Since CoC Is Re-Constituted Post Approval Of Plan, It Must Be Again Examined By The New CoC: NCLAT Delhi
The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Naresh Salecha (Technical Member), while adjudicating an appeal filed in Dauphin Cables Pvt. Ltd. v Praveen Bansal Resolution Professional & Ors., has held that when the Committee of Creditors (CoC) is re-constituted post approval of a resolution plan, due...
The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Naresh Salecha (Technical Member), while adjudicating an appeal filed in Dauphin Cables Pvt. Ltd. v Praveen Bansal Resolution Professional & Ors., has held that when the Committee of Creditors (CoC) is re-constituted post approval of a resolution plan, due to recategorization of a creditor, then the approved resolution plan must be placed again before the reconstituted CoC for its consideration.
BACKGROUND FACTS
M/s Abloom Infotech Pvt. Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”).
Chandgi Ram Real Estate Consultant Pvt. Ltd. (“CRREC”) is a creditor of the Corporate Debtor, which was previously classified as Financial Creditor and formed part of the Committee of Creditors (“CoC”). A Resolution Plan was submitted for the Corporate Debtor which was approved by the CoC.
On 14.02.2023 the NCLT passed an order whereby CRREC was now classified as “other creditors” and not as “Financial Creditor” and was no more a part of the CoC.
Consequently, the NCLT vide an order dated 01.03.2023 directed re-structuring of the composition of CoC in view of CRREC’s exit and re-examination of the Resolution Plan by the newly constituted CoC.
Dauphin Cables Pvt. Ltd. (“Appellant”), being a shareholder of the Corporate Debtor, filed an appeal before the NCLAT against the order dated 01.03.2023. It was argued that NCLT has directed reconsideration of the resolution plan by the CoC, whereas, there have been several orders intervened between that and those orders are not being complied with.
NCLAT VERDICT
The Bench observed that the order dated 01.03.2023 is a consequential order to the earlier order dated 14.02.2023. Since one Financial Creditor is going out of the CoC, the CoC has to be re-structured and the already approved resolution plan must be re-examined by the re-constituted CoC.
“The order dated 01.03.2023 is only consequential order to the earlier order dated 14.02.2023 in view of the one Financial Creditor going out of the CoC, the CoC has to be re-structured and the CoC has to be re-examine the plan which was earlier considered by the CoC. We do not find any infirmity in the order so as to entertain this Appeal.”
The appeal has been dismissed.
Case Title: Dauphin Cables Pvt. Ltd. v Praveen Bansal Resolution Professional & Ors.
Case No.: Company Appeal (AT) (Insolvency) No. 634-636 of 2023
Counsel for Appellant: Mr. Abhimanyu Bhandari, Mr. Manish Paliwal, Ms. Megha Yadav, Advocates.
Counsel for Respondent: Mr. Mohit Jolly, Ms. Veenu Drall, Advocates for R-1 Dr. Farrukh Khan, Utkarsh Kulvi, Yashi Sharma, Advocates for R-2 Mr. Vipul Ganda, Ms. Guresha Bhamra, Ms. Abhipsa Mohanty, Ms. Priyanka, Advocates for R-3.