Q: Discuss the citation of QVC Exports Pvt. Ltd. vs RP Deloitte Touche Tohmatsu India LLP, 28th January 2020 ?

Ans: In QVC Exports Pvt. Ltd. vs RP Deloitte Touche Tohmatsu India LLP, 28th January 2020, a resolution plan was submitted jointly by the appellants during the CIRP, which was approved unanimously by the CoC and subsequently by the NCLT. The resolution plan provided for the percentage of shareholding of each of the applicants and accordingly, fresh equity shares were issued to applicants.

After a period of thirteen months, one of the joint applicants approached the NCLT to obtain orders for rectification of a mistake in the resolution plan, regarding the shareholding of both the applicants. The NCLT passed orders to rectify the said resolution plan and for re issuance of the equity share capital according to the rectified resolution plan.

Aggrieved by the order, the other joint resolution applicant approached the National Company Law Appellate Tribunal (NCLAT).

Allowing the appeal the NCLAT made the following observations:-

* NCLT did not hear both parties before passing the order

The resolution plan was submitted by two applicants jointly and hence an application for changein the resolution plan affecting the rights of the other party, should have been applied by both parties and not unilaterally. The NCLT erred in passing orders in favor of one party only.

* Resolution Plan once attained, finality cannot be modified.

Relying on the Supreme Court order in Rahul Jain v. Rave Scans (P) Ltd[ii], which held that a resolution plan once attained finality cannot be modified by the order of the tribunal, the NCLAT observed that the tribunal erred at passing an order which modified the resolution plan substantially affecting the rights of other parties.

The NCLAT also relied on R G G Vyapar Pvt Ltd v Arun Kumar Gupta, where the appellate court itself held that the NCLT has no power to reopen a resolution process under section 31 of the I&B Code.

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