Case Note & Summary
The appeal was filed by RBL Bank Limited against the order of the National Company Law Tribunal (NCLT), Chennai, which had approved the resolution plan for Sical Logistics Limited. RBL Bank, a financial creditor, was not included in the Committee of Creditors (CoC) by the Resolution Professional (RP), Mr. Sripatham Venkatasubramanian Ramkumar. The RP had determined the voting shares based on incorrect financial debt amounts, excluding RBL Bank's claim. The NCLAT held that the RP's actions were contrary to the Insolvency and Bankruptcy Code, 2016 (IBC), and directed the CoC to reconsider the resolution plan with RBL Bank as a member and with corrected voting shares. The Tribunal set aside the NCLT order and remanded the matter for fresh consideration.
Headnote
A) Insolvency and Bankruptcy Code - Committee of Creditors - Inclusion of Financial Creditor - Section 21(2) IBC, 2016 - The RP must include all financial creditors in the CoC based on the financial debt owed to them. Failure to do so vitiates the CIRP process. (Paras 10-15) B) Insolvency and Bankruptcy Code - Voting Share - Determination - Section 21(8) IBC, 2016 - The voting share of a financial creditor is determined by the proportion of its financial debt to the total financial debt of the corporate debtor. The RP's incorrect calculation of voting shares led to an erroneous approval of the resolution plan. (Paras 16-20) C) Insolvency and Bankruptcy Code - Resolution Plan - Approval - Section 30(2) IBC, 2016 - The CoC's approval of a resolution plan without the participation of a rightful financial creditor is invalid and must be reconsidered. (Paras 21-25)
Issue of Consideration
Whether the Resolution Professional (RP) erred in not including RBL Bank as a member of the Committee of Creditors (CoC) and in determining the voting share, and whether the approval of the resolution plan by the CoC without RBL Bank's participation is valid.
Final Decision
The NCLAT allowed the appeal, set aside the NCLT order, and directed the CoC to reconsider the resolution plan with RBL Bank as a member and with corrected voting shares.
Law Points
- Resolution Professional's duty to include all financial creditors in CoC
- Voting share determination based on financial debt
- CIRP regulations
- Section 30(2) IBC
- Section 60(5) IBC
