Mumbai: A single bench of National Company Law Tribunal (NCLT), Kolkata on Tuesday ruled that the bids submitted by a resolution applicant after the bidding deadline need not be considered, a ruling that can set a benchmark for several other pending cases.
The tribunal also said the final decision to accept a resolution plan rests with the committee of creditors (CoC) and if the plan approved is in line with the insolvency and bankruptcy code(IBC), the tribunal would uphold the validity of the decision taken by the CoC.
The tribunal was hearing petitions filed by Omkara Infrastructure Pvt. Ltd and Simplex Credit and Industries Ltd against the resolution professional of Divya Jyoti Sponge Iron Pvt. Ltd Arun Kumar Gupta.
The two applicants separately alleged discrimination by Gupta.
The presiding officer Jinan K.R., citing reasons of rejection as stated by the CoC during its meetings, said, “in view of rejection of resolution plan submitted by the applicants in both company applications supported by reasons, it appears to me that both the applications require no consideration at the fag end of the final hearing of the company petition in respect of approval of the resolution plan.”
Omkara had also levelled charges of mala fide intention against the resolution professional, alleging that its amount was bid amount was disclosed to other applicant, leading to a change in decision.
The court, however, on account of lack of evidence, dismissed the claims made by the petitioner.
The presiding officer also said that there is a need to stipulate specific regulations for fixing the fees and costs by a resolution professional.
He said that even if the Insolvency and Bankruptcy Board of India (IBBI) has issued guidelines prescribing ethical and professional standards for insolvency professionals, the code is silent on fixation of fees.
“It appears to me that it time to have a legitimate guideline or regulation in this regard so as to safeguard and to ensure the prospects of revival of a dying corporate creditor not to be at the highest cost which cannot be affordable by the corporate debtor,” the order stated.