NDLI: The Karad Urban Cooperative Bank Ltd. Vs. Swwapnil Bhingardevay & Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	2016 s.7 application Insolvency and Bankruptcy Code financial creditor
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Insolvency and Bankruptcy Code, 2016 (31 of 2016)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Insolvency and Bankruptcy Code, 2016: Appellant financialcreditor filed s.7 application before NCLT against corporate debtor– Committee of Creditors (CoC) resolved to approve the ResolutionPlan submitted by one M/s Sai Agro – On the basis of approval ofResolution Plan, Resolution Professional moved an applicationbefore NCLT – At this stage, the Director/Promoter of corporatedebtor also came up with an application seeking permission to fileResolution Plan – NCLT rejected the application of corporate debtorand approved Resolution Plan submitted by M/s Sai Agro – Thus,M/s Sai Agro became Successful Resolution Applicant (SRA) –Director/Promoter of corporate debtor filed appeal before NCLATagainst the approval of the Resolution Plan of SRA – NCLAT allowedthe appeal and remanded the matter back to NCLT with direction tosend back the Resolution Plan to the CoC – Order of NCLT waschallenged on the ground inter alia that the Resolution Plan sufferedfrom issues of viability and feasibility and that the Resolution Plandid not take note of important fact that the ethanol plant andmachinery shown as part of the assets of the corporate debtor,actually belonged to another company by name, SarvadnyaIndustries Private Ltd. (SIPL) and that a bank by name, JanataSahkari Bank Ltd. had taken possession of the same under theSARFAESI Act – Financial creditor and Resolution Professional bothfiled separate appeals respectively – Held: It is not the case ofcorporate debtor or its promoter/Director or anyone else that someof the factors which were crucial for taking a decision regardingviability and feasibility were not placed before the CoC or theResolution Professional – The only basis for the corporate debtorto raise the issue of viability and feasibility was that the ownershipand possession of the ethanol plant and machinery was the subjectmatter of another dispute and that the Resolution Plan did not takecare of the contingency where the said plant and machinery maynot eventually be available to SRA – However, records very clearlyshow that SRA, Resolution Professional and financial creditor werefully aware of the said issue – The order passed by the NCLATshowed that the possession of the ethanol plant and machinery wasrestored to SIPL, in the appeal to which SRA was also a party – SRAalso appeared to have offered to Janata Sahkari Bank to purchasethe said plant and machinery – In the appeal before the NCLAT outof which these appeals arose, SIPL which claimed ownership of theethanol plant and machinery, was also a party – In any case, theResolution Professional took a specific plea in his grounds of appealbefore this Court, that SRA was itself into the ethanol manufacturingbusiness and that they had sufficient ethanol production capacityrequired to fulfil their Resolution Plan – Therefore, the fact thatthere was an issue with regard to the ethanol plant and machinery,had been taken note of by Resolution Professional, CoC and SRA –Since all these three parties took note of the said fact and took aconscious decision to go ahead with the Resolution Plan, it cannotbe stated that the question of viability and feasibility was notexamined in the proper perspective – Therefore, the main groundon which NCLAT interfered with the decision of the NCLT to approvethe Resolution Plan, was wholly untenable, misconceived andunjustified.
Judge	Hon'ble Mr. Justice V. Ramasubramanian
Neutral Citation	2020 INSC 533
Petitioner	The Karad Urban Cooperative Bank Ltd.
Respondent	Swwapnil Bhingardevay & Ors.
SCR	[2020] 13 S.C.R. 465
Judgement Date	2020-09-04
Case Number	2955

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The Karad Urban Cooperative Bank Ltd. Vs. Swwapnil Bhingardevay & Ors.

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