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2019 (7) TMI 1986 - Tri - Insolvency and BankruptcyApproval of Resolution plan - Maintainability of petition - winding-up petition against the Corporate Debtor is already pending before the Hon’ble High Court of Bombay, Nagpur Bench - Approval sought for closure of two units and revival of only one unit - HELD THAT:- This Company Petition No. 66/2017 is maintainable as no order of liquidation was passed, and only a Provisional Liquidator was appointed. Therefore, MA No. 105/2018 has been filed by Primo Pick N Pack Private Limited [2018 (11) TMI 559 - BOMBAY HIGH COURT] is rejected, keeping in view the order passed by the Hon’ble Bombay High Court in Jotun India Private Limited v PSL Limited [APPEAL LODGING NO. 68 OF 2018], ORDER DATED 26.07.2018 [2018 (7) TMI 1741 - BOMBAY HIGH COURT] to state that pendency of a winding up petition before the Hon’ble High Court cannot be a ground to reject any claim/ application made under IBC. As far as MA 689/2017 for approval of Resolution Plan u/s 30(6), IBC read with Regulation 39(4) of CIRP Regulations for approval of the resolution plan submitted by Dalmia, is concerned, it is understood that the plan has been approved by 100% vote share of the Committee of Creditors in the 11th CoC meeting held on 20.12.2017. With due regard to the decision of the Hon’ble Supreme Court in K Sashidhar & Indian Overseas Bank &Ors.[Civil Appeal No. 10673/2018], Date of order: 05.02.2019, [2019 (2) TMI 1043 - SUPREME COURT] the role of COC now is quite vital for deciding the fate of the company. It has been held that the Adjudicating authority is not required to go into the merits or reasoning of the decision taken by the COC for approval or rejection of a resolution plan. The only benchmark which is set up to be determined by the AA is to see whether the plan has been approved by 66% voting of the COC or not. Therefore, the commercial wisdom is not allowed to be interfered with. In this case, it is seen that the Resolution Plan provides for a total payment of ₹401,62,00,000/-, as against the liquidation value of the Corporate Debtor which is ₹231,10,00,000/-. Hence, one of the justifications for approval of the Resolution Plan is that the Liquidation Value is less comparing the proposals made in the Resolution Plan - It is noticed that despite the liquidation value payable to Operational Creditors being nil, the plan provides for payment of statutory dues and the liability towards the statutory dues is not extinguished. The Resolution Applicant wishes to run this business by reviving the cement undertaking as a going concern and selling the paper and solvent extraction units of the business - If the CoC is of the view that the Corporate Debtor is capable of being revived by reopening only one unit and the plan being approved by 100% CoC, it is presumed that sale of the two units of the Corporate Debtor is also a part of the commercial wisdom exercised by the CoC. Therefore, the same need not be interfered. On perusal of the resolution plan submitted by the Resolution Applicant Dalmia Cement (Bharat) Ltd, the bench has observed that the Resolution Plan does not discuss the “Source of Funds” of the Resolution Applicant and the same was submitted by the RP for Approval of the Bench. As per the Resolution Plan, clause 2.2.2 under the head “Source of Funds”, it is stated that “Resolution Applicant Commitment or by the Resolution Applicant”. It is quite strange that even the CoC and RP have approved the Resolution Plan without ensuring whether the funds are coming from the reserve and surplus, internal accruals of the Resolution Applicant or Loans from the Bank etc. Suggestions to the Government - Any haircut of more than 25% in cases where the total outstanding is more than Rs. 500 crores is not an ordinary course of business and shareholders who are the ultimate owners of the Financial Creditors and without their approval would undermine their ultimate rights as Shareholders and corporate democracy - May be, to begin with, approval of shareholders of Resolution Applicant, which is a listed Company can be made compulsory when the Resolution Plan consideration is more than Rs. 500 Crores and approval of Shareholders in other cases, i.e. Public Ltd Company/Private Ltd. The company, approval of shareholders may be made compulsory irrespective of the plan amount. Since certain modifications to the Resolution Plan, it further requires the acceptance by the Resolution Applicant. Therefore Resolution Professional is directed for seeking acceptance from the Resolution Applicant regarding proposed modifications - The acceptance report of the Resolution Applicant is to be filed by 12.07.2019. If acceptance of the proposed modification in the resolution plan is not submitted, then we shall proceed with the liquidation. List on 12.07.2019 for filing additional affidavit of Resoution applicant regarding accepetence of the modifications in the Resolution Plan.
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