(2) have been complied with, he shall present it to the Committee of Creditors for approval. As per Section 30(6), the Resolution Professional shall submit the Resolution Plan as approved by the COC to the Adjudicatory Authority. Section 31(3) further states that after the Resolution Plan has been approved, the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. Item No. 21 of the First Schedule of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulation, 2016, under the head 'Confidentiality' provides- An insolvency professional must ensure that confidentiality of the information relating to the insolvency resolution process, liquidation or bankruptcy process, as the case may be, is maintained at all times. However, this shall not prevent him from disclosing any information with the consent of the relevant parties or required by law. Section 24 of the IBC read with Regulation 21(3)(iii) of the Process Regulations 2016 makes it clear that the entitlement of copy of the documents during CIRP is for only those who participate in the process. The Tribunal referred to the decision of the Supreme Court in Vijay Kumar Jain vs. Standard Chartered Bank and Ors. wherein it was held that Members of suspended Board are entitled to participate in the meeting of Committee of Creditors and are also entitled to be given a copy of the Resolution Plan before such meetings are held. Since the Appellant was not entitled to participate in the meeting of the CoC, during CIRP they were not entitled to copy of the Resolution Plan. Distinguishing the present case from the Supreme Court decisions in Vijay Kumar Jain and Committee of Creditors of Meenakshi Energy Ltd. vs. Consortium of Prudent ARC Limited & Vizag Minerals and Logistics P Ltd., the Tribunal stated that the abovementioned cases were related to confidentiality of the Resolution Plan in ongoing CIRP proceedings, unlike in the present case where the Appellant seeks to challenge the Resolution Plan approved by the Adjudicating Authority. The Tribunal noted Rule 114 of the NCLT Rules 2016, sub-section (1) of which states that the parties or their authorized representatives may be allowed to inspect the record of the case. Sub-section (2) states that a person, who is not a party to the proceeding, may also be allowed to inspect the proceeding after obtaining the permission of Registrar in writing. Thus, when the Resolution Plan is submitted to the...

After Approval By The Adjudicating Authority, The Resolution Plan Is No More A Confidential Document: NCLAT

LIVELAW NEWS NETWORK

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

After Approval By The Adjudicating Authority, The Resolution Plan Is No More A Confidential Document: NCLAT

LIVELAW NEWS NETWORK

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers