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With a Supreme Court order permitting the promoter’s settlement plan to save the company from liquidation, ailing Shiva Industries and Holding Ltd (SIHL) on Saturday said the company will soon be placed under new management and as soon as its The focus will be on settling the creditors. possible.
Commenting on the SC order quashing the orders of both NCLT and NCLAT that directed the winding up of the company, serial entrepreneur and father of the company’s founder C Sivasankaran, Vallal RCK told FE: “I am by the judgment of the Hon’ble Supreme Court. I am happy and humble. It’s been a long journey to get here and I feel fine. At my twilight age of 94, this verdict has reaffirmed my belief in the impartiality of the Indian judiciary. I thank all those who supported me in the journey to reach here.” Also, he looks forward to a company using artificial intelligence to find ways to combat metabolic diseases.
Valal RCK, a shareholder of the company, challenged the NCLAT order, upholding the NCLT order to terminate SIHL, despite the Committee of Creditors (CoC) accepting the settlement plan with a voting majority of 94.23%. .
In its order on the appeal of Vallal RCK, a division bench of the apex court comprising Justices BR Gavai and Hima Kohli held that the Adjudicating Authority (NCLT) or the Appellate Authority (NCLAT) cannot sit in appeal on the professional knowledge of the CoC. Intervention will be justified only if the Adjudicating Authority or the Appellate Authority finds the decision of the CoC to be completely arbitrary, arbitrary, irrational and violates the law or rules.
Through the order, the SC has allowed the lenders to go ahead with the settlement plan of the SIHL promoter under Section 12A of the Insolvency and Bankruptcy Code (IBC), which allows such a provision if 90% of the CoC is its supports.
The court reiterated its own observation in Arun Kumar Jagatramka Vs Jindal Steel & Power Ltd, in which it had held that the need for judicial intervention or innovation from the NCLT and the NCLAT should be kept to a minimum and should not disturb its fundamental principles. . IBC. The court observed that the professional knowledge of the CoC has been accorded paramount importance without any judicial interference to ensure that the procedures laid down by the IBC are completed within the prescribed time frame.
The decision of the CoC was taken after the members deliberated on the pros and cons of the settlement plan and applied their professional knowledge. The top court observed that neither the NCLT nor the NCLAT did not give due importance to the professional knowledge of the CoC.
The NCLT had ordered the winding up of SIHL in August 2021 and dismissed the application filed by the resolution professional of Shiva Industries.
SIHL counsel Abhishek Manu Singhvi submitted that it is well settled that the adjudicating authority or the appellate authority cannot sit in appeal on the professional knowledge of the CoC. They argued that the CoC had accepted the settlement plan with a voting majority of 94.23%, and that the NCLT and NCLAT had made a gross mistake in rejecting the settlement plan and withdrawing the CIRP.
Promoter of Shiva Industries has offered him Rs 328.21 crore IDBI BankAssociation of Lenders in the form of lump sum settlement to withdraw the company from IBC proceedings in NCLT. The debt of the company is around Rs 4,863 crore and the settlement plan has cut the banks by about 93.5%. Along with SIHL Holding Company, Shiva Group has business interests in Communications, Renewable Energy, Media, Realty, Agriculture and Food & Wellness.
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