This appeal challenges the order dated 14/10/2021 passed by the National Company Law Tribunal (NCLT), Hyderabad Bench, Hyderabad, in IA No. 1114/2020 in C.P.(IB)/679/7/HDB/2018, which dismissed the application filed by the Resolution Professional (RP) under Section 31(1) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking approval of the Resolution Plan. The NCLT rejected the application because one of the co-resolution applicants was an Asset Reconstruction Company (ARC) and the NCLT believed that prior approval from the Reserve Bank of India (RBI) was required.
The Committee of Creditors (CoC) approved a Resolution Plan with a 98.70% majority vote in its 27th meeting held on 19/10/2020. The Adjudicating Authority (NCLT) rejected the Resolution Plan because one of the co-resolution applicants was an Asset Reconstruction Company (ARC). The NCLT believed that prior approval from the Reserve Bank of India (RBI) was required for the ARC to participate in the resolution process. The Appellant argued that the ARC was not proposing to acquire any equity shareholding and that the other co-resolution applicants would solely acquire the shareholding and run the business. The Appellant also argued that Section 238 of the IBC would prevail over the SARFAESI Act if there were inconsistencies. The NCLT relied on previous judgments stating
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CIRP initiated against…
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This appeal challenges the order dated 14/10/2021 passed by the National Company Law Tribunal (NCLT), Hyderabad Bench, Hyderabad, in IA No. 1114/2020 in C.P.(IB)/679/7/HDB/2018, which dismissed the application filed by the Resolution Professional (RP) under Section 31(1) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking approval of the Resolution Plan. The NCLT rejected the application because one of the co-resolution applicants was an Asset Reconstruction Company (ARC) and the NCLT believed that prior approval from the Reserve Bank of India (RBI) was required.
The Committee of Creditors (CoC) approved a Resolution Plan with a 98.70% majority vote in its 27th meeting held on 19/10/2020. The Adjudicating Authority (NCLT) rejected the Resolution Plan because one of the co-resolution applicants was an Asset Reconstruction Company (ARC). The NCLT believed that prior approval from the Reserve Bank of India (RBI) was required for the ARC to participate in the resolution process. The Appellant argued that the ARC was not proposing to acquire any equity shareholding and that the other co-resolution applicants would solely acquire the shareholding and run the business. The Appellant also argued that Section 238 of the IBC would prevail over the SARFAESI Act if there were inconsistencies. The NCLT relied on previous judgments stating
…CIRP initiated against…
Committee of Creditors…