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NCLT: Act/Code will prevail over Rules and Regulation

In Omkara Asset Reconstruction Pvt. Ltd. vs Resolution Professional of Unimark Remedies Ltd., the application was filed by the applicant before the NCLT, Mumbai in the ICICI Bank Limited Vs. Unimark Remedies Ltd..

The applicant's objection was against the decision of the COC in refusing to open the envelop of the Resolution Plan sent by the Applicant and to return the same to the Applicant without considering the resolution plan on its merits.

The Respondent defended their decision stating that pursuant to section 25(2)(h) of the code, the RP had issued advertisement on 08.06.2018 inviting EOI from prospective resolution Applicants. The last date for submission of EOI was extended thrice by announcement made on the website of the Corporate Debtor that is on 28.06.2018, 19.07.2018 and 17.08.2018. It is further submitted that the request for resolution plans (RFRP) inviting resolution plans from Resolution Applicants was published on the website of the Corporate Debtor on 16.07.2018 with the cut-off date for submission of the Resolution Plan as 14.08.2018. Subsequently, the cut-off date was extended to 14.09.2018, and thereafter to 01.10.2018 and further extended to 31.10.2018. It is submitted that four EOI were received from  Resolution Applicants and two Resolution Plans were received within the cut- off date of 31.10.2018. The Applicant herein has not submitted the Resolution Plan on or before 31.10.2018, however the Applicant has submitted the Resolution Plan on 12.12.2018 which is beyond the cut-off date. It is further submitted that the 270 days of CIRP will expire on 29.12.2018.

The Tribunal accepting the argument of the Applicant held that the Resolution Applicant had approached the RP with a proposal at the 12th hour but certainly before accepting or finalization of any Resolution Plan and keeping in view the very object of the Code, when there is a clash/ conflict between the Regulations and the Code, the object of the Code is paramount and not the Regulations which are formed only for the just implementation of the Code. Purely on the basis of technicalities, the rejection of Resolution Plan even without looking into its merits, is certainly an act which shall go against the very spirit of the Code and may even result in a huge loss to the Company. Any Regulation which does not anticipate such a situation and if the same comes in the way of proper justification and implementation of the principles of the Code, the same need not be considered nor can be treated as an impediment in the implementation of the Code.

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