Supreme Law News

Commercial Wisdome of COC Vs Fairplay in IBC Law

ICICI Bank Ltd Vs KV Aromatics Pvt Ltd, U/s 7 of (IBC)CIRP, today I appeared on behalf of my client Payal Agarwal, objecting to the Resolution Plan. My main contention was that COC and RP has not conducted the entire proceedings arbitrarily and have deliberately favoured the successful RA, a consortium of Fortuna Holdings Pvt Ltd and Saket Agarwal.

In support of my contention, I pointed out to deliberate attempt of keeping me away from 10th COC meeting after taking the final proposal from all RAs in 9th COC and freezing the plan. My other contention was that how and why successful RA was allowed to amend the plan, when it was freezed for one and all?

In the final proposal, SRA offered Rs. 26.25 Cr, and no Insurance Claim to the tune of Rs. 200 Cr, while our offer was that of Rs. 25.26 Cr and 100 per cent of insurance claim. This was the final proposal by one and all as per RP. An insurance claim of over 197.2 Cr is pending in the Delhi High Court.

Now, the proposal, which is put before COC for voting was the one, which was allowed to be improved by SRA and in his new proposal, he offered 35 per cent of insurance claim, to emerge as successful applicant.

Counsel for COC and RP challenged by contention by saying that one, I have no locus standi in the case and two the commercial wisdom of the COC is supreme and can't be even put to judicial scrutiny.

Hon'ble Judicial Member, Ashok Kumar Bhardwaj, said that as far as the question of judicial scrutiny is concerned that will arise when the bench will examine the resolution plan and not here in this intervening application of objection to the plan.

On the ground of locus standi and commercial wisdom, I submitted that as per the judgment in the matter of Vallal v M/s Siva Industries and Holdings Ltd, the Supreme Court has held that the Commercial Wisdom of COC is supreme provided the insolvency process has been fair, just and transparent and as per IBC law.

But in this case, it was wholly capricious, arbitrary, irrational and d hors the provisions of the statute or the Rules and hence this objection.

The opposition counsel further said that insurance was not the part of the value matrix hence it didn't figure while examining the plan and two, the change in insurance figure could not be considered as change in financial plan.

To which I submitted if it was so, why it was made a matter of prime importance in the entire deliberation and two, then why the SRA was allowed to change the same in clandestine manner from passing over of no claim to passing over of 35 per cent claim.

The court asked both the counsel to file their replies within a week and especially asked the counsel for COC and RP to file an affidavit that no favour was done to SRA by allowing him to amend his plan once it was freezed for one and all after 9th COC. #law #supremecourt #insurance #icicibank #insolvency #ibc2023 #kvaromatics #fortunaholdingspvtltd#

Dr. Ajay Kummar Pandey

( LLM, MBA, (UK), PhD, AIMA, AFAI, PHD Chamber, ICTC, PCI, FCC, DFC, PPL, MNP, BNI, ICJ (UK), WP, (UK), MLE, Harvard Square, London, CT, Blair Singer Institute, (USA), Dip. in International Crime, Leiden University, the Netherlands )

Advocate & Consultant, Supreme Court of India & High Courts

4C Supreme Law International, Delhi, NCR. Mumbai & Dubai

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