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2019 (7) TMI 510 - AT - Insolvency and BankruptcyValidity of Resolution plan - HELD THAT:- No ground is made out to entertain the appeal preferred by Appellant- Mr. Prashant Ruia or by the Intervenor- ‘Essar Steel Asia Holdings Limited’- shareholder of the ‘Corporate Debtor’. An issue which has been settled by the Hon’ble Supreme Court i.e., eligibility of ‘ArcelorMittal India Pvt. Ltd.’ as a ‘Resolution Applicant’ for ‘Essar Steel India Limited’, cannot be re-agitated again and again. Any such attempt is clearly barred by the principles of res judicata - Therefore, the Application preferred by the Appellant- Mr. Prashant Ruia and Intervenor- ‘Essar Steel Asia Holdings Limited’ deserves to be rejected. Whether the ‘Committee of Creditors’ can delegate its power to a ‘Sub Committee’ or ‘Core Committee’ for negotiation with the ‘Resolution Applicant’ for revision of plan? - whether the ‘Sub Committee’ or the ‘Committee of Creditors’ are empowered to distribute the amount amongst the ‘Financial Creditors’ and the ‘Operational Creditors’ and other Creditors? - HELD THAT:- A ‘Sub-Committee or ‘Core Committee’ is unknown and against the provisions of the ‘I&B Code’. There is no provision under ‘I&B Code’ which permits constitution of a ‘Core Committee’ or ‘Sub-Committee’ nor the ‘I&B Code’ or Regulations empowers the ‘Committee of Creditors’ to delegate the duties of the ‘Committee of Creditors’ to such ‘Core Committee’/ ‘Sub- Committee’. From sub-clause (b) of sub-section (2) of Section 30, it is clear that the ‘Resolution Professional’ is required to notice whether the ‘Resolution Plan’ provides for the payment of the debts of the ‘Operational Creditors’ in such manner as may be specified by the Board. The said provision makes it clear that the ‘Resolution Applicant’ in its ‘Resolution Plan’ must provide the amount it proposes to pay one or other Creditors, including the ‘Operational Creditors’ and the ‘Financial Creditors’ - Sub-section (3) of Section 30 suggests that the ‘Resolution Professional’ is required to present before the ‘Committee of Creditors’, the ‘Resolution Plan’ which confirms the conditions referred to in sub-section. Sub-section (4) of Section 30 provides that the ‘Resolution Plan’ is required to be approved by a vote of not less than 66% of voting share of the ‘Financial Creditors’, after considering its feasibility and viability and such other requirements as may be specified by the Board. Thereby, all members of the ‘Committee of Creditors’ who are present are required to go through the ‘Resolution Plan’ to find out whether it is in accordance with sub-section (2) of Section 30; and whether it’s feasible and viable and meets all the requirements as specified by the Board as also whether the ‘Resolution Applicant’ is ineligible in terms of Section 29A of the ‘I&B Code’ or not. From Regulation 38, particularly clause (1A), it is clear that ‘Resolution Plan’ must include a statement as to how it has dealt with the interests of all stakeholders, including ‘Financial Creditors’ and the ‘Operational Creditors’, of the ‘Corporate Debtor’ - the distribution of amount to the ‘Operational Creditors’, ‘Financial Creditors’ and other stakeholders are to be made by the ‘Resolution Applicant’ and required to be reflected in the ‘Resolution Plan’. The ‘Committee of Creditors’ has no role to play in the matter of distribution of amount amongst the Creditors including the ‘Financial Creditors’ or the ‘Operational Creditors’. The ‘Committee of Creditors’ is only required to notice the viability, feasibility of the ‘Resolution Plan’, apart from other requirements as specified by the Board and ineligibility of the ‘Resolution Applicant’ in terms of Section 29A. Section 53 cannot be made applicable for distribution of amount amongst the stakeholders, as proposed by the ‘Resolution Applicant’ in its ‘Resolution Plan’. The ‘Financial Creditors’ cannot be discriminated on the ground of ‘Secured’ or ‘Unsecured Financial Creditors’ for the purpose of distribution of proposed amount amongst stakeholders in the ‘Resolution Plan’ by the ‘Resolution Applicant’. Where the ‘Successful Resolution Applicant’ does not pay the total dues to the Creditors such as the ‘Financial Creditors’ or the ‘Operational Creditors’ but pays lesser amount than the claim, then in such case, the profit should be distributed amongst all the Creditors including the ‘Financial Creditors’ and the ‘Operational Creditors’ - after the distribution of the amount of ₹ 42,000 Crores in a manner as shown in the preceding paragraphs, if any amount is found to have been generated as profit during the ‘Corporate Insolvency Resolution Process’ after due verification by the Auditors, it should be distributed amongst all the ‘Financial Creditors’ and the ‘Operational Creditors’ on pro-rata basis of their claims subject to the fact that it should not exceed the admitted claim.
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