The National Company Law Appellate Tribunal (NCLAT) has upheld the 2019 Resolution Plan of Adani Power's bid for Korba West Power and has asked Shapoorji Pallonji & Co to pursue arbitration proceedings for pending claims.
A two-member NCLAT bench said "there is no illegality in the order of the approval of the resolution plan by the Adjudicating Authority (NCLT) and it does not see any reason to set aside the resolution plan by Adani Power.
The appellate tribunal was deciding over a petition filed by Shapoorji Pallonji & Co, against an order passed by the Ahmedabad Bench of the National Company Law Tribunal (NCLT) on June 24, 2019 approving the resolution plan by Adani Power.
Shapoorji Pallonji & Co has claims of Rs 45.22 crore and an arbitration was going for the same.
However, Korba West Power has itself triggered the Corporate Insolvency Resolution Process (CIRP) under section 10 of the Insolvency and Bankruptcy Code.
Following this, the company came under moratorium and the said arbitration proceedings could not proceed further and was stayed. Later Shapoorji Pallonji & Co claimed the amount as an operational creditor during the CIRP.
However, the said claim was rejected by the resolution professional, and the Adani Power plan was approved by NCLT.
After this Shapoorji Pallonji & Co moved the appellate tribunal challenging the order of NCLT approving the resolution plan of Adani Power.
During the proceedings, RP submitted before NCLAT that the claim of the appellant was rejected only after due verification. It further said Shapoorji Pallonji & Co's claim is the subject matter of a dispute and is pending determination in an Arbitration.
Over Shapoorji Pallonji & Co's claim that no written notice about its rejection was given, RP said it is required to give Notice to the 'Operational Creditors' only in case the aggregate dues is not less than 10 per cent of the 'debt' of the 'Corporate Debtor'.
In the instant case, the aggregate amount of the 'Operational Debt' was merely 6 per cent of the admitted 'Claims' of the 'Corporate Debtor'.
While Adani Power said CIRP was conducted in a fair manner and its resolution plan was approved by a majority of 69 per cent.
NCLAT further said it is also not in dispute that the RP did not communicate to Shapoorji Pallonji & Co in writing regarding the rejection of the claims. However, it has uploaded the status of the claims on the website of the ‘Corporate Debtor’ first on March 7, 2019 and then on April 8, 2019.
"For all the foregoing reasons, we are of the considered view that there is no illegality in the Order of the ‘Approval of the Resolution Plan’ by the NCLT and we do not see any reason to set aside the Resolution Plan per se except for observing that the RP ought not to have made a ‘Contingent Provision’ with respect to the Appellant herein having regard to the specific facts of this case, which would be subject to the result of the Arbitration Proceedings," said NCLAT.
While disposing Shapoorji Pallonji & Co's appeal, NCLAT said: "liberty is being given to the Appellant herein to pursue all contentions available to them in the pending Arbitration Proceedings and the same be decided in the said proceedings on its own merits in accordance with law."
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