Union Bank Of India v. Emc Ltd. And Others

Factual and Procedural Background

The Appellant, Union Bank of India, challenged the plan approved by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, by an order dated 21st October 2019. Other related applications were also disposed of by the said order. On 2nd December 2019, the Appellate Tribunal noted prima facie that the appeal appeared frivolous because the Appellant had consented to the plan and had not stated grounds under sub-section (3) of Section 61 of the Insolvency and Bankruptcy Code, 2016 (I&B Code). The matter was adjourned for further orders on 4th December 2019. Subsequently, it was informed that the Appellant had conditionally approved the plan but not on the distribution of amounts.

Legal Issues Presented

1. Whether the Appellant can challenge the approved resolution plan despite having consented to it initially.
2. Whether the appeal filed by the Appellant satisfies the grounds specified under sub-section (3) of Section 61 of the Insolvency and Bankruptcy Code, 2016 for challenging an approved resolution plan.
3. Whether the distribution of amounts under the resolution plan was proper and in accordance with the law.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court examined the statutory provisions governing appeals against approved resolution plans under the Insolvency and Bankruptcy Code, 2016, specifically Section 32 and sub-section (3) of Section 61. These provisions restrict appeals to specific grounds such as contravention of law, material irregularity by the resolution professional, non-provision for debts owed to operational creditors, improper priority of insolvency resolution costs, or non-compliance with criteria specified by the Board.

The Court noted that the Appellant, Union Bank of India, had initially consented to the plan and had not invoked any of the statutory grounds under sub-section (3) of Section 61 to challenge the plan. The sole ground raised pertained to improper distribution, but the Court found that the distribution was made by the Committee of Creditors, of which the Appellant was a member. Consequently, no valid ground for appeal existed under the statutory framework.

On this basis, the Court concluded that the appeal was frivolous and not maintainable.

Holding and Implications

The Court DISMISSED the appeal filed by the Appellant, Union Bank of India, on the grounds that it was frivolous and did not meet the statutory requirements for challenging an approved resolution plan under the Insolvency and Bankruptcy Code, 2016.

The direct effect of this decision is the finality of the approved resolution plan and its distribution as made by the Committee of Creditors, including the Appellant. No costs were imposed. The opinion does not establish any new precedent beyond affirming the strict application of statutory grounds for appeals against resolution plans.