As per the approved resolution plan, all operational creditors of Alok Industries having dues less than Rs 3 lakh got 100% payment, while those with dues over Rs 3 lakh got nil payment.
The National Company Law Appellate Tribunal (NCLAT) on Monday dismissed GAIL India’s plea challenging the NCLT’s March 8, 2019 order that approved the insolvency resolution plan of Alok Industries, which has now been taken over by a consortium of Reliance Industries and JM Financial Asset Reconstruction.
As per the approved resolution plan, all operational creditors of Alok Industries having dues less than Rs 3 lakh got 100% payment, while those with dues over Rs 3 lakh got nil payment. GAIL had a claim of Rs 506.42 crore.
GAIL had contested the approval terming the resolution plan as “unreasonable” and “arbitrary” as it fails to treat equals as equal and it also omits to provide any reasonable justification for such discrimination against the operational creditors having dues over Rs 3 lakh and thus, “the resolution plan is opposed to common sense besides the same, shocks the judicial conscious of the Tribunal”.
A two-member bench of the NCLAT, however, did not find any merit in GAIL’s plea.
“Looking at from any angle, the impugned order dated 08.03.2019 passed by the adjudicating authority (National Company Law Tribunal), Ahmedabad bench in dismissing the application does not suffer from any material irregularity or patent illegality in the eye of law.
Resultantly, the instant appeal sans merits,” said the bench, headed by acting chairperson M Venugopal.
Moreover, Gail India has also commenced arbitration proceedings regarding its claim emanating from the gas sale agreement, with Alok Industries, NCLAT observed.
“In reality, there is no embargo for the classification of operational creditors into separate/different classes for deciding the way in which the money is to be distributed to them by the ‘Committee of Creditors because of the fact, undoubtedly, they do have the subjective final discretion of collective commercial wisdom’ in relation to (1) The amount to be paid (2) The quantum of money to be paid, to a certain category or the incidental category of creditors, of course, nicely balancing the interests of the stakeholders and the operational creditors, as the case may be,” the NCLAT observed.
“Suffice it for this Tribunal to pertinently make a significant mention that it cannot be lost sight of that the appellant’s claim (Gail) is not relatable to the supply of goods or services to keep the corporate debtor (Alok Industries) as a ‘going concern’,” the bench said.