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2019 (5) TMI 1633 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHIValidity of Resolution Plan - grievance of the Appellant- ‘Indian Bank’ is that the claim of the Bank has not been properly decided and the ‘Resolution Plan’ did not take care of the report of the valuers - contravention of the provisions of Section 30(2) of the ‘I&B Code’ - HELD THAT:- We find that Mr. K. Vijay Bhaskar Reddy and Mr. P. Madhu, who were appointed as the valuers to determine the value of the ‘Corporate Debtor’, valued it as ₹ 681 Crores and ₹ 513 Crores, respectively. However, Mr. K. Vijay Bhaskar Reddy admitted that he had prepared the valuation Report at the behest of ‘Indian Bank’. A third Valuer, ‘Duff and Phelps’ who valued the ‘Corporate Debtor’ at ₹ 352 Crores, therefore, the definite conclusion about the liquidation value of the ‘Corporate Debtor’ cannot be derived except by taking average of the three valuation. The ‘Committee of Creditors’ has also accepted the average of the liquidation value which comes to ₹ 597.54 Crores and on the basis of which the ‘Resolution Plan’ was considered. If the ‘Resolution Plan’ is considered, then it will be evident that 25% of the admitted dues of the ‘Financial Creditors’ have been allowed in the ‘Resolution Plan’. On the other hand, the ‘Operational Creditors’ have been discriminated. The liquidation value being ₹ 597.54 Crores, the upfront payment suggested by the ‘Resolution Applicant’ being less i.e., ₹ 477 Crores, the payment to the ‘Operational Creditors’ is lower than the proportionate liquidation value, therefore, the ‘Resolution Plan’, as approved by the Adjudicating Authority is against Section 30(2) (b) of the ‘I&B Code’. In Binani Industries Limited vs. Bank of Baroda & Anr. [2018 (3) TMI 1604 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] this Appellate Tribunal taking into consideration the viability and feasibility of the ‘Resolution Plan’, held that there cannot be any discrimination amongst the same set of group such as ‘Financial Creditors’ or ‘Operational Creditors’ and the ‘Operational Creditors’ must get roughly the same treatment as ‘Financial Creditors’, and if they are not, such plans are to be rejected or modified so that the ‘Operational Creditor’s’ rights are safeguarded - In the present case, as we find that the ‘Operational Creditors’ have been discriminated and not given the same treatment as ‘Financial Creditors’, the impugned order approving the ‘Resolution Plan’ cannot be upheld. Whether the order approving the ‘Resolution Plan’ should be set aside or the said plan should be substituted with certain modification to ensure successful Resolution? - HELD THAT:- It is open to the ‘Committee of Creditors’ to negotiate and ask the ‘Resolution Applicant’ to revise its plan, if it does not confront with the ‘I&B Code’. Such power being vested with the ‘Committee of Creditors’, it is also open to the Adjudicating Authority and this Appellant Tribunal to ask the ‘Resolution Applicant’ to appropriate modification in the plan to make it in consonance with the provisions of the ‘I&B Code’ and thereby to substitute the plan with modification - In the present case, as we noticed that the upfront amount of ₹ 477 Crores is much less than the average liquidation value of ₹ 597.54 Crores, we find that the ‘Resolution Applicant’ wants to take the assets of the ‘Corporate Debtor’ at a lessor value than the value which may be received on liquidation. ‘M/s. Maharashtra Seamless Ltd.’ should increase upfront payment of ₹ 477 Crores as proposed to the ‘Financial Creditors’, ‘Operational Creditors’ and other Creditors to ₹ 597.54 Crores by paying additional ₹ 120.54 Crores approximately to make it at par with the average liquidation value of ₹ 597.54 Crores. If the upfront amount is increased to ₹ 597.54 Crores, the total amount should be distributed amongst the ‘Financial Creditors’ and the ‘Operational Creditors’ at same ratio as suggested. As per suggestion of the ‘Resolution Applicant’, the ‘Operational Creditors’ can be given same percentage of amount as allocated to the ‘Financial Creditors’ - If the ‘Resolution Applicant’ fails to undertake the payment of additional amount of ₹ 120.54 Crores in addition to ₹ 477 Crores thereby raising it to ₹ 597.54 Crores (total) and deposit the amount in the Escrow Account within 30 days in such case, the impugned order of approval of the ‘Resolution Plan’ be treated to be set aside. Thereafter, the Adjudicating Authority will pass appropriate order in accordance with law. Appeal disposed off.
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