The Telangana High Court had passed an interim direction suspending the order of National Company Law Tribunal’s Special Bench of Hyderabad which rejected the Resolution Plan presented by M/s CFM Asset Reconstruction Private Limited.
The Resolution Plan was presented in a matter involving Viceroy Hotels Limited and Union Hotels Private Limited. A Bench of Acting Chief Justice M.S. Ramachandra Rao and Justice T. Vinod Kumar, which passed the interim direction, observed that “it appears that the parties have not been taken into confidence” by the NCLT Bench while rejecting the RP.
The Bench said, “It is settled principle that justice should not only be done but it must be seen to be done”. Prima facie it did not appear so in the present case and hence, the NCLT order was being suspended temporarily, the Bench said in its order.
NCLT’s Hyderabad Bench initiated the Corporate Insolvency Resolution Process (CIRP) of Corporate Debtor M/s Viceroy Hotels by an order on March 12, 2018. Subsequently, the Committee of Creditors appointed a Resolution Professional.
The CoC approved the Resolution Plan presented by CFM ARC which offered ₹185 crore. Another RP submitted by Unison Hotels was rejected by the CoC. Challenging this, Unison Hotels moved NCLT. After NCLT rejected Unison Hotel’s plea, the latter went for an appeal at NCLAT-Delhi. The appeal too, was dismissed.
Meanwhile, CFM ARC filed an interim application proposing some changes to the RP without changing the total amount committed. The Unison Hotels got impleaded as party in the addendum to the RP presented by CFM ARC.
After hearing contentions of both the parties, the NCLT Hyderabad Bench rejected the CFM ARC RP observing that the latter never indicated M/s Tolaram Inc. Singapore as a co-applicant and it amounted to concealment of facts. Challenging this order, CFM ARC moved the High Court which suspended the NCLT order.
