TMI Blog2018 (9) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is disposed of accordingly. - IA No. 162,180,208,209 And 237/2018 In CP (IB) No. 52/9/HDB/2017 - - - Dated:- 19-7-2018 - MR. BIKKI RAVEENDRA BABU, JUDICIAL MEMBER For The Appearing Parties : V.K. Sajith, Ld. Counsel, S. Ravi, Sr. Counsel, Shantanu Chaturvedi, Adv., R.S. Sachdeva, C. Prabhakar, Ld. Counsel, S.V. Rama Krishna, Ld. Counsel, A. Venkatesh, Ld. Counsel, Mrs. JVL Bharati, Ld. Counsel and Syed Yaqoob Sajjad, Ld. Counsel COMMON ORDER 1. The Resolution Professional filed this Application U/s 30(6) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 seeking approval of the Resolution Plan Annexure- K (colly). 2. The facts in brief that are necessary for the disposal of IA 180/2018 are as follows:- 3. M/s. Rama Road Lines/Operational Creditor triggered the Corporate Insolvency Resolution Process in respect of The Sirpur Paper Mills Ltd. U/s 9 of the IB Code by filing CP(IB) 52/9/HDB/2017. This Adjudicating Authority, by its order, dated 18.09.2017, commenced Corporate Insolvency Resolution Process by appointing M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n satisfied made a certification to the CoC. 12. The Resolution Professional apprised the CoC that the Resolution Plan was Conditional one, which was subjected to various benefits and concession envisaged from the Govt. of Telangana, which was offered by the Govt. of Telangana through their letter to the investor to the Resolution Applicant. 13. The Resolution Professional wrote to the Principal Secretary to the Government, Commissioner for Industrial Promotion Mines, Govt. of Telangana, on 17.02.2018, regarding confirmation by the Industry and Commerce Department of the Government of Telangana, the Benefits Concessions sought by the Resolution Applicant, in pursuant to the Letter of the Principal Secretary dated 09.11.2017. 14. In its meeting held on 22.02.2018, the Resolution Applicant submitted revised Resolution Plan. The Resolution Professional placed the revised draft Resolution Plan before the CoC on 05.03.2018. The CoC decided to wait for the confirmation relating to various benefits and concessions offered by the Govt. of Telangana. 15. The CoC instructed Resolution Professional to seek an extension of CIRP Process period for 90 days and accordingly Resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 533.39 135.00 Equity Shares (buy back in 12 months) 43.00 Preference Shares (0.01% coupon with 20 years maturity) 162.00 Total 533.39 340.00 Workmen Dues 16.89 10.00 Employees Dues 27.60 0.67 Retirement Benefits of Employees - 8.72 Operational Creditors 95.71 9.50 Total payment to all stakeholders 673.59 371.04 24. The Resolution Applicant has proposed the following sources and use of funds based on the business requirements of the Corporate Debtor reserving its right to vary, alter or modify the funding proposed below:- INR Cr. Sr. No. Particulars Settlement Phase I Phase II Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . FURTHER RESOLVED THAT pursuant to Regulation 39(3A) of IBBI (CIRP) Regulations, 2016, the COC while approving the Resolution Plan under Section 30(4) of the Code confirms that the Resolution Plan specifies the amount payable from the resources as specified under Regulation 38(1) of IBBI (CIRP) Regulations, 2016. FURTHER RESOLVED THAT pursuant to Section 30(4) of the Code and Regulation 39(3) of IBBI (CIRP) Regulations, 2016 after considering its feasibility and viability, COC approves the Resolution Plan submitted by the Resolution Applicant, M/s. JK Paper Limited dated 30th April, 2018 and authorize Resolution Professional to submit the Resolution Plan as approved by the CoC to the Adjudicating Authority as required under section 30(6) of the Code and Regulation 39(4) of the IBBI (CIRP) Regulations, 2016 for getting the approval from the Adjudicating Authority under Section 31 of the Code. Voting Result: Name of CoC Member Voting share Result IDBI Bank 41.98% Voted in favour of the Resolution Plan State Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution Plan, as approved by the CoC, under sub-section (4) of section 30 meets the requirements as referred to sub-section (2) of Section 30. 31. Therefore, it is necessary to refer to sub-section (2) of section 30, which reads as follows:- Submission of Resolution Plan. Sec. 30 30.(1) A Resolution Applicant may submit a Resolution Plan to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each Resolution Plan received by him to confirm that each Resolution Plan- (a) Provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the repayment of other debts of the Corporate Debtor; (b) Provides for the repayment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the Corporate Debtor under section 53; (c) Provides for the management of the affairs of the Corporate Debtor after approval of the Resolution Plan; (d) The implementation and supervision of the Resolution Plan; (e) Does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of their claims also stated that they have no rejection for the approval of the Resolution Plan. 36. In the case on hand, the Resolution Plan, as approved by the CoC, is a conditional Resolution Plan and the integral part of the Resolution Plan is having certain concessions given by the Government of Telangana. 37. In this context it is necessary to make a mention. But for the G.O.Ms No. 18 issued by the Government of Telangana it would not have been possible to revive the Corporate Debtor. The Resolution Plan, if approved, would revive the Corporate Debtor and it would help all the stakeholders. The concessions given by the Government of Telangana in making this Resolution Plan valid and sustainable Resolution Plan goes a long way and help the Resolution Applicant to commence the operations of the Corporate Debtor. 38. The revival of the Corporate Debtor company would certainly enhance the interest of all the stakeholders and the economic conditions in the area, in which the Corporate Debtor company is situated. 39. In view of the finding that the Resolution Plan, as approved by the CoC, is in accordance with the sub-section 2 of section 30 and the Resolution Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Executive Director CEO of the Company and in the AGM held on 29.09.2017 the IRP, Mr. Mahadev Tirunagari appointed by this Authority was also present. 49. It is stated by the Applicant that after the admission of CP(IB) 52 of 2017 in respect of the Corporate Debtor, this Adjudicating Authority by its Order, dated 18.09.2017, appointed Mr. Mahadev Tirunagari, Insolvency Professional as Interim Resolution Professional. The said IRP sent an e-mail, dated 29.09.2017, which reads as under: - As per the provisions of IBC and corresponding regulations, IRP can appoint any person to undertake and oversee the affairs of the company and report to IRP. In this regard, I appoint Mr. N. Veda Kumar as CEO of the Company to undertake and oversee the affairs of the company and is also required to report to the IRP i.e. myself. He is also further advised to delegate any of his responsibilities. But the single point of contact would be CEO for the IRP. In case of any inevitable conditions wherein the CEO is unable to attend his duties and responsibilities, he is suggested to provide an alternative with the approval and confirmation from the IRP. 50. The Applicant acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffairs as can be seen from the e-mail, dated 14.10.2016 on the ground that No Objection Certificate (NOC) from the lenders has not been furnished. 60. The Resolution Professional stated in the reply that the reappointment of the Applicant for the period from 23.01.2017 to 22.01.2019 on a remuneration of ₹ 1.50 lakhs per month is also without the approval of the CoC members. 61. The Resolution Professional stated that in view of the Section 17(l)(b) of the Code, the powers of the Board of Directors stand suspended and such powers are vested in the Interim Resolution Professional. 62. The appointment of the Applicant in the 8th Annual General Meeting held on 29.09.2017 has also not been approved by the MCA on the ground that no NOC from the lenders (members of the CoC) has not been furnished. 63. The MCA also raised the objection that the resolution is signed by the suspended Director. 64. It is stated by the Resolution Professional that Interim Resolution Professional by his email dated 18.06.2018 informed that the appointment of the Applicant is no a fresh appointment and it is a continuation of the existing position. The Applicant took permission to go on le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to his credit which earns salary for him. 83. In the absence of such documents it cannot be said that Applicant is entitled for salary during his leave period even if it's a leave with the permission of IRP. 84. Therefore, the Applicant was on duty from 23.01.2017 to 20.10.2017. The Applicant is paid salary upto 18.09.2017. That means Applicant has not been paid salary from 19.09.2017 to 20.10.2017. 85. In view of the fact that the Applicant worked as CEO during the period from 19.09.2017 to 20.10.2017 he is entitled for his salary but not by way of a claim filed during the CIRP Process Period. 86. The claim has to be filed by the employees only as on the date of commencement of CIRP Process Period. 87. The adjudication of the claims that arose after the commencement of CIRP Process Period is not covered by Form-B,C,D. 88. Therefore, it is open for the Applicant to claim his salary at an appropriate time in an appropriate forum for a period from 19.09.2017 to 20.10.2017. 89. In view of the above discussion the rejection of the claim of the Applicant to the extent of ₹ 8.10 is sustainable. 90. Hence the Applicant is not entitled for any relief i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1143 22/06/2014 supply 81,473.20 0.00 81,473.20 8. 1203 26/06/2014 supply 92,941.38 0.00 92,941.38 9. 1205 26/06/2014 supply 89,739.68 0.00 89,739.68 10. 1206 26/06/2014 supply 92,400.09 0.00 92,400.09 11. 1251 28/06/2014 supply 91,340.53 0.00 91,340.53 12. 1261 28/06/2014 Fixed Facility 68,764.62 0.00 68,764.62 13. 1277 30/06/2014 supply 80,934.80 0.00 80,934.80 14. 1305 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une '14 137,491.43 0.00 137,491.43 29. 1566 20/07/2014 supply 82,737.26 0.00 82,737.26 30. 1623 24/07/2014 supply 94,265.93 0.00 94,265.93 31. 1624 24/07/2014 supply 93,727.54 0.00 93,727.54 32. 1661 26/07/2014 supply 94,265.93 0.00 94,265.93 33. 1662 26/07/2014 supply 86,330.46 0.00 86,330.46 34. 1727 29/07/2014 Fixed Facility 68,764.32 0.00 68,764.32 35. 1754 31/07/2014 supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.00 98,233.67 50. 2073 20/08/2014 supply 86,868.85 0.00 86,868.85 51. 2122 23/08/2014 supply 80,209.14 0.00 80,209.14 52. 2144 24/08/2014 supply 81,648.76 0.00 81,648.76 53. 2145 24/08/2014 supply 96,068.39 0.00 96,068.39 54. 2179 26/08/2014 Fixed Facility 68,764.32 0.00 68,764.32 55. 2213 28/08/2014 Supply 96,431.22 0.00 96,431.22 56. 2246 30/08/2014 Supply 96,431.22 0.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71. 2652 22/09/2014 Supply 72,098.11 0.00 72,098.11 72. 2723 27/09/2014 Fixed Facility 68,764.32 0.00 68,764.32 73. 2937 14/10/2014 38,547.00 0.00 38,547.00 74. 2978 16/10/2014 Power Esc. Sept'14 93,265.80 0.00 93,265.80 75. 91822678 28/10/2014 Fixed Facility 61,200.00 0.00 61,200.00 76. 3384 13/11/2014 Short Lifting Sept '14 (partly) 114,177.82 0.00 114,177.82 77. 91387711 13/11/2014 Short Lifting Oct'14 654,286.33 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91. 92119499 28/09/2015 Fixed Facility 61,200.00 0.00 61,200.00 92. 92147249 29/10/2015 Fixed Facility 61,200.00 0.00 61,200.00 93. 3375 25/11/2015 Fixed Facility 61,200.00 0.00 61,200.00 94. 3894 25/12/2015 Fixed Facility 61,200.00 0.00 61,200.00 95. 4453 25/01/2016 Fixed Facility 61,200.00 0.00 61,200.00 96. 5062 25/02/2016 Fixed Facility 61,200.00 0.00 61,200.00 97. 5582 25/03/2016 Fixed Facility 61,200.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95. It is stated that invoices mentioned in item Nos. 5, 24, 28, 44, 46, 62, 65, 74 and 103 to 109 were raised due to the escalation in the prices of the material in accordance with the Escalation Clause in the Purchase Order. 96. The invoices mentioned in item Nos. 76, 77, 81, 83 were raised in accordance with the Minimum Take or Pay clause mentioned in the Purchase Order. 97. The Minimum Take or Pay clause creates an obligation on the part of the Applicant to supply minimum quantity and in case, the minimum quantity is short supplied, the Corporate Debtor is entitled to raise a debit note for the short supplied quantity for differential cost of procurement from other source subject to minimum @ ₹ 6.05 per SM3. In case, if the Corporate Debtor failed to lift the minimum quantity, the Applicant is entitled to raise a debit note for the short lifted quantity @ ₹ 6.05 per SM3. 98. The invoices mentioned in the item Nos. 12, 34, 54, 72 ,75, 78, 80, 82 and 84 to 99 were raised in accordance with the Facility Charges clause mentioned in the Purchase Order, which states that the Applicant shall install 1 No. 20KL VIE and AV Coil for maintaining Liquid Oxygen suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d requested to release the same. 107. The Resolution Professional informed the Applicant by email dated 09.02.2018 stating that Corporate Debtor in under CIRP Process and the Moratorium has been imposed and during Moratorium, no goods can be removed from the premises of the Corporate Debtor. 108. On 06.10.2017 i.e. before the dead line 08.10.2017 the Applicant submitted proof of claim in Form - under Regulation 7 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 substantiating the claim including the documents invoices and details of debt. 109. A claim status was released by Resolution Professional on 23.04.2018 with details of the operational creditors, amount claimed by the operational creditors, amount admitted by the Resolution Professional, amount rejected and reasons as to the rejection of the claim in the said claim status. 110. At Sl. No. 150 claim of the Applicant is mentioned stating that the claim is for ₹ 1,01,32,362/- and the admitted amount is ₹ 51,67,213/-. The Resolution Professional rejected ₹ 49,65,149/- out of the total amount claimed by the Applicant. The Resolution Professional stated that the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or from the Applicant. The Applicant claimed for short lifting and fixed charges against invoices at Sl. Nos. 73 to 99. 121. The Resolution Professional admitted the claim of ₹ 51,67,213 out of total ₹ 1,01,32,362 and rejected the rest amount of ₹ 49,65,149. 122. It appears that the Resolution Professional, based on the accounts maintained by the Corporate Debtor, admitted the claim to the extent of ₹ 51,67,213 as on 31.03.2015. 123. According to the Resolution Professional, due to the closure of the operations of the factory from 24.09.2014, there is a short lifting. According to the Resolution Professional, due to sustaining labour situation prevailing in the Corporate Debtor premises, the Applicant cannot lift the equipments lying in the Corporate Debtor premises and on that account the Applicant claimed the facility charges. 124. The claim of the Applicant involves legal aspects namely, whether the Applicant is entitled to claim facility charges and short lifting charges or not. 125. Taking into consideration the fact that the operations of the factory has been closed from 24.09.2014, this aspect has to be gone into while determining the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 7,83,50,198/- as per the Award passed by the Arbitral Tribunal. 137. The Corporate Debtor filed an appeal against the award passed by the Arbitral Tribunal and the same was dismissed on 01.12.2016. 138. Pursuant to the advertisement given by the Interim Resolution Professional inviting claims against the Corporate Debtor, the Applicant had filed a claim petition in Form B before the Resolution Professional on 06.01.2018 claiming ₹ 7,83,50,198/-. 139. The Applicant addressed an email dated 11.03.2018 to the Resolution Professional requesting him to update on its claim. 140. The Applicant came to know through newspapers that Resolution Plan in respect of Corporate Debtor was approved by the CoC and it is under consideration of NCLT, Hyderabad. 141. On seeing the said news item, the Applicant checked the website of the company and to its surprise found that in the list of operational creditors of the Corporate Debtor as on 15.05.2018 the claim of the Applicant is not admitted and the following remark is found:- Copy of order regarding dismissal of appeal filed against the award has not been submitted thus it sees that the matter is subjudice before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l filed by the Corporate Debtor has been dismissed by the Appellate Tribunal and the Resolution Professional is ready to include the claim of the Applicant in the list of the claims of the operational creditors. 154. The Resolution Professional is also ready to pay to the operational creditor from out of the amount reserved for operational creditors in the Resolution Plan on proportionate basis along with other operational creditors. 155. In these set of facts, this Application is disposed of with a direction to the Resolution Professional to include the claim of the Applicant in the claims of the operational creditors and pay the Applicant from out of the amount reserved for payment to operational creditors in the Resolution Plan on proportionate basis along with other operational creditors. 156. This Application is disposed of accordingly. IA 162/2018 157. This Application is filed by M/s. Rama Road Lines and its sister concerns along with the affidavit of Mr. Venna Kishore Babu, Proprietor of the Applicant firms seeking a direction to the Resolution Professional of the Corporate Debtor to pay an amount of ₹ 3,50,000/-. 158. It is stated by the Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CoC in not approving the expenditure incurred in making public announcement in Form A by Mr. Kishore Babu Venna and Resolution of the CoC that the fee of the IRP for first 30 days has to be paid by the Applicant are in accordance with the provisions of the IB Code and the relevant Regulations and circulars of IBBI. 170. Section 13(2) says that a public announcement about the initiation of Corporate Insolvency Resolution Process and calling for submission of claims u/s. 15 shall be made immediately after the appointment of IRP. 171. Sec. 15 of the Code lays down what the public announcements should contain. 172. In this context it is necessary to refer to sec. 5(13) of the Code which reads as follows:- Insolvency Resolution Process costs means- (a) The amount of any interim finance and the costs incurred in raising such finance; (b) The fees payable to any person acting as a resolution professional; (c) Any costs incurred by the resolution professional in running the business of the Corporate Debtor as a going concern; (d) Any costs incurred at the expense of the Government to facilitate the insolvency resolution process; and (e) Any other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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