Allow Cookies!
By using our website, you agree to the use of cookies
National Company Law Appellate Tribunal has rejected the appeal filed by Tata Steels against consideration of revised resolution plans in the insolvency process of Bhushan Power and Steels for upholding the right of resolution applicants to submit revised plans, and that of the Committee of Creditors (CoC) to update, amend, modify or annual resolution plans.
The order said that "all the eligible 'Resolution Applicants' are granted more opportunities for the purpose of revising its 'financial offers', even by giving more opportunity, is permissible in the Law. However, within the time period, only all such process should complete".
The appeal was termed “premature” and “uncalled for” by the tribunal as the approved resolution plan before NCLT was yet to be submitted by the Resolution Professional (RP). There was no decision taken by the Adjudicating authority regarding any of the “Resolution Plan”. Based on which Justice S.J.Mukhopadhyay who headed the Tribunal bench stated that they hold no cause of action against Tata Steel to prefer an appeal.
Initially, the objection of Tata Steel was against consideration of “belated” resolution plan which was submitted by Liberty House. Later, the objection was raised against the consideration of revised resolution plans submitted by JSW Steel. As on the original deadline of February 8, 2018, Tata has claimed to have submitted the highest bid. However, the CoC proceeded to consider the improved financial bids subsequently submitted by JSW Steel.
Tata has insisted that after submission of the original 'Resolution Plan', no 'revised financial offer' can be submitted as according to Tata, the 'Resolution Applicants' have no right to revise their bids endlessly and the 'Committee of Creditors' is not authorized to entertain fresh or revised bids without exhausting available bids.
Earlier, it had approached the NCLAT against the CoC considering the revised plans by bidders but the interface was declined by the Tribunal, and granted liberty to Tata Steels to revise its plans in an order passed in August 2018. Accordingly, it also submitted revised plans. Therefore, the NCLAT noted that it was not open to Tata Steels to contend that revised plans cannot be accepted.
Binani Cements Case judgment was referred where it said that improved financial offer(s) submitted by a 'Resolution Applicant is a continuation of its Resolution Plan already. "Submission of the revised offer is in continuation of the 'Resolution Plan' already submitted and accepted by the 'Resolution Professional'", the Tribunal had held in Binani Cements.
Quoting the SC decision in Arcelor Mittal case the bench also observed that resolution applicant had no vested right or fundamental right to have its 'Resolution Plan' considered or approved.
The NCLAT while referring clauses in process document has observed that "the 'Committee of Creditors' have absolute discretion but without being under any obligation to do so, update, amend or supplement the information, assessment or assumptions and right to change, update, amend, supplement, modify, add to, delay or otherwise annul or cease the 'Resolution Process' at any point".
As per the dates or other terms and conditions which were set out in the ‘Process Document’, the Resolution Plan can be modified. The CoC has the right to negotiate better terms with the Resolution Applicant to ensure value maximization.
Opening the sealed cover submitted by the Committee of Creditors, the Tribunal found that the plan submitted by JSW Steel was approved by CoC with 97.12 % votes. Recording this, the matter was remitted to the NCLT for passing appropriate order under Section 31. The RP was directed to submit the approved plan before the NCLT.
86540
103860
630
114
59824