9911796707
TMI Blog2019 (7) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... Priya Agarwal, Ms. Aditi Mohapatra, Angad Baxi, Biswajit Dubey, Ms. Surbhi Khattar, Ms. Ruchi Chaudhary, Vaibhav Mishra, Manu Mridul, Sumit Mamgain, Shalaj Mridul, CA-938 (PB)/2018 : Ms. Sonal Gupta and Ms. Malvika Bhanot, Advs. ORDER S.K. Mohapatra, Member. 1. This is an application filed by the Resolution Professional under Section 30(6) of Insolvency and Bankruptcy Code, 2016 (hereinafter referred as the "Code") read with Regulation 39(4) of The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process of Corporate Persons) Regulations, 2016 seeking approval of the Resolution Plan. The Resolution Plan duly approved by the Committee of Creditors (CoC) with the requisite majority has been placed on record. 2. The facts in brief necessary for disposal of the present application are as follows: - 3. One of the Financial Creditor, namely, Edelweiss Asset Reconstruction Company Limited had preferred an application under Section 7 of the Code for initiation of corporate resolution process against M/s. Tecpro Systems Limited ("Corporate Debtor"). The application was admitted on 7th August, 2017 imposing moratorium under Section 14 of the Code and the applicant, Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted to EFPL and KIPL to incorporate the suggestions communicated by the Committee of creditors and accordingly to submit the revised resolution plans. The resolution plan submitted by the Employees of the Corporate Debtor was not considered by the Committee of Creditors as it lacked financial standing. 10. Ernst and Young LLP India was appointed to carry out a compliance check on EFPL and KIPL under Section 29A of the Code and a report was submitted to the members of the Committee of Creditors. On the basis of the said report and documents furnished by EFPL and KIPL, the CoC members concluded that both EFPL and KIPL were not disqualified under Section 29A of the Code and decided to put the resolution plans to vote for approval. 11. Subsequently, the Committee of creditors in its 8th (eighth) meeting dated April 30, 2018 approved the resolution plan submitted by KIPL by a majority vote of 88.39%. The Committee of creditors concluded that the resolution plan submitted by KIPL was commercially superior than the resolution plan submitted by EFPL. 12. Post approval of the KIPL's resolution plan by the Committee of Creditors, an application being CA-368(PB)/2018 was filed on 3rd May, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution plan was revised by KIPL pursuant to the changes suggested during the 14th CoC meeting and was submitted to the Resolution Professional on March 1, 2019 ("Modified Plan") along with an affidavit stating eligibility under Section 29A of the Code and an undertaking under Regulation 39(1)(c) of the CIRP Regulations. The Applicant circulated the Modified Plan received on March 1, 2019 to the members of the Committee of Creditors and erstwhile promoters of the Corporate Debtor. The members of the Committee of creditors were of the opinion that the Modified Plan submitted by KIPL did not capture the comments/objections raised during the 14th CoC meeting and asked KIPL to further revise the Modified Plan. The Modified Plan was further revised by KIPL and the Final Resolution Plan was submitted by KIPL on 7th March, 2019. 19. Applicant Resolution Professional verified the Final Resolution Plan submitted by KIPL under Section 30(2) of the Code and presented the same before the Committee of creditors for their consideration. The Committee of Creditors in its 15th meeting dated 8th March, 2019 discussed and deliberated upon the Final Resolution Plan. After discussions and deliberation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments as referred to in sub-section (2) of Section 30 of the Code. 24. Hon'ble NCLAT in the case of Darshak Enterprise (P.) Ltd. v. Chhaparia Industries (P.) Ltd& Ors. passed in Civil Appeal (AT) (Ins) No. 327 of 2017 has held that: "In absence of any discrimination or perverse decision, it is not open to the Adjudicating Authority or the Appellate Tribunal to modify the plan." 25. It is also pertinent to note that a Resolution Plan cannot take care of total outstanding dues of all the creditors. Be that as it may the objections raised during the course of hearing in the following Company Applications filed by different stakeholders are duly considered and are taken up case wise separately. i. CA No. 38 (PB)/2019 ii. CA No. 1219 (PB)/2018 iii. CA No. 557 (PB)/2018 iv. CA No. 828 (PB)/2018 v. CA No. 938 (PB)/2018 vi. CA No. 939 (PB)/2018 vii. CA No. 556 (PB)/2018 viii. CA No. 824 (PB)/2018 ix. CA No. 357 (PB)/2018 x. CA No. 940 (PB)/2018 xi. Dy. No. 7675 (PB)/2018 xii. CA No. 603 (PB)/2018 26. CA 38 (PB)/2019 has been filed by Bagai Steel Syndicate, a partnership concern registered under the Partnership Act, 1932 with a prayer to allow claim amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was constituted on the basis of original claim. Thereafter, the Appellant being member of the 'Committee of Creditors' not raised the issue immediately but after about 250 days. In the circumstances, no relief can be granted. However, we make it clear that the order passed by the Adjudicating Authority or this Appellate Tribunal will not come in the way of the Appellant to move before appropriate forum for appropriate relief." (emphasis given) 32. Similarly, Hon'ble NCLAT in the case of, Prasad Gempex v. Star Agro Marine Exports (P.) Ltd. [CA (AT) (Ins.) No. 291 of 2018, dated on 1-2-2019], has held that; "RP has no jurisdiction to decide the claim of one or other creditor, including Financial creditor, operational creditor, secured creditor, or unsecured creditor. RP only collates the claims and accept them to the extent verification made from the record....... .......Notwithstanding the order passed under section 31 of the Code, it is open to a person to file suit or an application against the 'CD' after completion of the period of moratorium, with regard to the disputed amount." 33. Admittedly the present claims have not been adjudicated upon by any legal Forum and have n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RE South Asia Private Limited for Rs. 41.57 Lakhs have already been accepted as the same were reflected in the ledger/books of the Corporate Debtor. Resolution Professional has denied that no other pending amounts stands reflected against CBRE in the books of the Corporate Debtor. In that view of the matter it is open to the applicant to move appropriate Forum for adjudication of the disputed left out claim. CA No. 939 (PB)/2018 is disposed of accordingly. 39. CA No. 556 (PB)/2018 has been filed by SAIL with three separate claims in respect of non-performance of work awarded to the Corporate Debtor under the Chanarpur, Meghahatuburu and Bolani contracts respectively. In all these claims there are pendency of disputes and the matters are stated to be subject to adjudication. CA No. 556 (PB)/2018 is disposed of accordingly with the observation that after the final adjudication by competent Forum, the respective claims shall be dealt with in accordance with law. 40. It is contended that the claim of the public undertaking (SAIL) is in the nature of public money and therefore public interest should be protected. Admittedly the Resolution Plan has provisions with regard to all credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tstanding amount for delivery of goods. It is stated in the affidavit dated 21.01.2019 that a Civil Suit in this regard has been filed in Kolkata which is pending adjudication. It is accordingly contended that the claim is yet to be adjudicated upon. CA No. 603 (PB)/2018 is disposed of accordingly, with the observation that after the final adjudication by competent Forum, the present claim shall be dealt with in accordance with law. 45. It is stated in the affidavit dated 21.01.2019 that the claims in Diary No. 7675 filed by M/s. Silver Oaks is pending adjudication before Hon'ble High Court of Delhi. It is contended that such sub-judice claims cannot be over-ridden by Resolution Professional. The consequences of such liabilities are subject matter of the jurisdiction of the Court, where the claims are pending adjudication. It is made clear that after the final adjudication order, the claims shall be dealt with in accordance with law. 46. Before parting with the objections raised in various company applications moved in the present matter by different Operational Creditors, it is relevant to refer to the case of Swiss Ribbons (P.) Ltd. v. Union of India [2019] 152 SCL 365 where Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ages to workmen. However as per compliance certificate of Resolution Professional, Rs. 8 Crore (0.22%) has been kept for operational creditors and 46,500 (5.79%) has been provided for financial creditors. It is no longer res integra that there is an intelligible differentia between the FCs and OCs and such classification between FCs and OCs is neither discriminatory nor arbitrary nor violative of Article 14. The provisions made in the Resolution Plan in favour of the operational creditors is more than the amount which the operational creditors could have received in the event of liquidation of the corporate debtor. 52. Spirit of the Code encourages resolution as against liquidation. Resolution is the rule; whereas liquidation is to be an exception. The object of the Code is to promote resolution and every effort must be made to try and see that resolution is made possible more so when CoC has passed the resolution Plan with 89.92% voting share and has placed it before us for approval. 53. Hon'ble Supreme Court of India in the matter of K. Sashidhar v. Indian Overseas Bank [2019] 152 SCL 312, has held that: "The scope of enquiry and the grounds on which the decision of "approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process and the resolution plan to the Board to be recorded on its database. (4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval 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 the Adjudicating Authority under sub- section (l) or within such period as provided for in such law, whichever is later." (Emphasis given) 56. Therefore, before approving the Resolution Plan, the Code mandates the Adjudicating Authority to ensure that,- (1) the Resolution Plan meets the requirements of Section 30(2) of the Code and (2) the resolution plan has provisions for its effective implementation. 57. In respect of compliance of point (1) above, it is necessary to refer to sub-section (2) of Section 30 of the Code which reads as follows: "30. Submission of resolution plan. -(1)......... (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code. 61. In respect of compliance of Section 30(2)(a) there is provision in the resolution plan as at Clause 5.4 (a), which provides for payment of CIRP costs in priority over payments to any other creditors. The clause inter alia provides that each holder of such priority claim shall be unimpaired under the Resolution Plan and would be paid CIRP Costs (estimated at INR 2.0 Crores) in full as per the prevailing Code and CIRP Regulations from the Effective Date prior to payments to all other Creditors. The Resolution Professional has confirmed in the compliance certificate given in Form H that the Resolution Plan provides for the payment of Insolvency Resolution Process costs. 62. Therefore clause (a) of sub-section (2) of Section 30 stands satisfied and it is made clear that Insolvency Resolution Process cost shall be paid in its entirety by the resolution applicant in priority to other debts of the corporate debtor. 63. As per clause (b) of Section 30 (2) of the Code, the Resolution Plan must provide for the payment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties shall seek all requisite approvals, clarifications and regulatory guidance, if required, including but not limited to from Reserve Bank of India for restructuring terms of the debt, competition Commission of India to the extent applicable, securities and Exchange Board of India, Ministry of Corporate Affairs and all other regulatory and judicial authorities for the reduction of capital and all other approvals required from other regulators having jurisdiction over the Company and/or to give effect to this Resolution Plan. The SPV (i.e. Kridhan Projects Private Limited) shall make the equity infusion into the Company in accordance with this Resolution Plan, within 30 days of (i) finalization and execution of all definitive documents required to give effect to the terms of this Resolution Plan; (ii) receipt of all Regulatory Approvals required to give effect to the terms of this Resolution Plan and the definitive documents executed pursuant hereto; and (iii)) reduction of capital as contemplated in this Resolution Plan. The Resolution Professional has confirmed in the compliance certificate given in Form H that sections 5 and 6 of the Resolution Plan provides for adequate me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecurity to be deposited by KIPL. Moreover, the minutes of the meeting of Committee of creditors shows that KIPL verbally expressed its willingness to furnish performance security in case it received such directions from the Tribunal. 72. Accordingly, in compliance of Regulation 36B(4A) of the CIRP Regulations, the successful Resolution applicant is directed to provide performance security for an amount of Rs. 5,00,00,000 (Rupees Five crores) as stipulated by the CoC within 30 days from the receipt of this order. 73. As a sequel to aforesaid discussions we are satisfied that all the requirements of Section 30 (2) are fulfilled and no provision of the law for the time being in force has been contravened. 74. It is relevant to note here that 'Explanation' in sub_section (2) of Section 30 provides deemed approval of shareholders for implementations of actions under the Resolution Plan, making it clear that it shall not be a contravention of law. 75. In respect of reliefs and concession sought for in the Plan which are beyond the jurisdiction of this Tribunal, Monitoring agency along with the Resolution Applicant can make such claim before the authorities which shall be considered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Plan; we hereby approve the Resolution Plan under sub-section (1) of Section 31 of the Code. 80. In compliance of Regulation 36B(4A) of the CIRP Regulations, the successful Resolution applicant is directed to provide performance security for an amount of Rs. 5,00,00,000 (Rupees Five crores) as stipulated by the CoC within 30 days from the receipt of this order. 81. As per Section 6.7 of the resolution plan the resolution applicant shall appoint a 'Monitoring Agency' with modification that Resolution Professional shall be a member thereof at least for three months to monitor and supervise the implementation of the Resolution Plan. We also grant Liberty to the monitoring Agency to apply to the Tribunal for any further direction in order to ensure effective implementation of the plan, if such a necessity arises. 82. It is hereby declared that the Resolution Plan is binding on the corporate debtor, members, employees of the corporate debtor, creditors of the corporate debtor and other stakeholders involved in the Resolution Plan. 83. The resolution applicant shall obtain the necessary approval required under any law for the time being in force within a period of one year from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
