NCLT Mumbai Rejects Financial Creditor's Plea To Revise Vote On Reliance Broadcast Resolution Plan

The National Company Law Tribunal (NCLT) at Mumbai on Thursday rejected an application by Authum Investment and Infrastructure Limited (which acquired the claim from Reliance Commercial Finance Limited) to revise its vote from No to Yes on the approved resolution plan for Reliance Broadcast Network Limited.

A coram of Judicial Member  Mohan Prasad Tiwari and Technical Member Charanjeet Singh Gulati  refused RCFL's plea on the ground that the voting cannot be altered once the process is completed. 

RCFL, which held about 11.03% voting rights in the Committee of Creditors (CoC), had initially voted against the resolution plan submitted by Sapphire Media Ltd. in November 2023. However, after realizing that continuing as a dissenting creditor could result in receiving no payout since the first-charge creditors had priority over the company's assets, RCFL reconsidered its position.

On November 21, a few days after the voting period had closed, RCFL sent an email expressing its intention to revise its vote, stating that the earlier vote had been cast in error and should instead be treated as an assent to the resolution plan.

By voting Yes, it hoped to be treated as an assenting financial creditor, giving it a guaranteed payout and a chance to claim distribution on par with other secured creditors.

However, the tribunal ruled the attempt invalid and procedurally incorrect, emphasizing that once the voting period ends, votes cannot be altered. It noted,

“Once the process under Regulation 26 stands concluded, there remains no provision that allows any member of the CoC to alter or modify its vote thereafter. Any change in the voting beyond the voting window would compromise the integrity of the voting process and sanctity of the prescribed timeline for voting. Consequently, the same way affect the confidentiality and overall timeline of the CIRP proceedings. ”

The tribunal further observed that RCFL tried to send its revised vote by email after the plan was already approved by 88.97% of the CoC and after the Resolution Professional had filed the application for approval with the Adjudicating Authority.

On the allegation of discrimination, the tribunal upheld the CoC's commercial decision. RCFL had argued that receiving only 3% of its claim was unfair, but the court noted:

“The distribution of proceeds being not violative of any provisions of law, and the Plan being approved by the CoC in its 14th meeting (e-voting concluded on 16.11.2023) with an 88.97% voting share in their commercial wisdom is not open for interference of the Adjudicating Authority. The internal distribution of proceeds is within the commercial decision of the CoC."

The tribunal also rejected reliance on unrelated Supreme Court judgments, clarifying that the vote revision issue is governed solely by CIRP regulations.

The tribunal said that once the voting period ends, votes cannot be changed. It also noted that creditors cannot question the CoC's decision on payouts just because they want a higher amount. RCFL's attempt to change its vote to “Yes” to get a guaranteed recovery was therefore rejected.

Case Title: IDBI Trusteeship Services Limited Vs Reliance Broadcast Network Limited 

Case Number: IA (IBC) NO. 3977 OF 2024 IN CP (IB) NO. 310 OF 2022 

For Applicant: Advocate Shivam Bhagwati

For Respondent: Advocate Deep Roy and Advocate Saurabh Bachhawat 

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