NCLAT Chennai stays MGM Healthcare takeover following Le Meridian's appeal

The NCLAT order dated 30 July 2021, by Justice M Venugopal - Member (Judicial) and VP Singh, Member (Technical), was on an application by Periasamy Palani Gounder (appellant), promoter and former director of Appu Hotels.

The NCLAT took cognizance of the submission made by the appellant, giving a stay order against the approval of the National Company Law Tribunal. “The Learned Counsel for the Appellant submits that the whole ‘Resolution Process’ is vitiated by numerous statutory violations of the provisions of the Code and the Regulations,” reads the order, a copy of which is available with DT Next.

It also contended that the ‘Adjudicating Authority’ had failed to interfere with the attempt to acquire the assets of the ‘Corporate Debtor’ for less than 25% of its actual value, while the ‘Promoters’ are ready and willing to infuse more funds than the second Respondent and to settle all the creditors in an expeditious manner.

The learned counsel for the Appellant also submitted that the ‘Appellant’ would deposit Rs 450 crores (Rs 425 crores + Rs 25 crores) and he required two or three days’ time, in this regard while putting forward a plea that this is not the ‘creditors’ revival case.

It also held that the revised ‘Resolution Plan’ (final) submitted by the second Respondent (MK Rajagopalan) dated 25.01.2021 is not a ‘Resolution Plan’ in the eye of law. “…for the Appellant submits that the ‘Adjudicating Authority’ had failed to take note of the fact that he unsecured financial creditor (constituted around 12.61% of the total vote share of the Committee of Creditors’) were deliberately left out of the ‘Committee of Creditors’. In short, the decisions taken by an improperly constituted ‘Committee of Creditors’ is an invalid one.” Further, the Learned Counsel for the Appellant contended that the ‘Resolution Professional’ and the ‘Interim Resolution professional had felicitated the process by which the ‘Resolution Applicant’ was put in a Pole Position to abdicate with assets worth over Rs 1600 cr for a paltry sum of Rs 423 cr.