HYDERABAD: The Telangana High Court pulled up the National Company Law Tribunal (NCLT) for its nature of functioning and the way its members were discharging their duties.
A division bench comprising acting Chief Justice M.S. Ramachandra Rao and Tadakamalla Vinod Kumar asked the NCLT of Hyderabad to at least follow the settled principle that ‘justice should not only be done, but it must be seen to be done’.
The bench also commented that it knew how things were going on in NCLT and how appointments were made, and said it did not want to go into the issue at this juncture. These comments were made by the bench while reacting to the interference of NCLT with regard to the insolvency resolution process of corporate debtor M/S Viceroy Hotels Ltd, even after its creditors committee approved the resolution plan submitted by CFM Asset Reconstruction Pvt Ltd, which offered Rs 185 crore to take over the debtor Viceroy Hotels.
However, NCLT interfered into the issue and rejected the resolution plan of CFM Asset Reconstruction Ltd, by allowing one implead petition filed by M/S Unison Hotels Pvt Ltd, the unsuccessful resolution applicant in this bid which only offered Rs 160 crore.
The High Court took serious note of the issue of circumstances in which the NCLT issued the said orders. Actually, when the resolution plan of CFM Asset Reconstruction had been approved by creditors, the unsuccessful bidder Unison approached the NCLT in Hyderabad in 2019 by filing an interim application, which was dismissed in December 2019, by the then bench. Then Unison Hotels filed an appeal in NCLAT in Delhi, which was also dismissed in 2020.
But, when the successful bidder filed an application before the NCLT in Hyderabad in 2020, for an addendum to its resolution plan to treat M/s Tolaram Inc, Singapore, as co-applicant instead of the investor, the Unison Hotels Ltd filed implead petition requesting to reject the amend application CFM and to set aside the approved resolution plan.
This implead petition was allowed by the NCLT. The CFM’s claim before the High Court was that without giving opportunity to them, in a biased manner, the NCLT passed orders by setting aside the resolution plan already approved and was upheld by the then bench of NCLT and NCLAT. Vedula Srinivas, senior counsel appearing for CFM Ltd, brought to the notice of the court that the NCLT bench had adjourned the case to September 17, but even before they submitted the arguments, the NCLT bench pronounced the orders on September 1, in which it dismissed the addendum application and also rejected the resolution plan. In its orders, the NCLT bench also cast aspersions against the resolution professional and creditors committee.
The High Court suspended the NCLT orders and made serious remarks against the way the NCLT functioned....