Introduction to pivotal judgment of the NCLT Kolkata Bench :
In a pivotal judgment, the NCLT Kolkata Bench, presided over by Ms. Bidisha Banerjee and Shri Arvind Devanatha, delves into the myriad legal intricacies concerning the approval of a resolution plan by a single member Committee of Creditors (CoC). The case, cited as Jaykay Enterprises Ltd. Vs. National Oil Company Ltd., navigates through the legal corridors of the Insolvency and Bankruptcy Code, 2016 (IBC), unraveling the procedural and substantive legal nuances. This exploration will elucidate the legal provisions at play, relevant case laws, and the broader implications of this judgment on the IBC.
I. Legal Framework:
A. Insolvency and Bankruptcy Code, 2016 (IBC):
1. Section 24: This section outlines the procedural requirements for convening and conducting CoC meetings. The case underscored that a meeting as envisaged under Section 24 is unfeasible with a lone member representing the CoC.
II. Pertinent Case Laws:
A. Kannan Tiruvengadam RP for EMC Ltd. – NCLT Kolkata Bench:
1. Valuation vistas: Unfolding the valuation paradigm in the insolvency resolution narrative.
B. State Bank of India Vs. Coastal Projects Ltd. – NCLT Kolkata Bench:
1. Timely submission and deliberation: Emphasizing the essence of timely submission.
C. Renganayaki Agencies vs Sreenivasa Rao Ravinuthala:
1. Bidding boundaries post-approval: Outlining the Adjudicating Authority’s limitations.
III. Judgement Highlights of NCLT Kolkata Bench:
A. Land Rights and Jurisdiction:
1. The bench clarified that the rights regarding the land have not been defined, thus, it’s outside their jurisdiction to decide upon the matter.
B. Role of the Resolution Professional:
1. The judgment affirmed the Resolution Professional’s stance of not providing the Information Memorandum to the application as the Applicant is neither a CoC member nor a prospective Resolution Applicant.
C. Definition Dilemma:
1. The term “Committee” remains undefined in Part 1 or Part 2 of the IBC, which deals with Insolvency Resolution and Liquidation for Corporate Persons.
D. CoC Meeting Conundrum:
1. A meeting can’t be convened when a single person represents the CoC, rendering “meeting” as contemplated under Section 24 of the IBC, unfeasible.
E. Stakeholders’ Spectrum in CIRP:
1. Stakeholder involvement in a CIRP process is not confined only to financial and operational creditors.
F. Approval of the Resolution Plan:
1. The approval of the resolution plan by the CoC should occur in a validly convened and conducted CoC meeting, post which the resolution plan is reverted back to the CoC.
G. Confidentiality Curtain:
1. Post the Adjudicating Authority’s approval, the resolution plan’s confidentiality status is lifted.
H. Workers’ Union’s Stand:
1. The Workers’ Union lacks locus standi to question the assignment of a debt by a Bank.
Conclusion on verdict of NCLT Kolkata Bench:
The NCLT Kolkata Bench’s verdict in Jaykay Enterprises Ltd. Vs. National Oil Company Ltd. meticulously navigates through the legal matrix governing the Committee of Creditors’ functionality in the resolution process. Through a thorough examination of relevant case laws and intertwined IBC provisions, the judgment enriches the insolvency and bankruptcy jurisprudence in India. This discourse not only provides a legal lighthouse for the stakeholders involved but also contributes significantly to the broader understanding of the evolving insolvency law landscape in India.
