TMI Blog2019 (2) TMI 1352X X X X Extracts X X X X X X X X Extracts X X X X ..... ppoint a new Liquidator. We hereby appoint Mr. Vijay Kumar V Iyer having registration no. IBBI/IPA-001/IP-P00261/2017-18/10490, e-mail id. viyer@deloitte.com and Ph. No. 9821219493. The RP is directed to handover all the documents/records to the liquidator. The Liquidator shall issue a public notice inviting interested investors from across the globe,in National level newspaper having all India circulation, in all the editions, stating that the Corporate Debtor is in liquidation. The maximum period applicable for trying the sale on a going concern basis of the Corporate Debtor will be only six months from the date of the order. In case the efforts to sell the company as a going concern fails during the stipulated period of six months, then the process of the sale of the assets of the company will be undertaken by the liquidator as prescribed under Chapter- III of IBC, 2016 and the relevant regulations of IBBI. The Designated Registrar is directed to send a copy of this order, to RoC under which this Company is registered. All powers of the Board of Directors, key managerial persons and the partners of the Corporate Debtor shall cease to affect and at this moment vest in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Customs. For The Employees, Workers, Contractor and Consultant : Adv. Jai Prakash Pawar, Mr Nimay Dare, Mr Prashant Bare. Mr. Manoj Mishra Adv., Zain Mookhi Adv., Arshil Shah Adv. Ms. Rashi Agrawal Adv. i/b Manilal Kher Ambalal Co. ORDER Per V. P. Singh, Member (Judicial) And Ravikumar Duraisamy, Member (Technical) 1. The MA No. 170 is filed by the RP seeking approval of the Resolution Plan submitted by Edelweiss Asset Reconstruction Co. Ltd (EARC) duly approved by the CoC by a vote share of 94.3 %. 2. Initially, the Company Petition No. 292/2017 was filed under section 7 of the Insolvency and Bankruptcy Code, 2016 ( IBC ) by Edelweiss Asset Reconstruction Company Ltd., Financial Creditor, for initiating Corporate Insolvency Resolution Process ( CIRP ) against Bharati Defence and Infrastructure Ltd., Corporate Debtor. 3. The petition was admitted vide order of this Tribunal dated 06.06.2017, and Mr Dhinal Shah was appointed as Interim Resolution Professional. The Interim Resolution Professional was later resolved by the Committee of Creditors to be appointed as Resolution Professional ( RP ). The CIRP period was extended vide an order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Payment as per liquidation waterfall - INR 35 crs (in full). Page 59 3. Payment to Financial Creditors (secured and unsecured) with o/s INR 11,373 crs * INR 400 crs at 10% interest to be paid at the end of 3 years. * INR 600 crs will continue as an unsustainable loan with 0.01% interest repayable after ten years as bullet repayment * INR 1000 crs debt at 0.01% interest would continue as convertible debt (option with RA) against which instrument may be issued at a later date - any unconverted portion of this would be repaid after 15 years. * Payment to ECL finance (priority loan included in total o/s) to be over and above this amount. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Company (before dilution). * During the implementation of the Plan, there will be timely payment of salaries to all workmen and employee. * Payment to be in a phased manner. Page 79, 68, 73, 111 6. Payment to Operational creditors with O/S of INR 187 crs * Payment of INR 9 crs in a phased manner. * Liquidation value due to them is NIL. * Payment after CIRP period will be timely. Page 76, 77, 111, 74 7. Payment of Statutory Dues of INR 270 crs * Payment is NIL. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Current capital structures are ~ 5 crs. shares of Face Value INR 10 each with ~40% promoter holding. * Since the net worth of the Company is completely eroded and the share does not have any book value, share capital will be written down in 2 rounds to ~ five lakhs share of FV INR 10 each. * The holding of the Promoters will be written down, and the new capital structure will have 68% held by Lenders, 10% by GOI, 20% for employee trust and balance 2% by Public Holding. * The Company will comply with SEBI guidelines at all times. * Further, the lenders will have option to issue preferential shares to the lender shareholder within the next five years to further dilute the non-lender shareholding ~10%. Page 66, 67, 68, 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s will be paid before any assenting lender has been paid. * Dissenting Financial Creditor shall also have the option to become assenting Financial Creditor within six months of the approval of the plan. * Liquidation value due to Dissenting creditors is as under: - LIC - INR 6.4 crs - APA Finance - INR 2.7 crs - UCO - INR 7.9 crs - Sicom - INR 3.3 crs - DBS - INR 7.5 crs - Syndicate - NIL (unsecured) - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional creditors of the corporate debtor. The relief sought in this application is, among other things, to direct the RP to pay the operational debt due as well as the lease rent of ₹ 9,82,000/-per month in respect to the plant and machinery and enabling works, materials that are owned by MEC Consultants but are lying at Corporate Debtor's yard in Dhabol till the time it is released. 10. The MA no. 482/2018 is filed by Poly-Tech Engineers, Operational Creditor of the Corporate Debtor whose part claims are disputed and not admitted. The relief sought in this application is, among other things, to make payment of the operational debt due and to update the debt amount due for the Poly-Tech Engineers. 11. The INVP no. 830/2018 is filed by Steadfast Shipping Private Limited, whose claims are not admitted by the RP. The relief sought in this application is, among other things, to direct the RP to furnish the bare boat charter agreement on which Steadfast Shipping Private Limited is basing its claim as a financial creditor and to make the payment due to it. 12. The MA no. 473/2018 is filed by Titagarh Wagon Limited whose claims are not admitted by the RP. The relief soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopment of a 'resolution plan' for the CD; (2) drafting resolution strategy/ plan; (3) work with financial creditors for approval of the appropriate resolution plan; (4) Understand commercial interest of different lenders and develop the tenets of a potential resolution plan; (5) prepare the draft resolution plan in the pre-IBC period that can be fine-tuned during the IBC based on the new information. RP is a partner of E Y. (f) An analogy has been drawn regarding EARC approving its resolution plan with the principle of law of property that a man cannot sell to himself and such a sale, if any, would be wholly void under the provisions of Transfer of Property Act, 1908, rationale being that the purchase price is likely to be depressed and undervalued as the mortgagee would not aim to achieve fair market value and would be in a position to manipulate the price as the mortgagee selling the said assets. 16. In the Reply filed by the RP to MA 584/2018, he has denied all allegations and stated that application filed with the sole intent to delay the grant of approval of resolution plan of the Corporate Debtor. It is stated that the RP verified and confirmed that out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CD and Great Offshore Limited are interrelated parties to each other. E Y was also appointed as the monitoring agency in respect of Great Offshore Limited which is also a related party of the CD. This is in clear breach of the provisions of the Code of Conduct as contained in the First Schedule to the IBBI (Insolvency Professionals) Regulations, 2016. The Applicants believes that the Resolution Plan submitted by the EARC is the plan which has been prepared by E Y under the service agreement read with the Proposal Document. In such case, the RP and EARC cannot be said to have duly examined the resolution plans submitted by all resolution applicants without bias and prejudice. Approval of EARC's resolution plan by the CoC wherein EARC itself accounts for approximately 83% vote share is in contravention of the principle nemo debet esse judex in propria causa. Further, any resolution plan proposed by such a Resolution Applicant shall ex facie be for its interest and not for other stakeholders. It has been stated that it would be unfair, unjust and inequitable to allow EARC to use its brute majority in the CoC to vote in favour of its Resolution which furthers its interest. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C;RP to consider the resolution plans submitted by various other resolution applicants in a fair and unbiased manner. The Contractors stated that their claims have been ignored by the RP and the CoC. They have submitted their claims to the Interim Resolution Professional, but they have not heard from either the Interim Resolution Professional or the RP. 22. In the Reply to MA 334/2018 filed by the RP, it has been contended that the present application is not maintainable and the reliefs sought cannot be granted by the Bench for being contrary to, and ultra vires the provisions of the IBC. It has been further stated that the application has been filed with the sole intent to delay the grant of approval of a resolution plan. The RP further states that out of the five resolution plans received, only one plan (which is of EARC) conformed with the requirements of the S. 30(2) of the Code. The RP further states that the purported contractors of the CD have no locus standi to question the commercial wisdom of the financial creditors in as much as the Approved Resolution Plan meets the requirements of the Code. With regards to resolution applicants, the RP submits that none of the resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o operational creditors of the Corporate Debtor are Rs. Four hundred fifty-six crores which are substantially less than the statutory requirement of 10% as provided u/s 24(3)(c) of IBC. Therefore, the operational creditors do not qualify for entry in the meetings of the CoC. With regards to the termination of employees, the RP states that prior approval of CoC was taken before termination of services. 27. In MA 170/2018, under the receipt of the Resolution Plan, the suspended Board of Directors have raised following objections vis- -vis the Resolution Plan: (a) Laying off/Right-sizing of the employees without mentioning the persons to be retained/ laid off. The plan sought for dispensation with the compliance of labour laws. (b) Prayer is made to seek an indefinite period of moratorium till a 'Monitoring Agency' is not appointed and a Board is not formed, which is in contravention of Section 31(3)(a) read with Section 14 and Section 5(14) of the IBC. (c) Clause 5(E)(28) of the Resolution Plan provides that if the plan is revoked or it fails, then the rights and remedies of the creditors will revive. This clause is in contravention of Section 31(1) of the IBC. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiated in the ordinary course of business of the CD. (o) The plan proposes to continue enforcement of the rights of the creditors against the guarantors despite the conversion of the debt into equity and to write off the debt by the lenders. This is in contravention of Section 134 of the Indian Contract Act. 28. We have tested the resolution plan in the light of Section 29A which lays down the ineligibility criteria for being a Resolution Applicant. The resolution applicant, Edelweiss Asset Reconstruction Company Limited ( EARC ) was incorporated in September 2009 as an asset reconstruction company by Edelweiss group along with a group of high net worth individual investors. The resolution applicant is not an undischarged insolvent neither a wilful defaulter. The resolution applicant is not ineligible under any of the clauses under section 29A of the Code. 29. Section 31(1) of IBC lays down that Adjudicating Authority shall approve the resolution plan, if it meets the requirements of section 30(2) of the Code. The proviso to section 31(1) provides that before passing the order for approval of the resolution plan, the Adjudicating Authority shall satisfy that the resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and period for each operational creditor subject to a total cap of ₹ 9 crores will be at the discretion of the new management/Board. 33. It is important to mention that Hon ble NCLAT in case of Binani Industries Ltd vs Bank of Baroda CA (AT) Insolvency No.82/2018 has held that: the law must ensure all key stakeholders will participate to collectively assess viability. The law must ensure that all creditors who have the capability and willingness to restructure their liabilities must be part of the negotiation process. The liabilities of all creditors who are not part of the negotiation process must also be met in any negotiated solution. The IB Code aims at promoting availability of credit. The credit comes from the Financial Creditors and the Operational Creditors. Either creditor is not enough for business. Both kinds of credits need to be on a level playing field. Operational Creditors need to provide goods and services. If they are not treated well or discriminated, they will not provide goods and services on credit. The objective of promoting availability of credit will be defeated. The IB code is for reorganisation and insolvency resolution of corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st to be converted into fresh term loan payable in five equal instalments starting from the end of the fourth year. The debt facility to carry an option of pre-payment based on cash flows of the company. It will reduce in proportion to dissenting financial creditors; (c) The unsustainable term loan of ₹ 600 crores would continue in the company carrying interest at 0.01% repayable after ten years as bullet repayment. (d) A debt with the principal of ₹ 1000 crores at the interest of 0.01% would continue in the company which at the option of the resolution applicant would be convertible to any instrument being issued by the company in future. Any remaining debt after conversion would be repaid by the company at the end of 15 years. The conversion would be carried out in a manner such that on fully diluted basis the lenders to hold - 90% equity of the company distributed amongst themselves in the ratio as given in Section 3(11) of the plan. Since, EARC TRUSTS are being given lower equity initially, their share in unsustainable debt will be higher to achieve the fully diluted shareholding mentioned earlier. Lenders will be allowed to write off this unsustainable debt ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivers. The plan contains a lot of uncertainties, a lot of speculation; the plan also envisages to allot equity shares to the Government of India towards various statutory dues. 41. The public shareholding in the company would be reduced to a mere 2% from the current substantial level of approx. 60%. 42. In addition to various waivers, relaxation sought, the resolution plan sought exemption from complying with SEBI-ICDR Regulations, especially relating to lock in period which was strongly opposed by other parties. 43. It is further stated in the plan that the company is also one of the very few private sector shipyards in India to have a defence warship building license. The order book of the company shows that it has pending orders of 24 defence vessels, 9 interceptor vessel, 5 Fast Speed Boats (Indian Coast Guard), 9 Water Sewage Barges, 1 Tank Cleaning Vessel. It is also stated in the plan that the key customers of the company are Indian Coast Guard, Indian Navy and Defence Research Development Organisation (DRDO). 44. The resolution plan provides for pending orders with the company. Details, as provided in the plan, shows that the company has live orders for twenty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of EARC, it appears that the plan provides for generation of income from its ongoing operations, from the existing liquid investment, existing cash balance, release of margin money, receipt from debtors, sale of Kolkata Yard, sale of Andheri Office other identified assets, sale of scrap, sale of land etc. and no upfront money is brought in by the Resolution Applicant. 47. It is provided in the plan that after approval of the plan, the company seeks to cancel the Defence order and further relief has been sought regarding the release of margin money and Bank Guarantee in favour of the company. Resolution Applicant is not infusing any cash in the company, but Resolution Applicant's investment is only by way of refund of SBI margin money, by the sale of Kolkata Yard, the sale of Andheri Office or Bank Guarantee Margin Money for executed vessels, the sale of land at Alibaug etc. The entire cash inflow is by way of sale of assets of the company and by getting the refund of SBI margin money and release of Bank Guarantee Money. The plan is against the contract terms, which has been executed by the company with Govt. Of India for getting defence contracts from Govt of India. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e asset in liquidation. 52. Hon'ble NCLAT in Binani Industries case supra has held that: the IB Code defines resolution plan as a plan for insolvency resolution of the Corporate Debtor as a going concern. ..... It is not a sale. No one is selling or buying the Corporate Debtor through a resolution plan. It is a resolution of the Corporate Debtor as a going concern. One does not need a resolution plan for selling the Corporate Debtor. If it were a sale, one can put it on a trading platform. Whosoever pays the highest price would get it. There is no need of voting or application of mind for approving resolution plan, as it will be sold at the highest price. One would not need, Corporate Insolvency Resolution Process, Interim Resolution Professional, Resolution Professional, Interim Finance, calm period, essential services, Committee of Creditors or Resolution Applicant and detailed Regulated Process for the purpose of sale. ..... It is not an auction. Depending on the facts and circumstances of the Corporate Debtor, Resolution Applicant may propose a resolution plan that entails change of management, technology, product portfolio on marketing strategy; acquisition or d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business unit has the potential of revival. It is stated in the plan that EARC as the lead lender is proposing a plan by way of which lenders will hold majority equity in the company, will run the operations of the company with the help of professional management team and over a period endeavour to find a suitable investor/buyer for the same. It is requested to this Tribunal and other authorities, in the resolution plan, to support in bringing the erstwhile promotors to the task, make good the imprudent transactions and allow financial creditors to run the company with the help of a professional management team till they find an investor for the company. 55. It is admitted that the resolution applicant is the lead lender holding 82.7% of share in financial debt, by which it may be presumed that it had access to certain information and proceedings of the CoC and the voting rights in the decision making of the CoC that a financial creditor would have. 56. When such a resolution plan, that is not with the intent of running the company, but to manage it for a specified period of time, three years as per plan, and then sell it to an investor, then it raises a doubt regarding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they would have no claims against the company or the Resolution Applicant. 59. The resolution plan proposes to right size the current workmen, employees and consultants employed/appointed by the company. For this, the plan proposes to first cancel all the existing contracts with the employees/workmen/consultants and extinguishing the rights of employees/workmen/consultants to raise claims against the company without complying with the requirement of labour laws and this the resolution plan proposes to do by order of this Tribunal. The company would then enter into new contracts with employees/workmen, that is proposed to be retained, on revised terms as per the operational requirements of the company. The counsel for the employees, workmen and even the suspended directors vehemently opposed the proposal of right-sizing. In our view, the resolution applicant seeks to be absolved from all the liabilities concerning the termination of contracts with employees/workmen/consultants without having to comply with various laws. The order sought from this Tribunal is to terminate the contracts of the existing employees/workmen/consultants without mentioning the number of employees/workm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assets, i.e. Cash and cash equivalent was valued at ₹ 114 crores by RBSA whereas the same was valued at only ₹ 46 crores by both D P and TRC. It is quite interesting to observe that TRC has not assigned even a single rupee for Security Against Borrowings and the book value of the same was ₹ 59.02 crores as on 31.03.2017. D P have also not assigned any value towards the same and noted that these deposits should be considered unrealizable, and their recoverable value has been considered as zero. 62. It may be noted that the Resolution Professional has issued advertisement inviting Expression of Interest in Economic Times, Delhi Mumbai editions, on 04.09.2017 and 11.01.2018. The corporate debtor is one of the largest shipbuilding companies in India which is primarily engaged in construction and repair of ships and rigs for Defence and commercial entities. It is one of the very few private sector shipyards in India to have a Defence Warship Building Licence. We think that prospective buyers of the company could be present across the world and the publication of advertisement calling for EOI should have been published internationally. On the contrary, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plan submitted by EARC, which is the major financial creditor having 82.5% of vote share in the CoC/total outstanding financial debt, therefore, the plan is hit by conflict of interest and should be rejected. The suspended directors also raised the issue of conflict of interest of the Resolution Professional with E Y, the resolution Professional being partner of E Y; the same E Y provided support services. Further, the other Resolution Applicants also argued that the liquidation value and the plan submitted by EARC is substantially lower when compared to the intrinsic/market value of the company considering the projects/orders on hand, the sector to which it caters as stated above. 67. The CoC approved the Resolution Plan of EARC who is the major financial creditor of the Corporate Debtor having approx. 82.5% in the vote share of the CoC. 68. Total admitted outstanding amount to financial creditors is ₹ 11,373crores, and workmen dues, employees claims, statutory claims, other claims are ₹ 1136 Crores. Thus, the total admitted claim is ₹ 12,509 Crores. If we look at the summary of proposed payment to financial creditors, as against such a huge admitted amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. RP admitted that E Y provided support services to him during the CIRP. Further RP has delegated his authority and duties to one Mr. Dinkar Venkatsubramaniam by a Power of Attorney. The said Mr. Dinkar Venkatsubramaniam was also a partner of E Y restructuring LLP. 74. Further E Y was given the mandate of investment banker for the Corporate Debtor to find investors. From the records submitted by the parties, it is noted that the disciplinary committee of IBBI after issuing Show Cause Notice and an opportunity of hearing, imposed a monetary penalty of ₹ 1lakh on Mr. Dinkar Venkatsubramaniam vide order dated 23.08.2018 in another Insolvency matter of JEKPL Pvt. Ltd. In spite of disciplinary proceedings initiated by IBBI, RP has delegated his power to the said Mr. Dinkar Venkatsubramaniam, and he has issued a letter to the erstwhile Managing Director on 08.09.2017. 75. As discussed in detail above, the Resolution Plan has not given due consideration to the interest of all the stakeholders. 76. It is noted that E Y/E Y LLP is providing entire service in the current CIRP like a single window system viz. the RP, Mr Dhinal Shah is partner of E Y, the Power of Attorney h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or at no cost, non repayment of advances received, continuation of existing Defence Warship Licence, no liability on the company or the Resolution Applicant for cancellation of contracts, corporate guarantee provided by the company on any pending and ongoing litigation/legal proceedings including winding-up petitions against or by the Company, all such dues have been reduced to Nil as per the plan. After approval of the resolution plan in case of any liability arising out of current pending disputes, consequent to any judicial pronouncement neither the company nor the RA shall be liable for such claim. Further, it is also proposed that any action against the company and the cases should not be allowed and earlier management should be held responsible for the same and proceed against but not against the current management and the company. It is also observed that the money lying with the corporate debtor are being used, assets of the corporate debtor will be sold to generate cash flow, sale of scrap, waiver of advances received from the customers especially from the Government Departments, no claim towards arbitration awards etc. which implies that the resolution applicant hardly br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to the other professionals/team of RP engaged works out to approximately ₹ 7.5 lakhs per month. We have also observed that the amount of ₹ 9,07,16,025 was paid towards other expenses from 06.07.2017 to 30.06.2018, details for the same are not provided. Fee payable to the RP was ₹ 37.48lakhs and cost of insurance for RP was ₹ 33.80lakhs, from the details submitted by the RP it is noticed that an amount of ₹ 5,58,48,283 was paid towards fee to legal professionals, fee payable to any other professionals, fee payable to other professionals, other expenses etc. and the same works out to ₹ 42,96,020 per month. This amount is exclusive of fee payable to RP of ₹ 40,78,320 and ₹ 57 lakhs fee payable to all three registered valuers. 84. Upon perusal, the resolution plan submitted by the successful resolution applicant, the debts of operational creditors, the amounts to be paid to the operational creditors are not in compliance with section 30(1)(b) of the I B Code 2016. The RA has proposed in the plan to allot 20% of shares to employees/trusts, 10% equity shares to the Government towards the Government dues which is not permissible unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or for the Corporate Debtor. This, in our view, was not what was intended by the legislature. Moreover, the resolution plan is not to buy and selling of the Corporate Debtor as has been held in Binani Industries Ltd. (supra) by the Hon'ble NCLAT. Considering all the aspects as mentioned above, the resolution plan deserves to be Rejected. It also appears that resolution plan envisages sale of the corporate debtor after value addition. Considering the nature of business, having Defence Warship Manufacturing License, and fact that the asset is of great national importance and the company provides employment to more than 800 people and has been building ships for the Indian Coast Guard Ministry of Defence, we also agree that scrap sale during liquidation will be loss to nation, the public and its creditors. If the ultimate object in the resolution plan is to sell the company, then it can be achieved by allowing the sale as a going concern during the liquidation process. 89. In addition to various waivers, relaxation sought, the resolution plan sought exemption from complying with SEBI-ICDR Regulations, especially relating to lock in period which was strongly opposed by other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 10 crores. ARCS Ship Build Services Pvt Ltd have not complied with the order dated 12.09.2018, and other unsuccessful bidders namely Ricky Nathaniel and Perfect Industries Group Holding Ltd have not appeared. Mr Joshi Ld. Senior Counsel informed the Tribunal that the RP received a letter dated September 27, 2018, from Perfect Industries claiming that it had deposited a bank draft of INR 10 crore as Earnest Money Deposit with the Tribunal. The Tribunal stated that it had not received the Earnest Money Deposit of INR 10 crore from Perfect Industries and as such questioned the authenticity of the letter dated September 27, 2018; 93. Subsequently, during the hearing held on 25.09.2018, another unsuccessful bidder, namely Geotech Investment and Holding LLC (Geotech) has come forward and submitted a letter expressing its interest to submit a revised Resolution Plan and proposed to pay an upfront amount of ₹ 3000 crores by way of cash within 90 days of approval of the resolution plan together with ₹ 130 crores towards operational creditors, including statutory dues and ₹ 37 crores towards workmen and employees dues. 94. Ld. Counsel Mr Kunal Dwarkadas appearing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the misconduct, non-compliance of the assurances/commitments given by the unsuccessful bidders, not genuine in their assurance, malafide intentions; we are forced to levy a cost. Accordingly, we impose a cost of ₹ 20 lakhs on each of the three un-successful bidders namely ARCS Ship Build Services Pvt Ltd., Mr Ricky Nathanial and Geotech Investment and Holding LLC as provided under Section 235A of the IBC, 2016 and the cost has to be paid within a period of two weeks from the date of receipt of copy of this order. We further direct that 50% of the cost to be paid into the account of the Corporate Debtor and the same shall be utilized towards payment to employees/workmen and the balance 50% is to be paid into the account of Prime Minister's National Relief Fund . 98. To develop a robust Insolvency Eco System wherein the role of Genuine Resolution Applicant is also very important and at the same time, not genuine/non-serious players to be discouraged. Only genuine/financially capable /serious players to participate in the resolution process and to prohibit such bidders, who dragged on the proceedings unnecessarily, causing loss to the valuation of assets, loss o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... key managerial persons and the partners of the Corporate Debtor shall cease to affect and at this moment vest in the Liquidator. The personnel of the Corporate Debtor are directed to extend all co-operation to the Liquidator as may be required by him in managing the affairs of the Corporate Debtor. The Insolvency Professional appointed as Liquidator will charge fees for conduct of the liquidation proceedings in proportion to the value of the liquidation estate assets as specified under Regulation 4 of Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016 and the same shall be paid to the Liquidator from the proceeds of the liquidation estate under Section 53 of the Code. 107. This liquidation order shall be deemed to be notice of discharge to the officers, employees and workmen of the Corporate Debtor, except to the extent of the business of the Corporate Debtor is continued during the liquidation process by the Liquidator. 108. We direct the CoC/Resolution Professional for initiation of the process of the sale of the corporate debtor unit as a whole, on a going concern basis, i.e. slump sale, to extract maximum value to the assets of the company which may be in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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