2023 (1) TMI 996 - AT - Insolvency & Bankruptcy
Validity, Viability and Feasibility of Resolution Plan - Liquidation Value - Section 30 (6) (c) and 31 of the I & B Code, 2016 - main grievance of the Appellant is that, the mere glance of the Resolution Plan, makes it clear that the Resolution Applicant, had hijacked the Substantial Assets of the Corporate Debtor, at a Price, substantially below the Liquidated Value of the Corporate Debtor, as defined in Regulation 2 (k) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016.
HELD THAT:- In the present case, it is quite evident that the 2nd Respondent through a Resolution Plan, had offered Rs.50.70 Crores as Full and Final Settlement of all the Liabilities of the 1st Respondent / Corporate Debtor, which was duly approved with requisite majority of the Committee of Creditors, in its commercial wisdom, ofcourse, after numerous rounds of discussions and negotiations.
In this connection, this Tribunal, pertinently points out that in respect of the dues of the Workmen, initially only Rs.17 Lakhs was provided and at the behest of the Adjudicating Authority, the 2nd Respondent had revised the Resolution Plan and earmarked Rs. 34 Lakhs, towards the Workmen dues. Also that, a Sum of Rs.50.70 Crores was fully used in the payment of (a) CIRP Costs (b) the dues of the Financial Creditors and the Workmen. As such, no amount remains to be allotted in respect of the other Creditors. Therefore, the Liquidation Value, payable to the Operational Creditors, is Nil. Besides this, all the Creditors, had a significant haircut in the Corporate Insolvency Resolution Process of the 1st Respondent / Corporate Debtor.
Thus, keeping in mind the payment to all the Operational Creditors, is Nil, there is no aspect of discrimination between the Operational Creditors, in the considered opinion of this Tribunal. Further, when the ingredients of Section 30 (2) (b) of the I & B Code, 2016, are satisfied, the distribution is to be treated as Fair and Equitable one. After all, the Plea of the Fair and Equitable treatment is not between the different classes of Creditors, and the same is between the Operational Creditors, as a Class, as opined by this ‘Tribunal’.
In the instant case on hand, the 2nd Respondent, had undertaken to infuse approximately a Sum of Rs.20 Crores in the 1st Respondent / Corporate Debtor, when required for its revival, through its Group Companies, Promoters, Investors and Associates. Suffice it, for this Tribunal, to make a relevant mention that whether a certain Resolution Plan, leads to the maximisation of Value of the Assets or not is within the subjective realm of assessment of the Committee of Creditors, and the same cannot be a matter of enquiry - One cannot brush aside a vital fact that a Resolution Plan, as approved by the Committee of Creditors, in exercise of its subjective commercial wisdom, cannot be tinkered and tampered with, when the Resolution Plan, was approved with a Requisite Majority of 69.04%, after indulging in due discussions / deliberations, as regards the feasibility and viability of the Resolution Plan.
Be it noted, that the I & B Code, 2016, is not a Debt Enforcement Procedure, and the same cannot be used as a mechanism for the Recovery of Dues, for the Creditors. It is an axiomatic principle in Law, there is not rule for substituting any commercial term(s) of the Resolution Plan, approved by the Committee of Creditors, especially, in the teeth of the Resolution Plan, satisfying the requirements of the ingredients of the I & B Code, 2016.
An Adjudicating Authority (NCLT) or an Appellate Tribunal (NCLAT), cannot sit in an Appeal, to find out the Viability and Feasibility of Financial Matrix of such Resolution Plan, as opined by this Tribunal.
Thus, the Resolution Plan dated 07.01.2019, submitted by the 2nd Respondent / SPG Macrocosm Limited, through SPV Vision Textile (Resolution Applicant), was rightly approved by the Adjudicating Authority (Tribunal), which is free from any Legal Flaws, Resultantly, the instant Appeal sans merits and it fails.