TMI Blog2019 (8) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mukhopadhaya, Chairperson and Mr. Bansi Lal Bhat, Member (Judicial) For Appellant : Mr. Alok Dhir, Ms. Varsha Banerjee, Mr. Milan Singh Negi, Mr. Kunal Godhwani and Ms. Juhi Bhambhani, Advocates For Respondents: Mr. Amit Sibal, Mr. Arun Kathpalia and Mr. Ratnako Banerjee, Senior Advocate assisted by Mr. Sameer Rohatgi and Mr. Akshit Pradah, Advocartes for Respondent No. 1 Mr. Saraswate Mohapatra, Advocate for Employees Ms. Anusuya Salwan, Ms. Nikita Salwan and Mr. Kunal Kohli, Advocates Mr. Mukesh and Mr. Debal Banerjee, Senior Advocates with Ms. Reema Khurana, Mr. Kartik Rathi, Advocates for Allahabad Bank Mr. Harin Rawal, Senior Advocate with Mr. Sanjay Kapur and Ms. Megha Karnwal, Advocates for SBI JUDGMENT On an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, the I B Code ) filed by the RBL Bank Limited (Financial Creditor) Corporate Insolvency Resolution Process was initiated against MBL Infrastructures Limited (Corporate Debtor). By impugned order dated 18th April, 2018, the Adjudicating Authority (National Company Law Tribunal), Kolkata Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n shown. It was submitted that the total debt of Operational Creditors is ₹ 157.91 Crores; for workmen/employees : ₹ 14.55 Crores and statutory dues : ₹ 47.97 Crores but the period of implementation of resolution plan proposed is 8.5 years. Therefore, according to the Appellants the resolution plan is not viable and feasible in the eye of law nor meets the commercial aspect. 8. It was also submitted that the Resolution Applicant - Mr. Anjanee Kumar Lakhotia is ineligible in terms of Section 29A(h) of the I B Code being a personal guarantor to RBL Bank Limited on whose application Corporate Insolvency Resolution Process was initiated and personal guarantee has been invoked by the RBL Bank Limited on 23rd January, 2017 due to defaulted amount of ₹ 7,16,46,626/-. 9. Insofar as State Bank of India is concerned, it is submitted that Mr. Anjanee Kumar Lakhotia is also a personal guarantor, which was invoked by State Bank of India on 2nd March, 2017 for default in payment of ₹ 56,46,71,807/- by the principal borrower. 10. Insofar as IDBI Bank is concerned, it is submitted that Mr. Anjanee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the National Stock Exchange (NSE) and have 23000 shareholders, more than 1000 suppliers and about 2500 employees were working between the years 1995 to 2016. According to him, MBL Infrastructure Ltd. was consistently growing and there was never any irregularity in the bank accounts. It had paid the Income-tax of ₹ 122.62 Crores, ₹ 5.12 Crores of dividend distribution tax and further taxes of ₹ 89.17 Crores for the financial years 2010 to 2016. MBL Infrastructure Ltd. has serviced interest, finance charges and bank guarantee commission of ₹ 459.58 Crores. MBL Infrastructure Ltd. has paid salary and wages to the tune of ₹ 176.93 Crores during the financial years 2010 to 2016. Despite different adverse trade cycles, it survived. The reasons for the liquidity constrains was non-availability of need based and cancellation of two BOT projects due to non-release of sanctioned limits by Banks, as also delay in realization of receivables, non-issuance of LC/BGs within the sanctioned limits by some of the consortium banks, blockage of money in nearly completed projects, continued debt servicing despite inadequate cash accruals etc. After due di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently disposed of as withdrawn on 23rd March, 2018 but without liberty to the banks to raise the same issue in any other appeal. 16. From the aforesaid fact, we find that the Appellants earlier raised the question of ineligibility of the resolution applicant , which was not accepted by this Appellate Tribunal and the appeals preferred by the two Appellant Banks were dismissed as withdrawn without any liberty to raise such issue again before this Appellate Tribunal. 17. So far as the feasibility and viability of the resolution plan is concerned, the Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. Anr. vs. Union of India Ors. (2019) 4 SCC 17) observed : 73 . Under the Code, the Committee of Creditors is entrusted with the primary responsibility of financial restructuring. They are required to assess the viability of a corporate debtor by taking into account all available information as well as to evaluate all alternative investment opportunities that are available. The Committee of Creditors is required to evaluate the resolution plan on the basis of feasibility and viability. Thus, Section 30(4) states: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors and other stakeholders involved in the resolution plan: Provided that the adjudicating authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. 75. Since the financial creditors are in the business of moneylending, banks and financial institutions are best equipped to assess viability and feasibility of the business of the corporate debtor. Even at the time of granting loans, these banks and financial institutions undertake a detailed market study which includes a techno-economic valuation report, evaluation of business, financial projection, etc. Since this detailed study has already been undertaken before sanctioning a loan, and since financial creditors have trained employees to assess viability and feasibility, they are in a good position to evaluate the contents of a resolution plan. On the other hand, operational creditors, who provide goods and services, are involved only in recovering amounts that are paid for such goods and services, and are typically unable to assess viability and feasibility of business. The BLRC Report ..... X X X X Extracts X X X X X X X X Extracts X X X X
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