Home Case Index All Cases Companies Law Companies Law + Tri Companies Law - 2018 (1) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (1) TMI 1501 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAIInitiation of Corporate Insolvency Resolution Process - Liquidation Value - matching with the outstanding Debts or not - HELD THAT:- An 'objective satisfaction' revolves around the object of enactment of the Code as enshrined in the Preamble of the I & B Code i.e. to revive the financially stressed corporate body. And the 'subjective satisfaction' depends upon logical analysis of the Financial Data supplied so as to match with the business model of the Corporate Debtor. A methodical scrutiny of Financial Statement is expected before concurring with approval of the COC. Per contra, absence of recording of subjeftive satisfaction may lead to situation that being sanctioned without judicial analysis thus may not be sustainable in the eyes of law, There are no two views, and must not be, that this I & B Code provides greater accountability both on the Insolvency Professional as also on COC, mainly comprise of lender Banks. Their approval of a Resolution Plan ought to be judged with due diligence. To sum up, in our humble interpretation the recording of an analytical 'satisfaction' is a condition precedent before granting of approval. In this Plan there is inconsistency that under the Heading "Assumption" as per Clause it is noted that, quote "New Promoters Deposit to the extent ofe2 crores to be allowed to be convened into Equity Shares by Financial Year 2022-23." However, under the Head "Conclusion" as per Clause V under the Head "Promoters' Loan" it is proposed, quote "the fresh Unsecured Loans of ₹ 350 lakhs to be infused by the Promoters under the Resolution Plan shall be repayable during 2021-23 - Considering the financially stressed position Of the Debtor Company the fresh Unsecured Loans infused by the Promoters is required to be converted into Equity so that the burden of repayment must be deferred instead dividend can be distributed. The Resolution Plan submitted by the Promoters is to be accepted because a Certificate is on record that the Promoters are not "wilful defaulter" hence their proposal is acceptable as per the latest Amendment [The I & B Code (Amendment) Act, 2017 (No. 8 of 2018)) dated 18th January, 2018 wherein S, 29-A is inserted and prescribed that, a person shall not be eligible to submit a Resolution Plan if such person is a "wilful defaulter" In this regard an Affidavit-cum-Declaration submitted by the Resolution Applicant declaring therein that the Declarant had not been identified as a "wilful defaulter". As a consequence, the provisions of S. 29-A are not applicable in this Case. The Resolution Plan is approved subject to the modifications suggested hereinabove which is binding on the Corporate Debtor and other stakeholders involved in this Resolution Plan so that revival of the Debtor Company shall come into force with immediate effect.
|