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2019 (6) TMI 639

..... taken into consideration by the ‘Resolution Professional’ because of non-invocation of the Corporate Guarantee, and was neither invited or made a member of the ‘Committee of Creditors’ despite it being a ‘Financial Creditor’ of the ‘Corporate Debtor’ on the basis of its claim against the Corporate Guarantee given by the ‘Corporate Debtor’. HELD THAT:- It is true that the ‘Corporate Debtor’ had taken guarantee but the said guarantee was not invoked in favour of the Appellant- ‘Edelweiss Asset Reconstruction Limited’. However, the said guarantee was not invoked by the Appellant- ‘Edelweiss Asset Reconstruction Limited’ as on the date of admission or filing of the claim - On declaration of ‘Moratorium’, it was not open to the Appellant- ‘Edelweiss Asset Reconstruction Limited’ to invoke the guarantee (Corporate Guarantee). The ‘Resolution Professional’ has rightly not accepted the claim of the Appellant- ‘Edelweiss Asset Reconstruction Limited’ and the Adjudicating Authority has rightly rejected the application filed by the Appellant- ‘E .....

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..... egotiation. 3. Thereafter, the Resolution Professional filed an application under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 ( I&B Code for short) for approval of the Resolution Plan of Ghanashyam Mishra & Sons Private Limited . 4. An application under Section 30(5) of the I&B Code was filed by Edelweiss Asset Reconstruction Company Limited (Appellants in two of the appeals) alleging that the ranking of the bidders is not legal or proper and the selection and approval of the selected Resolution Plan by the Committee of Creditors does not meet the requirement to be meted out under the provisions of the I&B Code and Regulations framed thereunder. 5. The plea was taken that the Resolution Professional has failed in its duty of disclosing of required information in the Information Memorandum. The last date of the submission of the Resolution Plan was 10th April, 2018, and the Appellant- Edelweiss Asset Reconstruction Company Limited submitted its Resolution Plan which was not considered properly. 6. The stand of the Resolution Professional was that in the second round of bidding, on 13th April, 2018, Edelweiss Asset Reconstruction Company Limited was scor .....

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..... - ( IIFCL for short), was approached for providing a take-out financial assistance under its Take-out Finance Scheme. As part of the security, amongst others, for the said Take-out Finance Facility, APNRL procured Corporate Guarantee dated 5th December, 2014 of Orissa Manganese Minerals Limited - ( Corporate Debtor ) in favour of IIFCL . 13. IIFCL assigned debt of APRNL together with underlying securities to the Appellant- Edelweiss Asset Reconstruction Limited and thus, by virtue of the assignment of debt, it has stepped into the shoes of IIFCL and is thus, entitled to exercise its rights in respect of the said debt and the securities created therefor. 14. During the Resolution Process , the Appellant- Edelweiss Asset Reconstruction Limited informed the Resolution Professional through various emails and letters about the loan, more particularly dated 3rd January, 2018 and 4th January, 2018, the assignment of debt along with its underlying securities, including the Corporate Guarantee dated 5th December, 2014 by Orissa Manganese Minerals Limited - ( Corporate Debtor ) and requested him to bring the aforesaid fact to the knowledge of Resolution Applicants / bidders in Orissa Mangane .....

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..... basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; [Explanation.- For the purposes of this subclause,- (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expression, allottee and real estate project shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development Act, 2016 (16 of 2016);] (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause; 19. In terms of Section 5(8)(h), a .....

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..... of the Principal Borrower and for non-invocation of the Bank Guarantee, the Appellant- Edelweiss Asset Reconstruction Limited claim cannot be accepted the debt payable by the Corporate Debtor as on the date of the admission (initiation of Corporate Insolvency Resolution Process ). 27. For the said reasons, we hold that the Resolution Professional has rightly not accepted the claim of the Appellant- Edelweiss Asset Reconstruction Limited and the Adjudicating Authority has rightly rejected the application filed by the Appellant- Edelweiss Asset Reconstruction Limited for accepting its claim. 28. However, we make it clear that the rejection of the claim for the purpose of collating the claim and making it part of the Resolution Plan will not affect the right of the Appellant- Edelweiss Asset Reconstruction Limited to invoke the Bank Guarantee against the Corporate Debtor in case the Principal Borrower failed to pay the debt amount, the Moratorium period having come to an end. Company Appeal (AT) (Insol.) No. 444 of 2018 29. In this case, the grievance of the Appellant- Edelweiss Asset Reconstruction Limited is that the Resolution Plan submitted by it has been wrongly held to be lower .....

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..... 62.87% 34.83% NPV of Offer amount/Liquidation Value 105.99% 109.34% 60.58% 32. Looking at the above comparative chart and scoring summary, it having revealed that the offer of Ghanashyam Mishra & Sons Private Limited is better than the offer of other two Resolution Applicants , the Adjudicating Authority rightly approved the Resolution Plan and we find no illegality in the same. Company Appeal (AT) (Insol.) No. 500 of 2018 33. This appeal has been preferred by the Appellant- Sundargarh Mines & Transport Workers Union on behalf of the workmen of the Corporate Debtor . According to the Appellant, which represent the Workmen who are poor, illiterate mines workers (1476 workers) mostly belonging to tribal community in interior parts of Odisha, who have been made to run from pillar to post for getting their hard earned wages and statutory dues as per the Constitution of India, Labour Laws and I&B Code . 34. Their grievance is that the Resolution Professional vide order dated 8th March, 2018, stated before the Adjudicating Authority that they have engaged around 1000 workers for its mining operations and still after admitting the above fact and knowing about existence and ha .....

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..... ne in Orissa Post in English and another in Prameya in English and Odiya. 40. In the present case, as we find that the Appellant- workmen filed claim on behalf of 1476 workmen. Apart from those, who are already working and for whom the Resolution Professional intimated and the Successful Resolution Applicant has allocated funds, no specific finding can be given on the question of fact. As it is not possible for this Appellate Tribunal to decide who are 1476 workmen in addition to those who have been accepted to work by the Resolution Professional during the Resolution Process and those workmen who have filed claim within the time. It is not desirable for us to give finding one or other way. 41. Sub-Section (6) of Section 60 reads as follows: 60. Adjudicating Authority for corporate persons.─ (6) Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963) or in any other law for the time being in force, in computing the period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded. 42. From the afore .....

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..... essful Resolution Applicant , the plan having approved, the said plan can be challenged only on the ground as enumerated under Section 61(3) of the I&B Code . 49. Having heard learned counsel for the parties, we are of the view that the Appellant cannot be granted any relief at this belated stage, having not challenged the decision of the Resolution Professional under sub-Section (5) of Section 30 of the I&B Code at appropriate stage. 50. Section 32 of the I&B Code deals with Appeal wherein any appeal from an order approving the Resolution Plan shall be in the manner and on the grounds laid down in sub-section (3) of Section 61, which reads as follows: 32. Appeal.-Any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in sub-section (3) of section 61. 61. Appeals and Appellate Authority ─ ……..(3) An appeal against an order approving a resolution plan under section 31 may be filed on the following grounds, namely:- (i) the approved resolution plan is in contravention of the provisions of any law for the time being in force; (ii) there has been material irregularity in exercise of the powers by the re .....

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