Resolution Applicant Who Participated In The Process Has Locus To Object The Application For Approval Of Resolution Plan: NCLAT Delhi

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that a resolution applicant who has participated in the process, has locus to object the application filed by Resolution Professional under Section 30(6) of IBC for approval of resolution plan submitted by another resolution applicant. Background Facts VOVL Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) on 08.11.2019 by the NCLT. PRIO S.A. (“Appellant”) submitted a resolution plan to the Resolution Professional for the Corporate Debtor. The Resolution Professional asked the Appellant to revise the plan at three instances and the same was done. However, the Resolution Professional did not revert to the Appellant after receipt of third revised plan dated 21.11.2022. On 05.07.2023, the Resolution Professional filed an application under Section 30(6) of IBC seeking approval of resolution plan submitted by BPRL Ventures BV (“Respondent No.2”). The Appellant filed intervention application in the plan approval application filed by the Resolution Professional. The NCLT vide order dated 09.10.2023 rejected the intervention application citing that the Appellant has no locus to file the same and none of its rights have been infringed. The Appellant filed an appeal before the NCLAT against the order dated 09.10.2023. NCLAT Verdict The Bench observed that the Appellant, who participated in the CIRP cannot be said to be a person having no locus to object the Application filed by the Resolution Professional for approval of plan submitted by Respondent No.2. It was noted that the Appellant submitted its offer after receipt of Expression of Interest, revised the offer, and also negotiated with Committee of Creditors (“CoC”) and Resolution Professional. The Respondent No. 2 exercised its Right of First Refusal and its resolution plan was approved by CoC. Since the Appellant participated in the process, it has locus to object the application filed for approval of resolution plan. “The RP and CoC interacted with the Appellant in respect of its offer and it appears that on the basis of the offer submitted by the Appellant Right of First Refusal was exercised by Respondent No.2 and consequently offer was received from Respondent No.2, which find favour by the CoC. The Appellant, who participated in the process cannot be said to be a person having no locus to object the Application filed by the RP for approval of offer submitted by Respondent No.2.” The Bench held that since the Appellant had participated in the CIRP, it has every right to raise question arising from such CIRP. “The intervention which was sought by the Appellant was intervention arising in relation to the Corporate Insolvency Resolution Process (“CIRP”) of the Corporate Debtor. The objections raised by the Appellant challenging the process and prayer for deciding the objection on merits, is entirely different from locus of the Appellant. In the facts of the present case and sequence of events, it cannot be said that the Appellant has no locus to file Intervention Application, in a Application, which was filed by the RP for approval of offer of Respondent No.2. The natural consequence of filing of the IA by RP was that offer of the Appellant was not acceptable and CoC approved the offer of Respondent No.2 and consequently, approval was sought from the Adjudicating Authority. The Appellant, who had participated in the process has every right to raise question, which arise from CIRP of the Corporate Debtor. We, thus, are of the view that finding of the Adjudicating Authority that the Appellant has no locus, cannot be sustained.” While allowing the appeal the Bench held that the Appellant has locus in the matter and the Intervention Application filed by the Appellant ought not to have been rejected by the NCLT. The NCLT has been directed to grant an opportunity be given to the Appellant to make his submissions on the plan approval application. Further, the Appellant has been permitted to file objections to the application filed under Section 30(6) of IBC. Case title: PRIO S.A. v Mr. Pravin R. Navandar & Ors. Case No.: Company Appeal (AT) (Insolvency) No.1650 of 2023 Counsel for Appellants: Mr. Arun Kathpalia, Sr. Advocate with Mr. Siddharth Ranade, Ms. Nishi Bhankharia, Ms. Bani Brar, Mr. Kshitij Wadhwa, Mr. Mihir Dalawai, Mr. Pushkar Deo, Mr. Vishal Pathak, Mr. Vivek Krishnani, Mr. Shourya Bari, Advocates. Counsel for Respondent: Mr. Ramji Srinivasan, Sr. Advocate with Mr. Gaurav Juneja, Mr. Vishnu Shriram, Ms. Swastika Chakravarti, Ms. Muskan Narang, Mr. Kartik Pandey, Ms. Namrata Saraogi, Advocates Mr. Sajan Poovayya, Sr. Advocate with Ms. Anindita Roychowdhury, Ms. Trisha Click Here...

Resolution Applicant Who Participated In The Process Has Locus To Object The Application For Approval Of Resolution Plan: NCLAT Delhi

Pallavi Mishra

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