NCLAT in a case recently held that any objection on the net worth certificate provided by Successful Resolution Applicant cannot be raised by the suspended Board of Directors after the Resolution Plan has been approved by the CoC with a huge majority of voting share.
It was pointed out that the Appellant has participated in the Committee of Creditors’ meeting during the CIRP process but never raised the issue with regard to the eligibility of Respondent, who is resolution applicant, as regards net worth criteria. It was considered too late in the day to accept the argument emanating from the Appellant that the net worth of the Resolution Applicant calculated on the basis of the market value of fixed assets minus secured loans is not in accordance with the definition of net worth under Section 2 (57) of the Companies Act, 2013. No objection to calculation having been raised at the relevant time and the criteria adopted for arriving at the conclusion in regard to net worth not being shown to be fundamentally flawed and perverse, the argument raised on this score is repelled. No objection on this score can be permitted to be raised by the Appellant after the Resolution Plan has been approved by the Committee of Creditors with a huge majority of voting share
1Singh Raj Singh V. SRS meditech Limited (2020) ibclaw.in 289 NCLAT
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