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TMI Blog2019 (4) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... as appointed as the Interim Resolution Professional (IRP). The CIRP period commenced thereafter. 2. The IRP, so appointed had informed the action taken towards commencement of CIRP as under: - (a) published the public announcement of CIRP in Form A dated 04.02.2018 in two newspapers and invited claims from the financial / operational creditors and workers / employees of the company in terms of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016; (b) Constituted the committee of creditors (CoC) on the basis of the claims received by him; (c) Appointed two valuers, namely, Mr Avinash Pendse and Delta Valuers & Appraisers LLP, to determine the liquidation value of the corporate debtor in accordance with Regulation 27 read with Regulation 35 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016; (d) Prepared and circulated the initial information memorandum containing matters referred to in Regulation 36(1)(a) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and circulated the same to the member(s) of CoC; (e) Prepared and circulated the further i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8; and (b) Rajdeep Plastics Containers (I) Pvt Ltd on 30.06.2018. The said resolution plans were discussed at the CoC meeting held on 10.07.2018 and advised to revise their respective resolution plans. In accordance with the said meeting, the RP received revised resolution plans from Mr. Jagmeet Singh Sabharwal; Ms. Sheetal Jagmeet Singh Sabharwal along with Max Spare Ltd on 17.07.2018. Rajdeep Plastics Containers (I) Pvt. Ltd did not give its resolution plan. On perusal of the said revised resolution plan it was suggested Mr. Jagmeet Singh Sabharwal; Ms. Sheetal Jagmeet Singh Sabharwal along with M/s Max Spare Ltd (hereinafter referred to as the "resolution applicant") to revise the said plan once again as certain provisions were not in accordance with the Code and related regulations. Accordingly, a final revised Resolution Plan was submitted on 14.08.2018, which was put up for due consideration by CoC at the meeting commenced on 01.09.2018. The said resolution plan was put to vote at the said meeting, which was approved by 100% of the voting share of CoC. The resolution plan preferred by Rajdeep Plastics Containers (I) Pvt Ltd was rejected by CoC at the said meeting. 7.2 A Misc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manufacturing company. (CIN: U32109MH1967PLC013711) Net Worth 197 Crores 15.64 Crores 49.6 Crores Name of the Company in which Applicant is a Director (a) Max Spare Ltd. (b) United Van Der Horst Ltd., (c) B.R. Steels Pvt. Ltd. (d) Inco Color Pvt. Ltd. (a) Max Spare Ltd. (b) United Van Der Horst Ltd., (c) B.R. Steels Pvt. Ltd. (d) Inco Color Pvt. Ltd. *Max Spare Limited shall act as a co-applicant to Mr. Jagmeet Singh Sabharwal and Mrs. Sheetal Jagmeet Singh Sabharwal. 9.1 The details of the company in which applicants are directors, informed as under: a. United Vn Der Horst Ltd. (UVDHL) UVDHL is an engineering company with turnover of Rs. 3.83 Cr in FY 18. It was earlier a loss-making Company which Mr Jagmeet Sabharwal turned into a profit-making unit. It was a listed company but trading was suspended due to penal reasons which were made good and trading was resumed on BSE w.e.f. 30th May, 2018. Its plant is located at Taloja with app market value of Rs. 56 Cr. It has a good business potential to grow. The company will touch turnover of Rs. 6 to 8 Cr in FY 2019 and Rs. 12 Cr in FY 2020. b. B. R. Steels Ltd. B.R.Steels Ltd has been into manufacturing of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Indian Economy, some of them. Max Spare Ltd has been aggressive in delivering stock items within 24 hours. Its current plant at Wagle Estate in Thane has reached its saturation point in terms of manufacturing capacity. The company's vision is to expand its products and business. For this, Company has been looking for new premises in its vicinity. 10. Balance sheet/Performance /Net worth of MSL are summarized hereunder:- (Rs in lakhs) FINANCIAL PERFORMANCE Particulars Financial Year 2014-15 2015-16 2016-17 2017-18 Sales 8,440 7,075 8,529 11,101 Profit after tax 469 278 342 576 Net-worth 4,516 4,508 4,786 4,960 (Amt in Rs ) FINANCIAL POSITION Sl. No Particulars FY 2014-15 FY 2015-16 FY 2016-17 A Shareholders Fund Share Capital 4,95,60,000 4,95,60,000 4,95,60,000 Reserve & Surplus 18,03,42,967 20,81,33,490 24,23,18,622 22,99,02,967 25,76,93,490 29,18,78,622 B Non-Current Liabilities Long Term Borrowings 11,64,37,955 8,49,14,853 6,16,24,800 Deferred Tax Liability - - - Other Long Term Liabilities 22, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ANCING RESOLUTION PLAN Amount(Rs) I. Unsecured loan by Resolution Applicant (a) For acquisition of Rubber Products Limited 21,25,00,000 (b) Margin money for revival/expansion 1,50,00,000 II. Bank loan for revival/expansion 3,50,00,000 TOTAL: 26,25,00,000 11.2 MEANS OF FINANCE (Rs. in Lakhs) Sl. No Nature 0-30 days 2-6 months 7-12 months 13-24 months 25-36 months 37 month Total 1. Existing Business of Resolution Applicant Unsecured Loans 1202.27 210.26 67.50 543.35 - 251.62 2275.00 Sub Total 1202.27 210.26 67.50 543.35 - 251.62 2275.00 2. Through Banks Term Loan 0.00 52.50 70.00 87.50 - - 210.00 Working Capital Loan 0.00 52.50 87.50 - 0.00 - 140.00 Sub total - 105.00 157.50 87.50 - - 350.00 Sl. No Nature 0-30 days 2-6 months 7-12 months 13-24 months 25-36 months 37 month Total Grand Total 1202.27 315.26 225.00 630.85 - 251.62 2625.00 11.3 FUNDS DISPENSATION PROPOSED UNDER RP (Rs. in Lakhs) Sl. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aashirvad Agro Industries 203,625 202,375 17. Amey Enterprises 229,126 229,126 18. Polmann India Ltd 246,122 245,377 19. Subhash V Satam 492,258 492,258 20. Sushila Catering Services 465,002 465,002 21. Deputy Comm. CGST Div.VI Thane (Note i) 35,339,529 7,875,409 22. A.B. Brothers 331,803 230,508 23. Nyne Organics Pvt Ltd ( Note ii) 10,732,874 - 24. Ambika Enterprises 121,325 121,325 25. Fouress Engineering (I) Pvt. Ltd. 364,653 364,653 26. Security Guard Board for Brihan Mumbai & Thane District 685,722 640,900 27. Tejak Chemicals 63,760 24,427 28. Ashwini Vaze& Associates 67,400 43,200 29. Jain Vinay& Associates 106,175 106,175 30. Advocate Shekhar M Shetty 715,168 715,168 31. Advocate Satish C Hegde 43,000 36,000 32. Sameer Apte & Co 50,000 45,000 33. Surendra Elastomers Private Ltd. 3,970,431 3,970,431 34. B. M. Labour Contractors 276,702 230,242 35. Functional Fabrics 805,131 595,814 36. Rushabh Corporation 408,727 204,248 37. Eternia Trading Pvt Ltd 2,107,457 2,103,341 38. Lakshmikumaran & Sridharan 1,15,000 1,15,000 39. Employee State Insurance Corporation 9,32,889 9,32,889 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H Equity Shareholders 2,92,50,363 Total 21,25,00,000 14. RP'S OBSERVATION ON COMPLIANCE WITH THE PROVISIONS OF SECTION 30(2) AND OTHER MANDATORY REQUREMENTS UNDER CIRP REGULATIONS 14.1 The following table displays the status of compliance of the provisions of section 30(2) of the IBC as also under mandatory regulations there under as reported by RP in Form H. Section of the Code /Regulation No. Requirement with respect to Resolution Plan Clause of Resolution Plan Compliance (Yes/No) 25(2)(h) Whether the Resolution Applicant meets the criteria approved by the CoC having regard to the complexity and scale of operations of business of the CD? Section 3 Yes Section of the Code/Regulation No. Requirement with respect to Resolution Plan Clause of Resolution Plan Compliance (Yes/No) Section 29A Whether the Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? Section 9 (Point 9.2 sub point I) NA (However the resolution applicant fulfils the conditions mentioned) Section 30(1) Whether the Resolution Applicant has submitted an affidavit stating that it is elig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UA EACH STAKEHOLDER (REGULATION 38(1A) 14.01 In terms of the Regulation 38(1A) introduced by the Second Amendment to CIRP regulations issued by IBBI on 5/10/2017, this paragraph tabulates below the mode in which this Resolution Plan has addressed the interests of various stakeholders: Sl. No. Stakeholder Interests as addressed in Resolution Plan 1 Workmen and Employees Admitted claim amount - Rs. 2,21,76,152/-As per section 53(1), it is proposed that liquidation value due to workmen dues for last 24 months shall be paid within 30 days of approval of Resolution Plan by Adjudicating Authority subject to settlement of workmen dues. The same will be paid pari-passu to claim of Secured Financial creditors. Out of upfront payment of Rs. 12,02,26,769/-, it is proposed to pay workmen dues as follows: * Admitted Claim Amount: Rs. 2,21,76,152/- * Unclaimed amount: Rs. 12,43,647/- Total amount: Rs. 2,34,19,799/- Employee dues admitted claim amount - Rs. 56,41,775/- Out of upfront payment of Rs. 12,02,26,769/-, it is proposed to pay Employee dues as follows: * Admitted Claim Amount: Rs. 56,41,775/- * Unclaimed amount: Rs. 9,25,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional creditor in incorrect format shall be waived off and the company or the Resolution Applicant shall not be liable for payment of the same. 4 Tax/Statutory Dues/penalties/interest/Fines (Including TDS, EPF, VAT, Excise, ESIC/ FEMA/Companies Law, etc.) As per Regulation 38 of CIRP Regulations, liquidation value due to operational creditor shall be paid in priority to Financial Creditor within 30 days of approval of Resolution Plan by Adjudicating Authority. As per section 5(21) Statutory liabilities shall form part of Operational Debt. Out of upfront payment of Rs. 12,02,26,769/- statutory dues shall be discharged as follows: * Amount claimed and admitted Rs. 88,08,298; * Unclaimed amount Rs. 99,42,982/-. Shall be paid within 30 days of approval of Resolution Plan by Adjudicating Authority. 5 Unsecured loan Payable to Related Party Amount claimed by unsecured financial creditors being related party is Rs. 5,05,85,097* As per section 53 of IBC, 2016 unsecured financial creditors shall be paid after the dues of secured financial creditors, workmen dues for 24 months prior to liquidation and employee dues of 12 months prior to liquidation are discharged. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o that extent. 15.0 SHARE CAPITAL STRUCTURE 15.01 The comparative chart of existing and proposed share capital structure is shown below:- SHARE CAPITAL AS ON 2nd JAN, 2018 Particulars Units Amount/Number Amount/Number Authorized Share Capital (1,00,00,000 Equity Shares of Rs. 10 each) Rs. Crores 10.00 Issued, Subscribed & fully paid up Capital Rs. Crores 4.09 (Out of above 15,10,020 shares of Rs. 10 each were alloted as fully paid up Bonus shares by Capitalization of General Reserves) Add: Shares forfeited Rs. Crores 0.01 4.10 No. of Shares Numbers 40,88,400 Add: Shares forfeited Numbers 15,300 41,03,700 Face Value per Share Rs. 10/- per share THE CAPITAL STRUCTURE OF EXISTING SHAREHOLDERS OF RUBBER PRODUCTS LTD AFTER THE PROPOSED SHARE TRANSFER ON APPROVAL OF RESOLUTION PLAN: Sl. No. Particulars No. of Shares Originally Held Revised No. of Shares after approval of RP by NCLT Share Capital after Reduction (Rs.) % holding 1 Soumyalatha Sadanand Shetty 12,42,170 0 0 0 2 IDBI Trusteeship Services Ltd. 5,89,191 0 0 0 3 Raju Bhandari 3,60,982 0 0 0 4 Sucharita Ramcrishna Hegde 1,43, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial year, if not filed as on date, then Adjudicating Authority is expected to permit the Resolution Applicant to file the returns on approval of Resolution Plan and income tax department to waive the penalty and interest for late filing of the said returns/ unpaid tax liability/demand to be totally waived off. * The 'Resolution Applicant' propose to make payment for the claims received by the Operational Creditors to the extent admitted as per the list mentioned in the Information Memorandum in the manner as full and final settlement of Operational creditors liabilities. * In respect of claim of wages for the period of strike as well as lockout, since these disputes are pending before Industrial Court as well as Labour court the same are to be paid as per the provisions of Law. * Any pending filing fees of the financials and other documents, if any as per The Companies Act 1956and The Companies Act 2013 with Registrar of Companies for the period till the commencement of CIRP date shall be treated as per applicable law. * Relevant authorities to either continue or issue new existing Manufacturing License/ Factory License given in name of Corporate Debtor without demanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IRP due to pronouncement of moratorium if any tax is levied, the same requires waiver. For rest of the tax demand a reliance is placed on a decision of NCLT, Chandigarh Bench in the case of "State Bank of India vs. MOR Farms Pvt. Ltd." dated 15.06.2018 in CA Nos. 71/2018 & 171/2018 in CP(IB)- 51/Chd/Hry/2017 wherein waiver is granted in respect of tax dues. Although the question of waiver has been dealt with in this order by the respected Coordinate Bench, NCLT, Chandigarh. However, an important aspect is to be kept in mind that the petition in this case has moved u/s 10 of the Insolvency Code to declare itself insolvent. In other words, the Petitioner is seeking waiver in respect of all the statutory taxes & liabilities for the period during which the same management was at the helm of the affairs and liable for statutory compliances. The important point which requires due consideration is that the Resolution Plan is also now submitted by the entity/resolution applicant who has nexus with the Corporate Debtor. Therefore, while placing reliance on the decision of respected Coordinate Bench, this aspect requires due consideration. 18.0 The latest position is that in the case of K. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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