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2021 (6) TMI 1089 - Tri - Insolvency and BankruptcySeeking approval of the Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 - seeking directions for reinstatement of slots (including bilateral rights and traffic rights) to the Corporate Debtor - slots are present economic resource or are asset? - potential of generating income - HELD THAT:- Admittedly the Corporate Debtor ceased its operations from 17.04.2019. On the date of insolvency commencement i.e. on 20.06.2019, the Corporate Debtor was not in operation. It is not in dispute that the Corporate Debtor was not run as a going concern during the CIRP. Therefore, the protection of the licenses and concessions from termination or suspension would not be available to the Corporate Debtor. In the case of IN THE MATTER OF: UNION OF INDIA VERSUS VIJAYKUMAR V. IYER, VIJAY KUMAR IYER VERSUS GTL INFRASTRUCTURE LTD., GTL INFRASTRUCTURE LTD. VERSUS VIJAY KUMAR IYER, STATE BANK OF INDIA VERSUS GTL INFRASTRUCTURE LTD., INDUS TOWER LTD. VERSUS VIJAYKUMAR IYER RESOLUTION PROFESSIONAL OF AIRCEL LTD. AND DISHNET WIRELESS LTD. & ANR., TELECOM REGULATORY AUTHORITY OF INDIA VERSUS AIRCEL LTD. & ANR. TATWA TECHNOLOGIES LTD. VERSUS VIJAY KUMAR IYER & ANR., TELECOM REGULATORY AUTHORITY OF INDIA VERSUS DISHNET WIRELESS LTD. &ANR. [2021 (4) TMI 1300 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] the spectrum continued to be with the Telecom Company during the CIRP. In the instant case the slots cannot be regarded as ‘present economic resource’ of the Corporate Debtor. That being an important factor, is squarely lacking in the case of the Corporate Debtor. Whether the slots could be considered as an ‘asset’ of the Corporate Debtor? - HELD THAT:- Slots are airport specific and are dependent upon the Airline’s operating rights. The mechanism of allotment of slots, though integral to an operating airline, is a very complex and dynamic process upon which the entire flight schedule of an airport depends. The allotment of slots and their usage is like a constantly changing jigsaw puzzle. A single slot therefore could not be left or kept idle. The slots vacated by one Airline would have to go to another Airline for optimum utilisation of the slots and the capacity of the airport - As the guidelines would indicate the allotment of slots is not automatic and needs to be sought by the Airline twice a year respectively for the summer and winter seasons. Once the slots are not used by particular Airline or vacated by it, the same is immediately allotted to another in order to optimize airport capacity. As already indicated a slot in a Level-3 Airport could not be left idle. No documents however been placed to substantiate and to verify the terms and conditions expressed in relation to the transfer, if any, of the slots, presently held by Air India. Even otherwise the entity / company that would take it over would inherit what the Air India presently has. It can have no claim over what Air India, or for that matter any entity, does not have dominion over. The analogy could not be extended to the Corporate Debtor, in as much as the Corporate Debtor had been divested of these slots w.e.f. 17.04.2019 when it ceased operations and was not operating / using them on the date of the insolvency commencement - The facts and circumstances would indicate that presently the slots cannot be restored to the Corporate Debtor on a historic basis. The thumb rule being ‘use it or lose it’. Be that as it may, we must remember that running an Airline, much less reviving one, is not a facile business. It involves entire gamut of complex and diverse activities from land to sky and everything in between. In the present day air travel has rather become a necessity, than a luxury considered merely a decade back. Increase in the number of Airlines would encourage healthy competition and provide a level playing field to the operators. The result would only benefit the consumer. Considering the peculiar nature of slots allotment and its usage, the principle of slots allotment could not come within the commercial wisdom of the CoC. As already held the slots being not assets of the Corporate Debtor, the CoC’s decision on protection of historicity would not be of any help to the Corporate Debtor - The success of the Resolution Plan and its implementation is contingent upon certain future events as provided under Clause 7.6 of the Resolution Plan. Since the revival of the Corporate Debtor is dependent upon these factors, the CoC has approved the Resolution Plan taking into consideration the necessity of the conditions which are integral to the successful implementation of the Plan. Thus, the effective date also depends upon the conditions being fulfilled. Despite the effective date being uncertain the CoC has approved the same. Considering the peculiarity of the facts and totality of the circumstances, we feel it appropriate to agree with such decision of the CoC and its fiscal prudence, subject to the following. The Resolution Plan doesn’t take into account the dues of the employees and workmen during the CIRP period in view of the fact that except for 50 employees retained as ‘Asset Preservation Team’ of the Corporate Debtor none of the other employees or workmen were under the employment of the Corporate Debtor nor did they work for the Corporate Debtor during that period. Decision in that regard appears to be reasonable based on the principle of ‘no work no pay’. The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37 and 38 of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved as provided under Section 31 of the Code - Application allowed.
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