TMI Blog2019 (5) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the I B Code, 2016, obtain all the necessary approval as maybe required under any law for the time being in force within a period of one year from the date of approval of the Resolution Plan by this authority or within such period as provided for in such law - the order of moratorium dated 03.04.2018 passed by this Adjudicating Authority under Section 14 of I B Code, 2016 shall cease to have effect from the date of passing of this Order. - MA/31/IB/2019 In CP/655/IB/2017 - - - Dated:- 12-3-2019 - CH MOHD SHARIEF TARIQ, MEMBER (JUDICIAL) For The ICICI Bank : E. Omprakash, Sr. Counsel, P. Elayarajkumar, V.M. Karthik For The Tirunevlveli Muunicipal Corporation : V. Thangapandian For The Tangedco/TNEB : P. Madasamy For SKR Wind Energy, LLP : Aashish D. For The Resolutkion Applicant : P. Raj Kumar Jhabakh, T. Moorthy, Rohan Rajasekaran, B. Akilan, Counsels and R. Vidayashankar, Counsel ORDER Per : CH MOHD SHARIEF TARIQ, MEMBER (JUDICIAL) 1. MA/31/IB/2019 has been filed under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. (ii) The objection raised by the Chief Manager of ICICI Bank Ltd.: The Chief Manager of ICICI Bank Ltd., has filed its objection through Counsel stating therein that as per the Information Memorandum (IM), the Resolution Professional has recognised the claim of ICICI Bank Ltd., so a provision should have been made in the Resolution Plan by the Resolution Applicant. Besides this, there are other objections raised by the ICICI Bank Ltd. It is an admitted fact that the Resolution Plan was approved by the CoC on 17.12 2018. The ICICI Bank Ltd., has filed its claim before the Resolution Professional, on 21.12.201, i.e., after the approval of the Resolution Plan. Therefore, no claim can be entertained after the approval of the Resolution Plan. It is on record that prior to the approval of the Resolution Plan, the ICICI Bank Ltd., was well aware about the CIR Process initiated against the Corporate Debtor as reflects from MA/3/2019 filed by the ICICI Bank Ltd., against the Resolution Professional under Sections 60 (5) and 21 of the I B Code, 2016. Therefore, the objections filed by the ICICI Bank Ltd., are devoid of merits and stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Resolution Applicant has referred to the recent ruling of Hon'ble Apex Court given in K. Sashidhar v. Indian Overseas Bank [2019] 213 CompCas 356 (SC), wherein under Para 33, the Hon'ble Apex Court has observed as follows;- ...the commercial wisdom of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by I B Code. There is an intrinsic assumption that the Financial Creditors are fully informed about the viability of the Corporate Debtor and feasibility of the proposed Resolution Plan. The act on the basis of their examination of the proposed Resolution Plan and assessment made by their team of experts. The opinion on the subject matter expressed by them after deliberations in the CoC meetings through voting, as per the voting shares, is a collective business decision. The legislature, consciously, has not provided ground to challenge the commercial wisdom of the individual financial creditors or their collective decisions before the Adjudicating Authority. That is nonjusticiable. Based on the above observation of Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds to examine the Resolution Plan submitted by the Resolution Professional under Section 30(6) of the I B Code, 2016. Initially, CP/655/(IB)/CB/2017 filed under Section 9 of I B Code, 2016 read with Rule 6 of the Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by M/s. SKR Wind Energy LLP (in short, 'Operational Creditor') against Corporate Debtor viz., M/s. Subburaj Spinning Mills Private Limited which was admitted by this Authority vide Order dated 03.04.2018, CIR Process was initiated against the Corporate Debtor, moratorium was declared and Mr. Gopal Swamy Ganesh Babu was appointed as IRP. 8. The IRP took over the management and affairs of the Corporate Debtor and caused public announcement on 10.04.2018 under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons), Regulations, 2016, for filing the claims by the creditors. After verification of the claims received, the IRP constituted Committee of Creditors (CoCs). 9. In the 1st Meeting of the CoC held on 08.05.2018, the Applicant viz., Mr. Gopalsamy Ganesh Babu was appointed as Resolution Professional. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had again made newspaper publication inviting 'EoI' on 14.11.2018 for submitting the Resolution Plan in respect of Corporate Debtor. In response to the 2nd 'EoI', the same Resolution Applicant viz., M/s. H. M. Textiles Pvt. Ltd., Coimbatore has submitted a Resolution Plan in respect of the Corporate Debtor and no other Resolution Plan was received within the time limit fixed by the Resolution Professional. 14. In the 6th Meeting of CoC held on 04.12.2018, the Resolution Plan submitted by the sole Resolution Applicant along with the Valuation Reports and Evaluation Matrix was placed before the CoC for discussions. After the deliberations, the Resolution Applicant was granted time to increase its offer in the Resolution Plan. In the adjourned 6th Meeting of CoC held on 14.12.2018, the CoC discussed the restructured Resolution Plan with Resolution Applicant and the Resolution Applicant was granted time to consult with his Advocate about the priority of payment of the expenses incurred. 15. In the second adjourned meeting i.e., 6th Meeting of the CoC held on 17.12.2018, the Resolution Applicant was also called to attend the meeting, and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the workmen of the Corporate Debtor in the normal course of business. 17. The 'Resolution Plan' further provides for payment plan and manner of utilization and waterfall as follows:- Allocation of total cost to Resolution Applicant Sl. No. Category of claims Amount due as per IM (Rs.) Proposed Payment (Rs.) A Insolvency Resolution Process cost 15,00,000 1,71,00,805 including CD running expenses B Payments towards claims 1 Secured Financial Creditors City Union Bank Ltd 54,55,89,838 19.40,00,000 2 Workmen and employee dues Gratuity 1,00,25,376 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Operational Creditors SKR Wind Energy LLP 85,43,494 5,00,000 (This will be paid in proportion to the claims of Operational Creditors without any preference or priority to any Operational Creditor on any basis) Other Operational Creditor . 6 Total 96,30,05,738 22,76,94,583 The liquidation value of the Corporate Debtor is ₹ 25,07,09,500/-. The total debt due to Secured Creditor and the workmen is ₹ 55,61,83,618/- and the Resolution Process Costs is ₹ 1,71,00,805/-. Therefore, as per the liquidation value of the Corporate Debtor and the waterfall mechanism provided under Section 53 of I B Code, no amount will be liable to be paid to persons other than resolution process cost, secured creditors and wages to workmen. 18. The 'Resolution Plan' provides for payments to the creditors within the stipulated time as follows:- (a) Resolution Process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital of the corporate debtor shall stand completely reduced to zero and simultaneously and immediately a sum of ₹ 2 crores out of the funds brought in by Resolution Applicant shall stand credited by way of initial issued, subscribed and paid-up capital of the company subscribed by and issued to the Resolution Applicant and the rest of the amount brought in by the Resolution Applicant shall be credited in the books of the Corporate Debtor as loans from the Resolution Applicant as stated elsewhere in this Resolution Plan. The corresponding effect of reduction of capital as aforesaid shall be given to General Reserves of the corporate debtor. (iv) Infusion of fresh funds by the promoters:- Of the amount specified as above, the Resolution Applicant will borrow from scheduled commercial Banks or Financial Institutions a sum of ₹ 10,00,00,000/- and bring the balance out of funds available with them / raised by them through their internal sources. The amount to be brought in by the Resolution Applicant from their own sources will be brought in three equal monthly parts from and request will be made to lending Bank or Financial Institution to disburse the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor, as per the waterfall mechanism provided under Section 53 of the I B Code, 2016. Moreover, this is with a view to implement the Resolution Plan successfully as approved by the CoC. 23. Besides the above, the existing Directors of the Corporate Debtor shall be deemed to have resigned from the directorship of the corporate debtor from the date the Resolution Plan is approved, so that the Resolution Applicant may induct new Directors to gain control over the management of the affairs of the Corporate Debtor in order to enforce the capital restructuring after getting voting rights in any general meeting of the Corporate Debtor. 24. Thus, the 'Resolution Plan' filed with the Application meets the requirements of Section 30(2) of I B Code, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. The 'Resolution Plan' is also not in contravention of any of the provisions of Section 29A. The Resolution Professional has also certified that the Resolution Plan approved by the CoCs does not contravene any of the provisions of the law for the time being in force. The Compliance Certificate is placed at ..... 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