The Tribunal allowed an application by an MSME promoter to stay CoC voting on other resolution plans.
The application was allowed and the CoC voting was stayed pending the submission, collation, and consideration of the Applicant’s Resolution Plan.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
SL. No.1
NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH COURT HALL NO: II
PHYSICAL HEARING
CORAM: JUSTICE TELAPROLU RAJANI– HON’BLE MEMBER (J)
CORAM: SHRI. CHARANSINGH - HON’BLE MEMBER (T)
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING OF NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD BENCH, HELD ON 17.07.2023, At 02:30 PM
| TRANSFER PETITION NO. | |
|---|---|
| COMPANY PETITION/APPLICATION NO. | IA (IBC)/1048/2023 in CP (IB)No.06/7/HDB/2019 |
| NAME OF THE COMPANY | Speck Systems Ltd |
| NAME OF THE PETITIONER(S) | IDBI Bank Ltd |
| NAME OF THE RESPONDENT(S) | Speck Systems Ltd |
| UNDER SECTION | 7 of IBC |
ORDER
IA (IBC)/1048/2023
This application is allowed, vide separate orders.
Sd/Sd/- MEMBER (T) MEMBER (J)
Apoorva
IN THE NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH – II
IA No.1048 of 2023 in CP(IB) No.6/7/HDB/2019 Under Section 60(5) of IBC, 2016
In the matter of: IDBI Bank Limited Vs. M/s. Speck Systems Ltd. Between : Mr. K.C.M. Kumar, Promoter & Director-Suspended of MSME Entity, Representing the Ex-Management of M/s. Speck Systems Ltd., R/o. B122 AFOCHS, 2nd Cross Sainikpuri, Secunderabad – 500 094. And Mr. Raghu Babu Gunturu, Resolution Professional of M/s.Speck Systems Ltd, 1st Floor, Golden Heights, Plot No.9, Opp: Raheja IT Mindspace, HUDA Techno Enclave, Madhapur, Hyderabad – 500 081.
.... Financial Creditor
…. Corporate Debtor …. Applicant …. Respondent Date of order: 17.07.2023
CORAM :
Hon’ble Justice Smt. Telaprolu Rajani, Member (Judicial) Hon’ble Sri Charan Singh, Member (Technical)
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IA No.1048 of 2023 in CP No.6/07/HDB/2019
Order dated : 17.07.2023
Counsels present :
For the Applicant : Mr. Naresh Kumar Sangam, Advocate For the Respondent : Mr. Amir Bavani, Advocate Heard on : 13.07.2023
[PER: BENCH] ORDER
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IA No.1048 of 2023 in CP No.6/07/HDB/2019
Order dated : 17.07.2023
subsequently confirmed as Resolution Professional (RP) invited Resolution Plans and the CoC members were appraised about three Resolution Plans that were submitted by the Prospective Resolution Applicants (PRAs). Consequently, the CoC approved the Resolution Plan submitted by M/s. Pasura Crop Care Pvt. Ltd. An IA No.641 of 2022 was filed by the RP for approval of the Resolution Plan. By Order dated 03.01.2023 in IA No.641 of 2022, this Tribunal remanded the Resolution Plan back to the CoC for further consideration. After the Resolution Applicant had duly amended the plan, the said Resolution Plan is still under consideration before the CoC. An extension application was filed by the Respondent, and the CIRP period stands extended till 05.07.2023.
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IA No.1048 of 2023 in CP No.6/07/HDB/2019
Order dated : 17.07.2023
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IA No.1048 of 2023 in CP No.6/07/HDB/2019
Order dated : 17.07.2023
procedures under the Corporate Insolvency Resolution Process. For example, if case is settled before the constitution of the Committee of Creditors or in terms of Section 12A on the basis of offer given by Promoter, in such case, all other procedure for calling of application of Resolution Applicant, etc. are not followed. If the promoter satisfies all the creditors and is in a position to keep the Corporate Debtor as a going concern, it is always open to Committee of Creditors to accept the terms of settlement and approve it by 90% of the voting shares. The same principle can be followed in the case of MSME.
21. The Parliament with specific intention amended the provisions of the I&B Code by allowing the Promoters of MSME to file Resolution Plan. The intention of the legislature shows that the Promoters of MSME should be encouraged to pay back the amount with the satisfaction of the Committee of Creditors to regain the control of the Corporate Debtor and entrepreneurship by filing Resolution Plan which is viable, feasible and fulfils other criteria as laid down by the Insolvency and Bankruptcy Board of India.
22. Therefore, we hold that in exceptional circumstances, if the Corporate Debtor is MSME, it is not necessary for the Promoters to compete with other Resolution Applicants to regain the control of the Corporate Debtor.”
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IA No.1048 of 2023 in CP No.6/07/HDB/2019
Order dated : 17.07.2023
Tribunal that it is not necessary for the Promoters to compete with other Resolution Applicants to regain the control of the Corporate Debtor”.
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IA No.1048 of 2023 in CP No.6/07/HDB/2019
Order dated : 17.07.2023
can be ordered as a last resort if there is no Resolution Plan and the Resolution Plans submitted are not fulfilling the criteria laid down therein.
“there is no harm in giving an opportunity to the MSME in accordance with the provisions of the Code for keeping the promotion of entrepreneurship alive.”
“The Adjudicating Authority has only provided an opportunity to the MSME and has given the liberty to the CoC to negotiate with existing Resolution Applicant and MSME unit also and accept the one which is commercially viable and technically feasible.”
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IA No.1048 of 2023 in CP No.6/07/HDB/2019 Order dated : 17.07.2023
from the date of this Order and the RP shall collate the said Resolution Plan and place before the CoC and the CoC shall negotiate with the existing Resolution Applicants including the Applicant herein and decide on the Resolution Plans, considering the commercial viability and technical feasibility of the Plan. The CoC voting shall be stopped till consideration of the Resolution Plan submitted by the Applicant. The CoC voting shall be done in respect of the Plan that would be accepted after considering the Resolution Plan submitted by the Applicant. The application is accordingly allowed and disposed of.
Sd/- Sd/-
(CHARAN SINGH) (JUSTICE TELAPROLU RAJANI) MEMBER (TECHNICAL) MEMBER (JUDICIAL)
VL
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3 issues framed by the court
Whether an MSME promoter who was denied opportunity to submit a resolution plan should be granted an opportunity despite delay.
Whether CoC voting should be stayed pending consideration of a reservation plan by an MSME promoter.
Whether an MSME promoter competing with other resolution applicants is commercially viable under IBC 2016.
Colour shows how this judgement treated each authority
Swiss Ribbons Pvt. Ltd. and Another Vs. Union of India and OthersRelied on¶9
Swiss Ribbons Pvt. Ltd. and Another Vs. Union of India and Others, 2019 SCC Online SC 73 · Who else cites this
IDBI Bank Limited
Mr. K.C.M. Kumar
Mr. Raghu Babu Gunturu
Telaprolu Rajani
Charan Singh
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
