NCLAT : In Vijay Kumar Jain vs. Standard Chartered Bank Ltd. & Ors.

The suspended Board of Directors cannot decide the viability and feasibility of a ‘Resolution Plan’ nor is competent to restructure their debt in order to make the ‘Corporate Debtor’ as a going concern. It only in the domain of the ‘Committee of Creditors’ who are expert in the field to decide the viability, feasibility and financial matrix of one or other ‘Resolution Plan’ by majority share of voting rights.

This appeal has been preferred by the Director of Corporate Debtor with the grievance that the ‘Committee of Creditors’ have not provided (suspended) Board of Directors with the copies of the ‘Resolution Plans’ for their comments. It is also submitted that the approved ‘Resolution Plans’ is binding in nature on the members (shareholders) and other stakeholders in terms of Section 31 of the I&B Code, therefore, it was the duty on the part of the ‘Committee of Creditors’ to provide the ‘Resolution Plans’ to the members of the (suspended) Board of Directors.

The ‘Board of Directors’ or Representative of ‘Operational Creditors’ or the ‘Resolution Applicants’ having no voting right, it is not required to be forwarded to them, though they may act in terms of decision in “Rajputana Properties Pvt. Ltd. (Supra)”. The Board of Directors cannot decide the viability and feasibility of a ‘Resolution Plan’ nor is competent to restructure their debt in order to make the ‘Corporate Debtor’ as a going concern. It only in the domain of the ‘Committee of Creditors’ who are expert in the field to decide the viability, feasibility and financial matrix of one or other ‘Resolution Plan’ by majority share of voting rights.

Link : https://ibbi.gov.in/webadmin/pdf/order/2018/Aug/9th%20Aug%202018%20in%20the%20matter%20of%20Vijay%20Kumar%20Jain%20Vs.%20Standard%20Chartered%20Bank%20Ltd.%20&%20Ors.%20CA%20(AT)%20No.%20442-2018_2018-08-20%2011:14:26.pdf