TMI Blog2018 (12) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... ans which would have enabled the COC to consider the same and come to a conclusion. As against the claim made by the Creditors including the Financial Creditors, Operational Creditors whether secured or not aggregating to a sum of ₹ 86,16,30,246 the fair value as well as the liquidation value as made available to this Tribunal based on its direction by the Resolution Professional does not even come to l/5th of the amount claimed, taking into consideration, both the fair value and as well as the liquidation value which falls well below the total claims. The resolution of the CoC made on 08.08.2018 to go in for liquidation mode after rejecting the sole Resolution Plan of the directors whose powers stood suspended had not been challenged by any of the parties before this Tribunal and in the circumstances, taking into consideration the provisions of Section 33(1) of IBC, 2016 and in view of the period of CIR process having expired, namely, 270 days period and since no resolution plan has been approved but on the other hand, the CoC has rejected the resolution plan under Section 31 of IBC, 2016 this Tribunal is constrained to pass an order requiring the Corporate Debtor, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been filed by the RP from time to time discloses the following: - 3. On 15.11.2017 the petition as filed by the Union Bank of India was admitted and the CIRP process was initiated against the Corporate Debtor by the said order. The Interim Resolution Professional as proposed by the Financial Creditor was also appointed as an Interim Resolution Professional (IRP) by New Delhi Bench of this Tribunal. On 17.11.2017, a public announcement seeking for claims from the creditors of the Corporate Debtor as contemplated in relation to Insolvency Resolution Process for Corporate Persons (IRPCP) as prescribed by IBBI had been affected. Consequent to the publication by way of public announcement made in Times of India, Jaipur, Kolkata and Bhuvneshwar Editions and the Raj Express in Rajasthan, Aajkaal (Bengali) and Nitidin (Odia) where Registered Office, Principal Office and the Factory of the Corporate Debtor were respectively situated. Pursuant to the public announcement the claims from both the Financial Creditors as well as Operational Creditors is stated to have been received by the IRP and as per the status report filed on 13.12.2017, it is seen that the Financial Creditors with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled vide Diary No. 2713/2018 dated 09.05.2018 with this Tribunal by the RP of the Second Meeting of Committee of Creditors (CoC) which was held on 30th January, 2018 and the minutes in relation to the same has also been enclosed, where from it is seen that other than three Financial Creditors already mentioned as above who attended in the First CoC meeting, one other financial Creditor was also permitted to attend the said CoC meeting. Perusal of the minutes of the Second CoC meeting discloses that in relation to the classification of Gangpur Weavers Co-operative Spinning Mills Limited ( Gangpur ) there had been a difference of opinion as to whether it should be classified as a 'Secured Financial Creditor' or as an 'Operational Creditor'. Upon a detailed consideration of the provisions of IBC, 2016, the CoC reiterated the said person as an Operational Creditor having more than 10 per cent of the total debt claims received up to 25.01.2018. It is also evident that the request for Interim Finance for a sum of ₹ 25,00,000/-for payment of salaries to staff and for essential services were also made by RP. 7. However, no obvious decisions have been taken in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cost of ₹ 21,50,000/- seems to have been also approved and funding in relation to the same it is stated shall be made by Union Bank of India in a separate escrow account maintained for the said purpose. 11. In relation to the Information Memorandum, it is seen that the RP had reported before the CoC that some time may be required for its preparation as necessary information could not be obtained from the Corporate Debtor due to absence of right manpower and also the employees who had remained with Corporate Debtor becoming hostile due to non-payment of their salaries or wages as the case may be. 12. The RP, it seen had also apprised the fourth CoC about the necessity for obtaining the expression of interest or in other words, invitation of resolution plans to be made in Form-G and for which purpose a resolution matrix seems to have been also placed to assist the Resolution Applicants as noted above in paragraph supra. Pursuant to all these deliberations in the CoC, publication of expression of interest in Form-G was made on 30.04.2018. 13. In the meanwhile, as the 180 days period as contemplated for completion of CIRP under Section 12 of IBC, 2016 was approaching, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing an MSME and in the circumstances they are qualified to submit a Resolution Plan by virtue of amendments made to Section 29A of IBC, 2016 and based on the above representation it is recorded in the minutes of Sixth CoC that keeping in mind the spirit/ provisions of IBC, 2016, the CoC consented for the submission of Resolution Plan by the Directors of the Corporate Debtor. 16. Consequent to this decision of the CoC, a Resolution plan was took forward by one Sh. Mayank Patodia and Sh. Prateek Patodia dated 04.08.2018 and it seems to have been considered by the COC in its Seventh meeting held on 4th August, 2018 and the persons who had submitted their Resolution plans were addressed with several queries by the major Financial Creditor being, Union of India who had also sought for some time to critically examine the Resolution Plan in the said meeting held on 04.08.2018. 17. In the circumstances, it is seen that the eighth meeting of COC was fixed on 8th August, 2018. Consequent to the decision on 4th August, 2018, the eighth meeting of COC on 8th August, 2018 was duly held, wherein by Item No. 5 as reflected in the minutes of the 8th CoC meeting, the Committee of Creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Votes cast against approval of Resolution Plan: 95.3% 100.0% Therefore, on the basis of the above voting results, the Resolution Plan submitted by the Corporate Debtor was rejected with 95.3% voting share. In the above view of the matter, the Committee of Creditors recommend that under the provisions of the Insolvency and Bankruptcy Code, 2016, the Hon'ble NCLT be approached for issue of necessary orders for liquidation of the Corporate Debtor, Ashoka Mills Limited. It is pertinent to note that the said meeting of Committee of Creditors, being the eighth Meeting held on 8th August, 2018, was attended by the representative of the Financial Creditor having 100 per cent voting share. In addition to the Board of Directors of the Corporate Debtor whose powers stood suspended by virtue of admission of the CIRP of the Corporate Debtor on 16.07.2018 were also in attendance in the said meeting. 18. Consequent to the above Resolution passed wherein the resolution plan stood rejected by voting strength of 98.30 per cent which is in excess of that prescribed under the provisions of IBC, 2016, the resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution of the Corporate Insolvency of a Corporate Debtor and that the liquidation should be a last resort. 21. In the present instance, we find that the sole resolution plan filed by the Board of Directors of the Corporate Debtor, namely, Mr. Mayank Patodia, Mr. Pawan Kumar Patodia Mr. Prateek Patodia respectively had been considered and rejected by the COC in the meeting held on 08.08.2018 based on the resolution which has been fully extracted as above in paragraph supra. 22. It is also evident that two persons who had initially shown interest by answering to the invitation of resolution plans, however, had subsequently withdrawn from submitting the resolution plans which would have enabled the COC to consider the same and come to a conclusion. 23. As against the claim made by the Creditors including the Financial Creditors, Operational Creditors whether secured or not aggregating to a sum of ₹ 86,16,30,246 the fair value as well as the liquidation value as made available to this Tribunal based on its direction by the Resolution Professional does not even come to l/5th of the amount claimed, taking into consideration, both the fair value and as well as the liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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