Boorugu Infra Projects Private Limited In Consortium With Vishwanath Projects Limited & Anr. vs Birendra Kumar Agarwal & Anr.

(Per: Justice Sharad Kumar Sharma, Member (Judicial)

These are 2 Company Appeals being Company Appeal (AT)(CH)(Ins) No. 342/2024, and Company Appeal (AT)(CH)(Ins) No.343/2024, as they are emanating from the Company Petition (IB) No. 296/7/HDB/2022, though from the orders independently passed on different Interlocutory Applications, but since factually the issue remains the same, they are being decided together. In order to, better elucidate the controversy we would be dealing with the facts of each of the Appeals independently.

Company Appeal (AT)(CH)(Ins) No. 342/2024, arises from the Impugned Order of 13.06.2024, as rendered on Intervention Application being IA No.20/2024, it was preferred in Company Petition (I.B) No. 296/7/HDB/2022, by virtue of the Impugned Order under challenge the application thus preferred by the Appellant has been rejected, on the ground since that in the Resolution Process, as the Applicant/Appellant herein had participated and has been determined as to be an unsuccessful Resolution Applicant, they have been held to be having no locus standi as such to become a party to the proceedings, which has been filed for the purposes of approval of the Resolution Plan under Section 30 of I & B Code.

The Appellant, to the Appeal had factually submitted that, the Appellant claims to have been incorporated as a joint venture organisation between applicant No.2 and ‘Vishwanath Projects Limited’ pursuance to their incorporation, and consequent business failure, a proceedings for initiation of the CIRP Proceedings, against the Corporate Debtor stood initiated by an order passed on 18.07.2023. After the company, Corporate Debtor being brought into the CIRP Proceedings the Respondent No.1 i.e., The Resolution Professional is said to have issued (Form-G) consequentially inviting expression of interest and for which the last date fixed was 22.10.2023. In pursuance to the initiation of expression of interest made by an order of 22.09.2023, the (Form-G) was published and the Appellant admittedly had submitted its expression of interest to Respondent No.1. The scrutiny of expression of interest being submitted had furnished the provisional list of Provisional Resolution Applicants along with the information memorandum with respect to the Corporate Debtor and with respect to the details of individual eligibility of the Prospective Resolution Applicants.

On 04.02.2024, the Appellant had submitted the Resolution Plan for a value of INR. 310,40,00,000 plus with the simple interest payable on it at the rate of 12% and also on deferred payment for 5 months. All the Resolution Plans which were, thus submitted before the Respondent No.1, were placed before the Committee of Creditors for their consideration and in the meeting of Committee of Creditors, which was held on 09.02.2024. In the meeting it was thus held that certain modifications were suggested to be carried in the Resolution Plan given by the Appellant and for which the Appellant was granted time to carry out the necessary modifications and to submit the revised Resolution Plan on or before 06.03.2024. The Respondent No.1 is shown to have been approached by the Appellant informing, that each of the Perspective Resolution Applicants are also proposing to submit the revised Resolution Plan for its reconsideration, so as to ensure and include the 100% repayment could be ensured to the Secured Financial Creditors and in addition to, the Revised Resolution Plan of certain Perspective Resolution Applicants and had also offered to distribute the available cash balance of the Corporate Debtor, in favour of the Secured Financial Creditors. For the purposes of considering the contents of the revised Resolution Plan a meeting was convened of the Committee of Creditors, in the absence of the other members of the Committee of Creditors. But, however, the processing and reconsideration of the Resolution Plan was extended, for its resubmission of the revised final Resolution Plan till 31.03.2024, However, the Appellant has sought certain clarifications wide his communication, of 07.03.2024, and on the aforesaid intervening communications on 13.03.2024, the Respondent extended the time granted for submission of the revised final Resolution Plan until 18.03.2024.

It is the case of the Appellant that, they have submitted the Revised Resolution Plan also on 18.03.2024, wherein a value of INR 3,30,21,00,000 payable, along with the interest, on the deferred payment, was the proposal which was offered by the present Appellant. However, the revised Resolution Plan as it was submitted by the present Appellant on 18.03.2024, was placed before the Committee of Creditors for its consideration and in its meeting held on 28.03.2024, the Appellant’s plan was rejected. While on the contrary, the Respondent No.1 had furnished the copy of the approved Resolution Plan in its 10^th Committee of Creditors Meeting and the Resolution Plan stood approved in favour of M/s Lulu International Shopping Malls Private Limited, After the approval of the Resolution Plan as submitted by M/s Lulu International Shopping Malls Private Limited, no right whatsoever subsisted as such for the Appellant to seek an intervention in the process of approval of the Resolution Plan and also in the consequential process being taken thereafter while acting upon the Resolution Plan which stood admitted by the 10^th Committee of Creditors meeting which was held on 09.04.2024.

The Appellant filed an intervention application on 04.06.2024, seeking themselves to be impleaded, simultaneously an independent IA No. 08/2024, was also filed by Respondent No.1, before the Ld. Adjudicating Authority for the approval of the Resolution Plan, as given by Respondent No.2.

The Appellant had also simultaneously filed an IA No.1229/2024, raising certain objections as against the approval and process of the approval, of the Resolution Plan of Respondent No.2, i.e., M/s Lulu International Shopping Malls Private Limited. But the application for intervention and the application for filing of an objection being I.VN. No. 20/2024 and IA No. 1229/2024, has been rejected by the Ld. Tribunal by the Impugned Judgment of 13.06.2024, holding thereof that no intervention application or an objection to process if approval of Resolution Plan could have been preferred by the Appellant, owing to the fact that the revised Resolution Plan which was submitted by the Appellant, it stood rejected on 28.03.2024, and the said order of rejection of the Resolution Plan has attained finality. Consequent to the rejection of the Intervention Application the Appellant has filed the Instant Company Appeal, wherein they have prayed for the following reliefs: -

The said application has been rejected by the Impugned Order of 13.06.2024, against which the Appeal has been preferred through Ms. Lilly Francis, as counsel on Record to the Appeal. Initially the Appeal was accompanied with Condone Delay Application and the same was ‘Allowed’ by an order of 18.09.2024, and the delay was ‘Condoned’ and the Respondents were called upon to file their Counter Affidavit.

The matter ever since then remained pending till it was listed today for orders. The Ld. Counsel for the Appellant, addressed the Appeal on merits. It is a settled principle of law that once a Resolution Plan has submitted by a perspective Resolution Applicant, and the same has been considered by the Committee of Creditors and rejected and when the rejection order is not put to challenge, the result would be that no legally enforceable right stands crystallised in favour of the Prospective Resolution Applicant, to get himself impleaded in the proceeding drawn by the Resolution Professional, for approval of the Resolution Plan, before the Ld. Adjudicating Authority. Owing, to the fact that there is no legally vested right available with the Appellant, to prefer an appeal, as against the process of the approval of the Resolution Plan even or as against the order of rejection of the Intervention Application seeking themselves to be impleaded in the Company Petition (I.B) No. 296/9/HDB/2022, we are of the view, that we need not to even venture into the complexities of the matter and after having perused the order, since the Applicant himself was admittedly determined as be an unsuccessful Resolution Applicant. The rejection of the of the intervention Application was rightly made because the Appellant was not even required to be heard even at the consideration of approval of the stage when the Resolution Plan is placed before the Ld. Adjudicating Authority for its approval.

The learned counsel for the appellant had submitted that there are various grounds on, which he can questioned the propriety of the process of approval of the Resolution Plan, which has been adopted by Respondent No.1 by filing of an application before the learned Adjudicating Authority and particularly with regards to the compliance of the provisions of Section 30(2)(6) of I & B Code, 2016. As far as, the aspect pertaining to Section 30 (2) of I & B Code, it would be absolutely falling within the domain of the learned Adjudicating Authority to determine as to whether the approved Resolution Plan by the COC falls to be within the parameters prescribed therein, as that contained in clause A & B of Section 30(2). Ensuring the satisfaction of those conditions is a prerogative of the tribunal and not a right of the Appellant to ensure its compliance, particularly when the plan of the has Appellant already been rejected as their rights are not at all to be affected at the stage when the mechanism prescribed under section 53 of I & B Code, was to be resorted to. Hence the appeal lacks merit and the same

would stand dismissed. 2. The Company Appeal (AT) (CH) (Ins) No. 343/2023 is listed along with IA No. 1195/2024, whereby the successful resolution applicant M/s Lulu International shopping malls Private Limited, had sought their Impleadment in the Appeal. Having considered the fact that their plan already stands approved and if any orders are likely to be passed in the instant appeal their rights are likely to be affected, the IA No. 1195/2024, would stand allowed, the applicant intervener M/s Lulu International shopping malls Private Limited, is being permitted to intervene in the appeal. The Appellant herein, who is also the appellant of the appeal already decided by the aforesaid part of today's judgment who has put a challenge to the order passed on IA No. 1229/2024, as rendered in CP(IB)No. 296/7/HDB/2022. The factual part as far as the instant appeal is concerned, the same will remain similar up to the stage of filing of the application IA No.1229/2024, preferred by the appellant who has already been dealt with the above, and has been determined as to be an unsuccessful Resolution Applicant and whose Intervention Application has been rejected. Owing to the fact that the Appellant's Intervention Application has been rejected and its rejection has been affirmed by the Judgment rendered in Company Appeal AT CH (Ins) No. 342/2024 as decided today the limited question which would be required to be venture is as to whether, at all the Company Appeal AT CH (Ins) No. 343/2024, preferred by the Appellant whose intervention has been rejected as against the decision rendered on IA No. 1229/2024, could at all put a challenge to the process of approval of the Resolution Plan, is to the effect that since the appellant has got no locus standi and their Intervention Application has already been rejected. As such the relief sought for in IA No. 1229/2024, as against the approval of the Resolution Plan, it as stood submitted by the newly impleaded Respondent M/s Lulu International shopping malls Private Limited, the same cannot be questioned by the present appellant hence the appeal at their behest as against the process of the approval of the Resolution Plan would not be tenable the same would too stand dismissed.

Ultimately it could be concluded that in both the appeals since: