The National Company Law Appellate Tribunal (NCLAT) on Wednesday set aside the order of National Company Law Tribunal (NCLT) that approved the bid of Anil Agarwal’s Twin Star Technologies for Videocon Group.
NCLAT observed that the resolution plan did not fulfil the requirements of the insolvency and bankruptcy code (IBC). Dissenting creditors had appealed to NCLAT against the resolution plan.
The two-member Bench of Justice Jarat Kumar Jain and Justice Ashok Kumar Mishra said, “The approval of the resolution plan is not in accordance with Section 31 of the Code.” Accordingly, the approval for the resolution plan by the Committee of Creditors (CoC) as well as NCLT is set aside.
“The matter is remitted back to CoC,” NCLAT added.
SC ruling
The latest order by NCLAT comes little over three months after the Supreme Court held that a CoC-approved resolution plan submitted to the NCLT cannot be modified or withdrawn as it would create another tier of negotiation. The submitted resolution plan is binding and irrevocable, the apex court had ruled.
Creditors’ objections
In June last year, NCLT had approved Twin Star Technologies’ bid to take over Videocon Industries for ₹2962 crore. But in the following month NCLAT stayed the bid over pleas filed by two dissenting creditors, Bank of Maharashtra and IFCI.
The petitioners, at that time, had raised the issue of possible breach of confidentiality of the liquidation value during the insolvency process. The plan provided ₹2900 crore for admitting liability of nearly ₹62000 crore.
In light of the NCLAT order on Wednesday Gopal Jain, advocate on behalf of Twin Star Technologies, said, “We learnt about the order and it will further delay Videocon’s resolution. We are awaiting the written order and will, thereafter, take appropriate action.”