TMI Blog2019 (11) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating Authority is not merely a stamping authority to approve each and every decision of the CoC, but to test decision on three parameters i.e. (i) it's feasibility, (ii) it's viability , and (iii) it's effective implementation. If no 'Viability' and no 'feasibility' is demonstrated by CoC , then automatically such a decision is flawed one, as happened in this case. There was no sensible examination of facts figures by CoC, rather a senseless decision of liquidation was adopted - Liquidation has to be a last resort , that too in Public interest which ought to be fair and just, only in the absence of a Resolution Plan. Therefore the decision of CoC, which is adversely effecting so many lives, be based upon common judicious prudence coupled with commercial viability, and lack of these criteria is nothing but a bad exercise of a non-commercial decision. Recovery of existing receivables - HELD THAT:- Any cash recoveries made by the Resolution Applicant and/or the Company after the expiry of 3 years from the Transfer Date (including cash recoveries from the Existing Receivables) shall be retained by the Company and shall be available for use at it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor completed on 07.02.2019. (A) Miscellaneous Application No. 626 of 2019 2. This Application has been preferred U/s 33 of Insolvency Bankruptcy Code, 2016 (hereinafter referred to as I B Code ) by the Resolution Professional (hereinafter as RP ), seeking an order of this Tribunal for 'Liquidation' of the Corporate Debtor and appointment of Mr. Sudip Bhattacharya to act as 'Liquidator' of the Corporate Debtor for the completion of liquidation proceedings. 3. It is stated that the RP was appointed Interim Resolution Professional (hereinafter referred to as IRP ) of the Corporate Debtor by way of the admission order under section 7 of the I B Code passed on 17.05.2018 by this Tribunal. The IRP made a public announcement in Business Standard, Indian Express and Loksatta newspapers in terms of Regulation 6(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution process for Corporate Persons) Regulations, 2016 ( CIRP Regulations ). 4. A Committee of Creditors (hereinafter referred to as CoC ) was constituted on 06.06.2018 as per section 18(1)(c) of the I B Code, which comprised of the Financial Creditors of the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion application for the Corporate Debtor. 9. This application is by the RP seeking order of Liquidation moved as a consequence of voting result. 10. Before adjudicating on this application, it is worth to note that the decision of CoC for liquidation of the Corporate Debtor has been challenged by (i) Taguda a Resolution Applican, (ii) Lodha Development Management Pvt. Ltd. ( Lodha ), (iii) Ex directors of the Corporate Debtor as well as the (iv) Employees association of the Corporate Debtor vide respective Miscellaneous Applications independently moved by them. These objections are going to be dealt with hereunder. (B) Miscellaneous Application No. 716 of 2019: 11. This application is filed by Lodha Development Management Pvt. Ltd. ( Lodha ), a 'Financial Creditor' and one of the members of the CoC of the Corporate Debtor, having 1.03% of the voting share in the CoC. The admitted claim of Lodha after verification by the RP is ₹ 32.52 Cr. 11.1 The major grievance of Lodha is that the commercial decision arrived at by the CoC for 'liquidation' of the Corporate Debtor is not a sound decision being unsupported by any credible informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnical Services Pvt. Ltd. Fair Market Value (Rs. ) 1,03,93,09,800/- 95,11,62,281/- Liquidation Value (Rs. ) 66,34,67,003/- 67,11,18,679/- * *(there seems to be amount difference in MA 716 pg 19 rejoinder to MA 762 pg 43) 11.6 It is further submitted that as against the receipt of ₹ 200 Crores within 90 days, strangely, how the CoC has exercised its commercial wisdom by choosing liquidation of the Corporate Debtor wherein the liquidation value is merely ₹ 67 Crores (approx.) ? questioned by this applicant. On top of it, the time taken may turn out to be more than two years. 11.7 It is further submitted that Adroit Technical Services Pvt. Ltd. has assigned Nil value to majority of the sundry debts due to the Corporate Debtor. The reasons assigned for the same are that most of the debtors of the Corporate Debtor are under liquidation proceedings or NPAs themselves and that most of the receivables are outstanding for more than three years. Therefore, even if the Corporate Debtor is liquidated, the financial creditors may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ascertaining the real purpose underlying the Scheme with a view to be satisfied on this aspect, the Court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously X-ray the same. 7. That the Company Court has also to satisfy itself that members or class of members or creditors or class of creditors as the case may be, were acting bona fide and in good faith and were not coercing the minority in order to promote any interest adverse to that of the latter comprising of the same class whom they purported to represent. 8. That the scheme as a whole is also found to be just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the class represented by them for whom the scheme is meant. 9. Once the aforesaid broad parameters about the requirements of a scheme for getting sanction of the Court are found to have been met, the Court will have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons who with their open eyes have given their approval to the scheme even if in the view of the Court there would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot provided any ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable. 39. In our view, neither the adjudicating authority (NCLT) nor the appellate authority (NCLAT) has been endowed with the jurisdiction to reverse the commercial wisdom of the dissenting financial creditors and that too on the specious ground that it is only an opinion of the minority financial creditors . 44. The resolution professional is not required to express his opinion on matters within the domain of the financial creditor(s), to approve or reject the resolution plan, under Section 30(4) of the I B Code. At best, the Adjudicating Authority (NCLT) may cause an enquiry into the approved resolution plan on limited grounds referred to in Section 30(2) read with Section 31(1) of the I B Code. It cannot make any other inquiry nor is competent to issue any direction in relation to the exercise of commercial wisdom of the financial creditors - be it for approving, rejecting or abstaining, as the case may be. Even the inquiry before the Appellate Authority (NCLAT) is limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations. Indian Overseas Bank * Inadequate financial consideration State Bank of India * The offer was low. * Receivable was not assigned. * Need to relook into forensic audit (go deeper into transaction). UCO * The RA provided condition to plan. * Company have huge recovery to be made from receivables that may be recovered which can add value to the plan. 15. Canara Bank, a dissenting financial creditor, has also filed an affidavit in reply to Lodha's Application stating that Lodha has no locus to challenge the decision taken by majority of the CoC members to reject the resolution plan. (C) Miscellaneous Application No. 857 of 2019 16. The Employees Association of the 'Corporate Debtor' has filed an application challenging the decision of COC of rejecting Taguda's resolution plan. It is stated that as per the two valuers appointed, the liquidation value of the Corporate Debtor is much less as compared to the proposal of the Resolution Applicant. Hence, keeping in view the interests of all the stakeholders including employees and object of the Code i.e. promoting res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys from the date of the approval of the plan from NCLT. iv. Four immoveable properties in the name of Promoters of the Corporate Debtor would continue with the Financial Creditors having created a charge. v. Sharing of recovery from receivables from the debtors of the Corporate Debtor was agreed to be in the ratio of 75:25, where 75% is with the lenders and 25% with Taguda for the initial three year period. All costs for recovery were to be borne by the Applicant and the payment in lieu of the recovery to the financial creditors. vi. A 'Monitoring Committee', consisting of one member from amongst 5 professional consultants suggested by the CoC and one member nominated by the Resolution Applicant, would be appointed to oversee the recovery efforts made by the Resolution Applicant. vii. A 'Performance guarantee' of ₹ 10,00,00,000/- shall be submitted by the Resolution Applicant by 06.02.2019 in an instance the Letter of Intent is issued. viii. ₹ 35 Crores is being paid for capital expenditure and working capital requirements of the Corporate Debtor. 22. It is submitted that despite all modifications do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the case of Taguda or any other entity. Hence, such relief cannot be granted to Taguda. 27. Argument of SBI :- In a reply to Taguda's application SBI has preliminarily stated that the CoC of the Corporate Debtor ought not be called upon to justify the decision taken in commercial wisdom, as the same is given a paramount status without any judicial intervention. 27.1 Further, it is stated that Regulation 35(2) if the CIRP Regulations reads that: (2) After the receipt of resolution plans in accordance with the Code and these regulations, the resolution professional shall provide the fair value and the liquidation value to every member of the committee in electronic form, on receiving an undertaking from the member to the effect that such member shall maintain confidentiality of the fair value and the liquidation value and shall not use such values to cause an undue gain or undue loss to itself or any other person and comply with the requirements under sub-section (2) of section 29: (3) The resolution professional and registered valuers shall maintain confidentiality of the fair value and the liquidation value. . Therefore, as per law, the Liquida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for SBI submits that as on 31.03.2018 the trade receivables stood at ₹ 59,050.27 lakhs as per the financial statements of the Corporate Debtor and out of the total debtors of the Corporate Debtor, 11 debtors had confirmed that a sum of ₹ 976.77 crores was outstanding to the Corporate Debtor. It is stated that a large number of recoverable are from the international debtors, in particular Singapore and Dubai, where on account of sophisticated recovery mechanism, chances of recoveries are high. It is stated that apart from the receivables amounting to ₹ 120 Crores approx., which relate to entities that are in the corporate insolvency resolution process or are actually insolvent, there is no basis for SBI to justify why the remainder of receivables ought to be written off. 28. Rejoinder by Taguda :- The Resolution Applicant/Taguda in its rejoinder to SBI's reply submits that the amount offered (₹ 200 Crores payable in 90 days) by itself is 250% more than 'liquidation value' of the Corporate Debtor which is merely ₹ 76 Crores (67.11 Cr.) . As far as knowledge of liquidation value is concerned, the Ld. counsel for Taguda submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Status of Debtors Amount (Rs. in Cr.) 1 Debtors currently under CIRP or NPA 695.55 2 Debtors under liquidation by way of orders passed by the respective courts 918.73 3 Debtors who have lodged counter claims 810.07 4 Litigation taken out against the company by the debtors on various grounds 431.35 5 Promoters of debtors are bankrupt 344.34 6 Other debtors 242.96 Total 3442.99 30. It is further stated that despite the Resolution Plan being put up before CoC for a number of times and with modifications suitable to CoC, the same was rejected because of SBI making absurd claims regarding some recovery numbers, without providing any supporting documents to show the source of assessment. Hence, the Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in CoC), (ii) the Promoters of the Corporate Debtor, (iii) the employees of the Corporate Debtor and the (iv) Resolution Applicant itself. The objection raised is regarding the justification of the alleged 'commercial wisdom' claimed to be exercised by the CoC. Canara Bank is supporting the decision of CoC for liquidation as it has given its own reasons for rejection of Resolution Plan. 33. At the very threshold or ex-facie the impugned decision of the CoC stated to be bad in law, thus deserves to be overturned. If a decision of the CoC is against the 'Preamble' of The Code, such decision ought to be discarded. The preliminary contention against the rejection of 'resolution plan' and approval of liquidation' is that the plan had been rejected despite it being more than the liquidation value. The plan provides for ₹ 200 Crore upfront payment within 90 days as against ₹ 76 Crores liquidation value'. It is seen that liquidation has been chosen over the revival because the CoC happened to be under an impression that the receivables of the corporate debtor are worth ₹ 400-500 crores, however, the time period of recovery of alleged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise of prudence based upon knowledge, intelligence, brilliance and acumen ship. The terminology 'commercial' is based upon data and figures. Therefore, while applying 'commercial wisdom', there should be an existence of prudence as exercised by a common man having sufficient knowledge of the subject. Likewise, while taking a commercial decision that should be based upon the facts and figures of a situation for which such decision is taken. In this case, on the face of it both the preconditions, that is, (i) existence of prudence and (ii) existence of commercial data are missing. This is not a case where there is an attempt to tinker in a commercial wisdom . On the contrary, this is a case where there was no element of a common prudence or a basic 'commercial wisdom'. When the very existence of commercial wisdom is not in existence, then there is no question of tinkering with the impugned alleged 'commercial wisdom'. From the foregoing paragraphs as well as from the paragraphs herein below it explicitly emerges that there was no element of wisdom displayed, what to say a 'commercial wisdom'. The Hon'ble S.C. has used this phraseology wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trade Receivables' good to be recovered only ₹ 12,33,08,000/-, but rest i.e. 363,22,55,000 are considered as 'doubtful' recoveries. The Notes to the standalone financial statements reflect the following position of the Trade receivables: (Rs. In lakh) Particulars As at 31 Mar 19 As at 31 Mar 18 Gross 364,458.58 345,019.93 Unsecured: Considered Good : 1,233.08 4,896.78 Considered Doubtful : 363,225.50 340,123.15 Less: Provision for expected credit losses (363,225.50) (285,969.66) Sub Total : (363,225.50) (285,969.66) Total : 1,233.08 59,050.27 38. On one hand, the Corporate Debtor's own financial statements reflect the position of the receivables o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority is to examine the effective implementation . Relevant portions of these Sections are reproduced below :- Submission of resolution plan. 30.(1) A resolution applicant may submit a resolution plan [ along with an affidavit stating that he is eligible under section 29A] to the resolution professional prepared on the basis of the information memorandum. (2) .. (3) .. (4) The committee of creditors may approve a resolution plan by a vote of not less than [sixty-six] per cent of voting share of the financial creditors, after considering its feasibility and viability , and such other requirements as may be specified by the Board. 39.1 If no 'Viability' and no 'feasibility' is demonstrated by CoC , then automatically such a decision is flawed one, as happened in this case. There was no sensible examination of facts figures by CoC, rather a senseless decision of liquidation was adopted. 39.2 As discussed above, Liquidation has to be a last resort , that too in Public interest which ought to be fair and just, only in the absence of a Resolution Plan. Therefore the decision of CoC, which is adversely effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7] has propounded certain guidelines . As well as certain legal ratio had been laid down which is to be discussed and followed before arriving at a final decision .The appeal before the Hon'ble Supreme Court had been filed against NCLAT order dated 06.09.2018, concerning Kamineni Steel Power India Ltd.(KS PIPL), affirming the order passed by NCLT Mumbai recording rejection of resolution plan of Innoventive industries Ltd.(IIL) and directing initiation of Liquidation Process. The Hon'ble Supreme Court has recorded that in both the cases the resolution plan did not garner support of not less than 75% of voting share of the financial creditors constituting the committee of Creditors ( for short CoC ) the same stood rejected and thereby warranted initiation of liquidation process of the concerned corporate debtor, namely, KS PIPL and IIL. In the case of KS PIPL NCLT Hyderabad vide judgment dated 27.09.2017 approved the resolution plan and the moratorium thereupon ceased to effect from the date of order. Financial Creditor namely IOB, CBI Bank of Maharashtra have file an appeal before NCLAT questioning the authority of NCLT Hyderabad to approve the resolution plan despite t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the proposed resolution plan in respect of both the corporate debtors was approved by vote of less than 75% of voting share of the financial creditors or deemed to have been rejected. In that event, the inevitable corollary is to initiate liquidation process relating to the concerned corporate debtor, as per section 33 of the I B Code. 40.2 An important point has been dealt with by the Hon'ble Supreme Court by reproducing section 30 of the Code which prescribes the Submission of resolution plans , wherein vide sub section (1) (e) it is provided that a resolution plan should not contravene any of the provisions of the law for the time being in force. This is an important provision which is introduced at the very start of entertaining a resolution plan. If at threshold a plan is in contravention of law, deserves to be rejected. Likewise, adopting analogical reasoning, if a decision of CoC since inception is in contravention of law, the same is also to be rejected. In the present case ex-facie the rejection of the impugned resolution plan by itself is in contravention of the Insolvency provisions. A resolution plan which is otherwise fit to be approved but on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 30(4) of the I B Code ( refer middle of para. 42 of the Order ) 40.4 The Hon'ble Supreme Court has laid down that fullest attempt should be made to revive the corporate debtor and not to mechanically shove the corporate debtor to the brink of Liquidation process, which has the inevitable impact on larger public interest and the stakeholders in particular, including workers associated with the company (refer para 48 of the order). Therefore, the attempt of this Bench is also in the same direction. This Bench is of the view that the CoC handles or deal with the public money being bankers therefore they are the custodian and guardian of public interest. This statute has granted a statutory power to CoC which must be exercised carefully as also judicially. As per section 30 (4) of the Code the CoC may approve a resolution plan after considering its feasibility and viability. Likewise vide Regulation 39 of Corporate Insolvency Resolution Process Regulations as per sub regulation (3) it is prescribed that The committee shall evaluate the resolution plans received under sub-regulation (1) strictly as per the evaluation matrix to identify the best resolution plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that the resolution applicant M/s Taguda is a Singapore based company engaged in the business of metal trading. The company is also in wholesale import and export as well as trading of ferrous and non-ferrous metal, precious stones through its wholly owned subsidiaries. The resolution applicant is also in mining activities and real estate activities. The subsidiaries are situated in Singapore, Hong Kong, UAE and Australia. All the subsidiaries have good net worth and turnover. It is informed that the promoter/ chairman has good family background and successfully running the business. The resolution applicant proposed to settle the existing dues of creditors, as well as proposed to induct capital for necessary capital expenditure as well as to meet out the working capital requirement. The resolution applicant has proposed for up- front cash payment to the financial creditor of an amount of ₹ 47 Cr and thereafter on or before 30th day from the date of transfer pay of ₹ 50 Cr to financial credito₹ 50 Cr proposed to be paid to financial creditors on or before the 60th day from transfer date. Thereafter the next payment of ₹ 50 Cr is proposed to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP Regulations and subsequent communications received from the Resolution Professional. The Resolution Applicant proposes to implement the Resolution Plan in the manner as set forth in this Resolution Plan and seeks the support of all the stakeholders of the Company in this regard. Any action proposed to be undertaken by the Resolution Applicant for the implementation of this Resolution Plan, will be undertaken, either directly or indirectly through or with the Affiliates, subsidiaries or associates of the Resolution Applicant, either individually or collectively, as set out in this Resolution Plan and detailed in schedules attached herewith. This Resolution Plan is submitted to Mr. Subodh Kumar Agrawal (Resolution Professional) on 2 February 2019 pursuant to the public announcement dated 23 July 2018 inviting the prospective lenders, investors and any other persons to put forward a resolution plan for the Company and overrides all past discussions with the CoC and the Resolution Professional and the earlier resolution plans submitted by the Resolution Applicant, and all such earlier resolution plans shall be considered to have been nullified by this Resolution Plan. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Zaveri's foray as a businessman and owner at the same time was not a surprise considering the family he comes from i.e. Late Shri Tribhovandas Bhimji Zaveri (TBZ) family. TBZ happens to be a prestigious jeweller having multiple retail outlets in India (especially in and around Mumbai). TBZ's story began in 1864, in a tin shed at Zaveri Bazar in Mumbai when Late Shri Bhimji Zaveri's vision was to give India the jewellery it deserved, that of uncompromising quality and craftsmanship. He used a state of the art manufacturing unit that brings cutting edge innovation to jewellery making, putting the art and purity of the jewel above all else. Learning the tricks of the trade from within family, he soon took the charge at a very young age and started his business stint very successfully. TBZ, under his leadership successfully transformed into the modern and innovative jewellery maker having multiple outlets in India today. This in itself speak volumes about his capability as a visionary leader able businessman where his strong roots are nothing but inherited from his family. Having successful managed the business of TBZ and because of his exceptional out of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd capturing significant market share. Resolution Applicant is confident about the future growth and revival of the business of Company in synergy with its international business operations. Creditworthiness and financial capability of the Resolution Applicant Resolution Applicant has consolidated annual turnover of approximately USD 295,000,000 (United States Dollars two hundred and ninety five million) and net assets of approximately USD 58,000,000 (United States Dollars fifty eight million). The audited consolidated financial statements of the Resolution Applicant for the financial year ending 31st March 2018 and standalone financial statements for the financial years ending 31st March 2017 and 31st March 2016 have been separately provided. Please refer to Annexure I of this Resolution Plan for further details in relation to the financial standing of the Resolution Applicant. Resolution Applicant has financing lines available of USD 42,000,000 with a financial institution in addition to the equity support of USD 58,000,000 from its promoter. Detailed track record of Taguda highlighting past merger and acquisition is set out in Schedule IX. Proposal for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f debtors) during the period of 3 years from the Transfer Date are in excess of INR 75 crores, the Financial Creditors shall be paid 75% of the actual amounts recovered that are in excess of INR 75 crore (after paying all costs and expenses incurred in making cash recoveries and costs and expenses incurred for the Monitoring Committee). The Financial Creditors shall be paid their pro rata share at the end of each year for 3 years from the Transfer Date. For this purpose, the Existing Receivables shall be reckoned as existing on the Transfer Date. At the end of each year for 3 years from the Transfer Date If, however, the aggregate amounts of cash recoveries made by the Resolution Applicant and/or the Company from the Existing Receivables within 3 years from the Transfer Date is less than INR 75 crore (after paying for all costs and expenses incurred in making cash recoveries and costs and expenses incurred for the Monitoring Committee), no amounts shall be paid to the Financial Creditors by the Company and/or the Resolution Applicant on this account. 3. Payment for CIRP Costs and Op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for 3 years from the Transfer Date, as the Resolution Applicant believes that this time period is required to successfully recover amounts against the Existing Receivables. It is, however, clarified that the Financial Creditors shall not be paid any amounts if (i) the cash recoveries from the Existing Receivables are made after 3 years from the Transfer Date; or (ii) the cash recoveries from the Existing Receivables is less than INR 75 crore (after paying all costs and expenses incurred in making cash recoveries and costs and expenses incurred for the Monitoring Committee). For clarity, INR 197 crore is the maximum amount that the Resolution Applicant is committing to pay the Financial Creditors, and neither the Resolution Applicant nor its Affiliate (including the Company) are making a commitment to pay any amounts in addition to INR 197 crore as proposed in this Resolution Plan. MANDATORY CONTENTS OF THE PLAN In accordance with Section 30(2) of the IBC and Regulation 38 of the CIRP Regulations, this Resolution Plan includes the following mandatory contents: (i) Provides for payment of CIRP Costs in priority of the repayment of any other debts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r payment of above mentioned cost and expenses) at the end of each year for 3 years from the Transfer Date. 2 Operational Creditors (including workmen and employees) 913.79 INR 2 crore or Liquidation Value owed to Operational Creditors, whichever is higher, to be paid out of INR 50 crore of Investment Amount 3 Statutory claims NA To the extent the claims with respect to statutory liabilities are included as part of Operational Debt, proportional share out of the payments to the Operational Creditors as mentioned above, to be paid out of INR 50 crore of Investment Amount 4 CIRP Cost payment Actuals INR 1 crore, to be paid out of INR 50 crore of Investment Amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f INR 50 crore in the Equity Shares of the Company (Investment Amount). Further, an amount aggregating to INR 50 crore out of the Upfront FC Payment that is payable to the Financial Creditors, shall be paid by the Resolution Applicant through Identified Affiliate against assignment of Financial Debt of the Company of equal value out of the Admitted Debt to the Identified Affiliate on or before 30th day from the Transfer Date. The Identified Affiliate is compliant with Section 29A of IBC and the manner of payment (while at the discretion of the Resolution Applicant) shall be in compliance with the requirements of IBC and informed to the CoC. The balance INR 100 crore out of the Upfront FC Payment shall be paid by the Company to the Financial Creditors in two equal instalments of INR 50 crore each on or before 60th day and 90th day from the Transfer Date. Notwithstanding anything stated herein, the Bid Bond and the Performance Bank Guarantee/PBG as paid by the Resolution Applicant as per the requirements of RFRP shall be treated as part of the Investment Amount, and used towards payment of the first payment of INR 47 crore proposed to be made to the Financial Creditors on the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the CIRP Costs is currently being met out of the cash flows of the Company. Therefore, the Resolution Applicant proposes to pay the CIRP Cost at actuals from the cash balance available with the Company as on the Transfer Date in full and in priority to any other creditor of the Company on the date set out in Schedule V. If, however, there is a shortfall in the cash balance available with the Company to meet the CIRP Cost at actuals, such shortfall will be paid out of the Investment Amount proposed to be invested in the Company by the Resolution Applicant. For this purpose, an amount of INR 1 crore shall be set aside out of the Investment Amount for its use for the payment of any pending CIRP Costs, and if any part of this amount is not required, then such excess amounts shall be paid by the Company to the Financial Creditors. (iv) However, and without prejudice to the above, if the shortfall in cash balance available with the Company as on the Transfer Date is in excess of INR 1 crore, the Resolution Applicant proposes that INR 47 crore that is set aside to be paid to the Financial Creditors shall be reduced with an amount such that the CIRP Costs are paid in full and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all pay an amount aggregating to INR 50 crore forming part of the Admitted Debt (Assigned Debt), on the date set out in Schedule V, in consideration of the assignment of the Financial Debt of the Company of equal amount out of the Admitted Debt to the Identified Affiliate. The detailed proposal on the assignment of Assigned Debt is set out in Schedule XI. On this assignment to Resolution Applicant, the Resolution Applicant shall hold all rights in respect of the Assigned Debt, as are available with the Financial Creditors including right to enforce the identified security that has been assigned along with the Assigned Debt. The assignment of the Assigned Debt and related security will occur pursuant to and as an integral part of this Resolution Plan and shall not require any further actions and execution of any further documents by the Financial Creditors or any party concerned. (c) In addition to the payments under sub-Clause (a) and sub-Clause (b) above, the Resolution Applicant proposes that Financial Debt aggregating to INR 100 crore out of the Admitted Debt shall be repaid by the Company to the Financial Creditors in two equal tranches in the following manner: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rne by the Company. B. There shall be a monitoring committee, comprising of two members where 1 member shall be appointed from amongst up to 5 professional consultants suggested by the Financial Creditors, and the other 1 member shall be nominated by the Resolution Applicant (Monitoring Committee). From amongst the professional consultants suggested by the Financial Creditors, the Resolution Applicant shall discuss, negotiate terms of engagement and finalise 1 such consultant to be the member of the Monitoring Committee. The role of the Monitoring Committee shall be to generally oversee the recovery efforts made by the Resolution Applicant and/or the Company, and the exact scope shall be as specified by the Financial Creditors. The cost and expenses of engaging the professional consultant to be the member of the Monitoring Committee, or any other cost and expenses incurred by the members of the Monitoring Committee shall be borne by the Company, subject to a maximum amount of ₹ 75 lakhs. The term of the Monitoring Committee shall be until the completion of 3 years from the Transfer Date. C. Any cash recoveries made by the Resolution Applicant and/or the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecute power of attorney in favour of the Resolution Applicant in the form proposed by the Resolution Applicant. G. All cash recoveries and costs and expenses as mentioned above shall be routed through a separate bank account opened by the Company with any of the scheduled bank who is a part of the Financial Creditors; however, it is clarified that the Financial Creditors shall not have any lien or charge, including bankers' lien, on such bank account. (f) .. (g) Security: All Encumbrances provided by the Promoters or any third party, other than the Excluded Securities, in favour of the Financial Creditors for securing the financial debt of the Company (hereinafter referred as the Assigned Securities) shall not be extinguished or waived under this Resolution Plan and shall be assigned to Taguda India Private Limited (which entity is the 'Identified Affiliate'), along with the payment of INR 50 crore constituting the Assigned Debt by Taguda India Private Limited in the manner set out in Schedule XI. The Excluded Securities shall also not be extinguished or waived under this Resolution Plan and will continue be available with the Financial Creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny remedy available pursuant to any default including event of default (whether financial or otherwise) by the Company or the Promoters or any third party in relation to any loans or other Financial Debt availed by the Company, under any loan documents, restructuring agreements, guarantees, undertaking, or other financing agreements/ arrangements (including any undertaking, side letter, letter of comfort, letter of undertaking etc.) of any actual or potential Financial Creditors not addressed in this Clause, whether admitted or not, due or contingent, asserted or unasserted, crystallized or uncrystallised, known or unknown, disputed or undisputed, present or future, in relation to any period prior to the Insolvency Commencement Date shall be deemed to be permanently extinguished by virtue of the order of the Adjudicating Authority approving this Resolution Plan and the Resolution Professional (and his representatives, advisers and agents), the Company and the Resolution Applicant shall at no point of time, directly or indirectly, have any obligation, liability or duty in relation thereto. Furthermore, subject to sub-Clause (vii) below, any third party (other than the Promoters) who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Financial Creditors in the manner set out in this Resolution Plan (including those created/ arranged by the Company as a guarantor or a third party security provider in relation to the Company or its subsidiaries, if any), without the requirement of any further action on part of any party and the Company or Resolution Applicant. All title deeds and other documents (including charge documents, if any) in relation to such Encumbrances that are in possession of the Financial Creditors or possessed by any other Person on their behalf shall be immediately returned to the Company. (vii) The Assigned Securities shall be assigned along with the Assigned Debt. These Assigned Securities and the Excluded Securities shall continue to survive the settlement of debt of the Financial Creditors proposed in this Resolution Plan. Notwithstanding anything contained in any agreement or undertaking given by the Company and/or provisions of Applicable Law, the Excluded Securities and Assigned Securities shall be free from any subrogation rights of the Promoters or respective guarantors or security provider. By virtue of the approval of this Resolution Plan by the Adjudicating Authority, the Promo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d condoned or waived, and such agreements shall be treated as if no violation or breach has ever been committed; (b) any event of default having occurred on part of the Company under any of the financing documents entered into by the Company on its own behalf or on behalf of any subsidiaries, joint ventures or associates to secure or guarantee any of their liabilities, prior to the Transfer Date shall be waived in entirety and all rights under the existing finance documents in relation thereto shall stand extinguished; and (c) all the outstanding negotiable instruments issued by the Company or by any Person on behalf of the Company including demand promissory notes, post-dated cheques and letters of credit, shall stand terminated and the Company's liability under such instruments shall stand extinguished. 3.3 Operational Creditors (including Employees and Workmen) (i) As per the Information Memorandum, the total claims filed by Operational Creditors (excluding employees and workmen) aggregate to INR 913.04 crores out of which claims aggregating to INR 912.15 crores have been verified and admitted by the Resolution Professional pursuant to the CIRP Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 15 and 16 of Schedule VII of this Resolution Plan, other than the Operational Creditors Dues, any and all other claims or demands made by, or liabilities or obligations owed or payable to (including but not limited to any Operational Debt, any demand for any losses or damages, indemnification, principal, interest, compound interest, penal interest, liquidated damages, and other charges already accrued/ accruing or in connection with any third party claims) any actual or potential Operational Creditor, vendor, contracting counterparty, Governmental Authority, claimant or any other person whatsoever (including but not limited to the Operational Creditors and its promoters, directors and other related parties of the Company and/ or the Promoters) (collectively, Third Parties), whether admitted or not, due or contingent, asserted or unasserted, crystallized or uncrystallised, known or unknown, secured or unsecured, disputed or undisputed, present or future, whether or not set out in the Schedule III, the balance sheets of the Company or the profit and loss account statements of the Company or the Information Memorandum, in relation to any period prior to the Insolvency Commencement D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be automatically withdrawn and will not be binding on the Resolution Applicant if these reliefs are not granted by the Adjudicating Authority, unless otherwise agreed in writing by the Resolution Applicant accepting any outstanding and continuing liability. 3.4 Statutory liabilities including outstanding Governmental Authority dues, taxes, etc: (i) The statutory liabilities payable by Company includes without limitation monetary claims under or towards all Taxes. The claims with respect to the statutory liabilities of the Company, if forming part of the Operational Debt, shall be treated at par with the debt owed to Operational Creditors and shall be paid in priority to any amounts paid to the Financial Creditors of the Company out of the Investment Amount arranged by the Resolution Applicant, in the manner set out in Clause 3.3 above. (ii) Subject to the Adjudicating Authority granting the relief as set out in Clauses 13, 14, 15 and 16 of Schedule VII of this Resolution Plan, other than the statutory liabilities that have been filed/ claims as dues of the Operational Creditors, all monetary claims or demands made by, or financial liabilities or obligations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted or undisputed, present or future, in relation to any period prior to the Insolvency Commencement Date shall stand extinguished by virtue of the order of the Adjudicating Authority approving this Resolution Plan and the Resolution Professional (and his representatives, advisers and agents) or Company shall not be liable to pay any amount against such dues. (iv) Subject to the Adjudicating Authority granting the relief as set out in Clauses 13, 14, 15 and 16 of Schedule VII of this Resolution Plan, however, without prejudice to the above sub-Clauses, all monetary or financial liabilities or obligations (including without limitation, for any penalty, interest, fines or fees) of the Company, in relation to (a) any investigation, inquiry or show-cause, whether civil or criminal; (b) any non-compliance of provisions of any Applicable Laws, rules, regulations, directions, notifications, circulars, guidelines, policies, licenses, approvals, consents or permissions; (c) change of control, transfer charges, unearned increase, compensation, or any other such liability whatsoever under any contract, agreement, lease, license, approval, consent or permission to which the Company ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to provide for waiver and/or release from liability as mentioned in these sub-Clauses is an integral part of this Resolution Plan and this Resolution Plan shall be automatically withdrawn and will not be binding on the Resolution Applicant if these reliefs are not granted by the Adjudicating Authority, unless otherwise agreed in writing by the Resolution Applicant accepting any outstanding and continuing liability. 3.5 Treatment of amounts against the Company under ongoing litigations (i) Subject to the Adjudicating Authority granting the relief as set out in Clauses 13, 14, 15 and 16 of Schedule VII of this Resolution Plan, all financial claims arising out of any inquiries, investigations, notices, causes of action, suits, claims, disputes, litigation, arbitration or other judicial, regulatory or administrative proceedings against, the Company or the affairs of the Company, pending or threatened, present or future and the proceedings (whether civil or criminal, including under Section 138 of the Negotiable Instruments Act, 1881, and the Tax related claims or liabilities) in relation to any matter for the period prior to the Insolvency Commencement Date, including t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inistrative proceedings initiated at any time post the Transfer Date against the Company or any of its employees or directors who are appointed or who remain in employment or directorship after the Transfer Date or pursuant to the implementation of the Resolution Plan shall be independently dealt with by the Resolution Applicant and resolved accordingly and the Financial Creditors will not have any right whatsoever to opine on the manner the Resolution Applicant seeks to deal with the same. (iii) It is clarified that the Promoters and other existing shareholders, managers, directors, officers, employees, workmen or other personnel of the Company shall continue to be liable for all the claims, demand, obligations, penalties etc. arising out of any (a) proceedings, inquiries, investigations, orders, show causes, notices, suits, litigation etc (including those arising out of any orders passed by the Adjudicating Authority pursuant to Sections 43, 45, 49, 50, 66, 68, 70, 71, 72, 73, 74 of the IBC), whether civil or criminal, pending before any authority, court, tribunal or any other forum prior to the Transfer Date or (b) that may arise out of any proceedings, inquiries, investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout the requirement of any further action on part of any party and the Resolution Professional (and his representatives, advisers and agents), the Company and the Resolution Applicant shall at no point of time, directly or indirectly, have any obligation, liability or duty in relation thereto. 3. Admitted Claims (i) Notwithstanding anything contained in this Resolution Plan, claims made by the creditors and other stakeholders of the Company and stated to be paid in accordance with Clause 3 of this Resolution Plan, shall be paid only if they are verified as valid and admitted by the Resolution Professional pursuant to the IBC and CIRP Regulations. (ii) Claims that have not verified and/or admitted by the Resolution Professional pursuant to the IBC and CIRP Regulations shall not be paid any amounts, and any such claim, whether identified or unidentified, submitted or not submitted to the Resolution Professional, shall be considered to have been extinguished in its entirety on the approval of this Resolution Plan by the Adjudicating Authority without requiring any further actions on the part of the Company and/or Resolution Applicant. 4. Proposal for Settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on thereto. (ii) In addition to the INR 100 crore as set out in Clause (i) above, the Resolution Applicant shall cause the Company to pay an additional amount aggregating to INR 100 crore in two equal instalments in the following manner: (a) On or before the 60th day from the Transfer Date, an amount of INR 50 crore shall be paid by the Company to the Financial Creditors; and (b) On or before the 90th day from the Transfer Date, an amount of INR 50 crore shall be paid by the Company to the Financial Creditors. It is clarified that in case the Company is unable to fund any of the amount as set out in Clause (ii) above from its internal accruals, the Resolution Applicant shall fund such shortfall in a manner such that the Financial Creditors receive the entire amount as agreed. For this purpose, the Resolution Applicant shall subscribe to such instruments issued by the Company, including Equity Shares, convertible preference shares or convertible/non-convertible debentures or any debt funding as it may decide in its sole discretion. (iii) In addition to the Upfront Contribution and investment required under clause (ii) above, the Resolution Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or the Company over and above the liability or obligation agreed to be borne by the Resolution Applicant or the Company as part of this Resolution Plan. Upon approval of the Resolution Plan by the Adjudicating Authority, this Resolution Plan shall ipso facto form part of the Adjudicating Authority order approving the Resolution Plan. (ii) The mechanism for the implementation of the provisions of this Resolution Plan is set forth in Schedule V. (iii) The Resolution Plan shall be considered to have been implemented on the payment of the CIRP Cost, the Financial Creditors and the Operational Creditors as set out in this Resolution Plan. 7.5 Management of the Company and Supervision of the Implementation of the Resolution Plan (i) The management and supervision of the Company during the implementation phase of this Resolution Plan shall be in accordance with this Clause 7.5. (ii) Upon the approval of this Resolution Plan by the Adjudicating Authority, the following shall apply: (a) By virtue of the order of the Adjudicating Authority approving this Resolution Plan, the existing directors of the Company other than Mr. Arvind Prasad shall vacate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date. On and from the Transfer Date, any authorisation for operating the bank accounts of the Company shall be as approved by the newly constituted Board. (iii) On and from the date of approval of this Resolution Plan by the Adjudicating Authority and until the Final Settlement Date (Interim Period), the Resolution Applicant and the CoC will constitute a monitoring agency (IMA) for the supervision of the implementation of this Resolution Plan and for the day-to-day operations and management of the Company. The composition of the IMA shall be such that the majority of its members are appointed by the Resolution Applicant, and the CoC shall have the right to appoint up to 2 members. IMA shall be required and entitled to do all such acts, deeds and things as may be desirable and expedient in order to implement and give effect to this Resolution Plan and supervise the management and operations of the Company, in a manner consistent with this Resolution Plan. During the Interim Period, any and all decisions of the Board shall be subject to the approval of the IMA. All costs and fee payable to the IMA (including any legal costs which have arisen or may arise out of or in connectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Applicant acquires control over the Company on and from the Transfer Date in the manner set out in this Resolution Plan. (B) Applications for approvals: The IMA will sign all applications on behalf of the Company that are proposed to be made to any Governmental Authorities to obtain the necessary approvals (as specified in this Resolution Plan) for implementation of this Resolution Plan within the timelines set out herein, if any. Currently, no such approval is contemplated or is in the knowledge of the Resolution Applicant. (v) The Resolution Applicant shall submit a report providing the cash recoveries from the Existing Receivables at the end of each year to the Monitoring Committee till the expiry of 3 years from the Transfer Date. During the period of 3 years from the Transfer Date, the Financial Creditors and/or the Monitoring Committee shall have the right to require the Resolution Applicant to provide such information as may be required by the Financial Creditors to ascertain the exact cash recoveries from the Existing Receivables. (vi) On and from the Final Settlement Date, the operation and management of the Company shall be as desired by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this Resolution Plan or otherwise connected with this Resolution Plan, the Promoters of the Company, the CoC or the Company shall not (i) take any actions specified in Section 28 of the IBC; (ii) take any action or omission that could reasonably be expected to have a material adverse impact, directly or indirectly, on this Resolution Plan or its successful implementation; or (iii) institute or continue any proceedings against the Company or transfer, encumber, alienate or dispose of any of the assets or interest of the Company or enforce any encumbrance or security interest created by the Company or on the securities of the Company, without the prior written consent of the Resolution Applicant. It is clarified that the above Clause shall apply on and from the approval of this Resolution Plan by the Adjudicating Authority. 10 Statement on Treatment of All Stakeholders 10.1 As set out above in Clause 3 of the Resolution Plan, the Resolution Plan for the Company has dealt with the interests of all the stakeholders in the Company, including the Financial Creditors and Operational Creditors of the Company. 10.2 Unless otherwise expressly stated in this Resolution Plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed information, as the case may be; (iii) any information concerning the organisation, business, intellectual property, technology, trade secrets, know-how, finance, transactions or affairs of the Resolution Applicant; and (iv) any information or materials prepared by or for any Person or its Representatives that contain or otherwise reflect, or are generated from the aforesaid information. Provided however, that the Resolution Professional, the members of the COC and each of their Representatives, may disclose such information: (i) to any of their affiliates, head office, representative and branch office in any jurisdiction (together with the relevant party, the Permitted Parties) and to their respective employees, directors, officers, professional advisers, servants and agents; or (ii) as required by Applicable Law or by any Governmental Authority or by any applicable stock exchange or court or tribunal with jurisdiction over the Company, the Resolution Applicant or the Permitted Parties or in connection with any legal, arbitration or regulatory proceedings or procedure; or (iii) to any persons attending the meetings of the COC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproved or is modified by the CoC or the Adjudicating Authority, then such amended or modified Resolution Plan shall not be binding on the Resolution Applicant unless agreed in writing by the Resolution Applicant. 16 Sunset Clause 16.1 This Resolution Plan is valid for a period of 6 months from the date of submission of this resolution plan (Validity Period) as set out in the RFRP. Once this Resolution Plan is accepted by the CoC in this Validity Period, this Resolution Plan shall continue to be valid as required by the RFRP. 16.2 Except to the extent specifically provided, upon the rejection of this Resolution Plan by the CoC and/or the Adjudicating Authority, this Resolution Plan shall forthwith become inoperative and cease to have any binding effect on the Resolution Applicant. The above sentence is without prejudice to the right of the Resolution Applicant to get back Bid Bond (as submitted along with this Resolution Applicant) and the Performance Bank Guarantee (as and when provided by the Resolution Applicant) in accordance with the RFRP. 17 Indemnification The Resolution Applicant shall indemnify the Company, the Resolution Professional (and his re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proval of this Resolution Plan by the Adjudicating Authority and the Adjudicating Authority passing appropriate order and directions as required for the implementation of this Resolution Plan, the following steps shall be performed for the implementation of this Resolution Plan: Step Number Action Point Indicative Timeline 1. The Designated Bank Account, if not already opened, will be opened as contemplated in Paragraph 6 if this Schedule V. Before the Transfer Date 2. After completion of Step 1 above, the 25% of the Unpaid Debt held by the Financial Creditors will be converted into Equity Shares of the Company at the face value. On the Transfer Date 3. On the completion of Step 2, there will be capital reduction by way of cancellation of the following: ( i ) all Equity Shares held by the Promoters; ( ii ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. 25% of the Unpaid Debt held by the Financial Creditors will be converted into Equity Shares of the Company at the face value, and there will be capital reduction by way of cancellation of these Equity Shares held by the Financial Creditors against payment of Nil amount. The terms of the capital reduction are mentioned in Paragraph 5 below of this Schedule V. Subject to above, payment of INR 50 crore to the Financial Creditors. On 60th day from the Transfer Date* 8. 25% of the Unpaid Debt held by the Financial Creditors will be converted into Equity Shares of the Company at the face value, and there will be capital reduction by way of cancellation of these Equity Shares held by the Financial Creditors against payment of Nil amount. The terms of the capital reduction are mentioned in Paragraph 5 below of this Schedule V. Subject to the above, payment of INR 50 crore to the Financial Creditors. On 90th day from the Transfer Date* * If not a Business Day, then immediately next Business Day. 2. Shareholding Structure of the Company b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under any Applicable Law. The Resolution Applicant will comply with all the procedural requirements wherever applicable. 3.3 The Resolution Applicant proposes that no share certificate will be issued by the Company with respect to the New Equity Shares and only a letter of allotment will be issued by the Company to evidence issuance of the New Equity Shares The New Equity Shares will not be dematerialized thereby not requiring compliance with the procedural requirements of the depositories and/or the stock exchanges. Provided, however, if there any other mandatory requirements prescribed by the Reserve Bank of India as applicable for lenders for the treatment of New Equity Shares as mentioned herein, then the Resolution Applicant shall discuss those requirements with the Financial Creditors and address those requirements. 3.4 Any fee required to be paid to the ROC and the stamp duty, if any, for the increase in the authorized share capital to allow the conversion of Unpaid Debt into Equity Shares, shall be funded from the cash flows of the Company, and if cash is not available with the Company, then such expenses shall be funded by the Resolution Applicant and/or its Aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oever nature (whether under contract, equity or Applicable Law) against the Company, Assignee or the Resolution Applicant against recovery or reimbursement or any amounts paid by them pursuant to invocation of the Excluded Securities and/or Assigned Securities, and all such rights and obligations stand irrevocably and unconditionally extinguished in perpetuity. 4.3 The subscription by the Resolution Applicant or its Affiliates of the Equity Shares or any other instruments issued by the Company to fund (i) the Investment Amount of INR 50 crore on the Transfer Date, (ii) any part of the instalments of INR 50 crore each that may be funded by the Resolution Applicant on the failure of the Company to pay such instalment at the end of 60th day or 90th day from the Transfer Date, and (iii) INR 35 crore to meet the Company's capital expenditure and working capital requirements, shall be an integral part of this Resolution Plan and on the approval of this Resolution Plan by the Adjudicating Authority no separate approvals of the board of directors of the Company, shareholders of the Company, Securities and Exchange Board of India, stock exchanges and/or any other Person or Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Professional shall or IMA shall require the Company tp open a new and separate bank account of the Company (Designated Bank Account), from which bank account the payments will be made in accordance with the terms set out in this Resolution Plan. 6.2 The Designated Bank Account shall not be subject to any Encumbrance and/or any lien or security interest created in favor of the Financial Creditors, Operational Creditors or any other third party. The Resolution Professional shall ensure that the authorized representatives of the Designated Bank Account shall be changed to an authorized representative of the Resolution Applicant post the payment of Upfront FC Payment of INR 197 crores to the Financial Creditors. 6.3 The details of the Designated Bank Account shall be shared by the Resolution Professional with the Resolution Applicant for the purposes of implementation of this Resolution Plan. 7 . RECOVERY OF EXISTING RECEIVABLES 7.1 All cost and expenses incurred in making recoveries from the Existing Receivables, including the expenses for pursuing litigations, and appointing legal, financial and tax advisors, shall be borne by the Company. 7.2 There sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cash recoveries are set aside for the Company. 7.4 The Financial Creditors shall be paid their portion, i.e. 75% of the cash recoveries above INR 75 crore, at the end of each year for 3 years from the Transfer Date, i.e. one tranche payment at the end of each year subject to cash recoveries made in that year. 7.5 The Company shall be free to use its portion of the cash recoveries made within 3 years from the Transfer Date, i.e. any cash recovery upto INR 75 crore, and it's 25% share of cash recoveries above INR 75 crore (after payment of above mentioned cost and expenses), at its discretion at all times including to pay such amounts to the Resolution Applicant. 7.6 Any cash recoveries made by the Resolution Applicant and/or the Company after the expiry of 3 years from the Transfer Date (including cash recoveries from the Existing Receivables) shall be retained by the Company and shall be available for use at its discretion at all times including to pay such amounts to the Resolution Applicant. In order to make recoveries from the Existing Receivables, the Company shall be entitled to execute power of attorney in favour of the Resolution Applicant in the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties described above shall continue to be in full force and continue as if there were no default or liabilities accrued or to be accrued. In relation to the same, any procedural requirements required to be fulfilled solely by the Company (and not by any of its successors), shall be deemed to be fulfilled by the Company. The aforesaid is without prejudice to the right of termination available with each of the contracting parties under the respective contracts or Applicable Law. Nothing stated above shall apply to related party transactions and other contracts that are proposed to be terminated as part of this Resolution Plan, as indicated in Schedule VII of this Resolution Plan. 8.5 With effect from the Transfer Date, all the permits held or availed of by, and all rights and benefits that have accrued to, the Company shall without any further act, instrument or deed be transferred to, and vest in, or be deemed to have been vested in, and be available to, the Company so as to become as and from the Transfer Date, the permits, estates, assets, rights, title, interests and authorities of the Company and shall remain valid, effective and enforceable on the same terms and condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and Conciliation Act 1996 ---- Pending hearing 6. 5/19/2014 High Court of Bombay Ushdev International Limited v. Bhuwalka Steel Industries Limited Civil Suit 128,00,58,438 Pending hearing 7. 4422/SS/2015 64th Esplanade court Ushdev International Limited v. Bhuwalka Steel Industries Limited Complaint Under Section 138 of Negotiable Instruments Act, 1881 3,00,00,000 Pending hearing 8. 3606/SS/2013 To 3617/SS/2013 33rd Ballard Pier Court Ushdev International Limited v. Bhuwalka Steel Industries Limited Complaint Under Section 138 of Negotiable Instruments Act, 1881 40,00,00,000 Pending hearing 9. COMSS/331/20 17 High Court of Bombay Ushdev International Limited v. Highlander Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Power Ltd. Ors. Complaint Under Section 138 of Negotiable Instruments 9,00,00,000 Pending hearing Cases Filed Against the Company as on 14 May 2018 S.No Case Number Forum Respondent Nature Amount Ascertained Status 1. COMS/719/20 18 High Court of Bombay New Zone Interntrade FZE v. Ushdev International Limited Civil Suit Not known Pending hearing 2. COMS/718/20 18 High Court of Bombay New Alloys Trading Ltd. v. Ushdev International Limited Civil Suit Not known Pending hearing 3. COMS/720/20 18 High Court of Bombay Mine Craft Ltd. v. Ushdev International Limited Civil Suit Not known Pending he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to any delayed filing or non-filing of relevant mandatory forms or returns or any other documents, including any undertakings or acknowledgements to be filed in relation thereto, under the Act, Foreign Exchange Management Act, 1999 and any other Applicable Law. 7. The Ministry of Corporate Affairs of the Government of India, the Registrar of Companies, Mumbai and the Collector of Stamps, Revenue Department, Government of Maharashtra to waive all the past non-compliances of the Company in relation to the issue and allotment of the Equity Shares by the Company. 8. The relevant Governmental Authorities to waive all past non-compliances of the Company in relation to obtaining required corporate authorisations for undertaking related party transactions. 9. The relevant Governmental Authority to exempt the Resolution Applicant and the Company from the applicability of and payment of all Taxes under the Central Goods and Services Tax Act, 2017, and other indirect taxes, which may arise on account of the transactions envisaged under this Resolution Plan either on the Resolution Applicant or the Company or any other Person who is likely to be impacted due to implement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities) or any amounts that are due and payable on account of any ongoing litigation against the Company, which relates to the period prior to the Insolvency Commencement Date, and neither the Company nor the Resolution Applicant shall have any liability to make any payments to such Person with respect to such liability. 15. All Governmental Authorities to waive any non-compliances by the Company prior to the Transfer Date including without limiting the failure of the Company to obtain any approval from such Governmental Authority with respect to the change in control of the Company pursuant to the implementation of this Resolution Plan. 16. The Company shall be entitled to modify or terminate contracts (including the shareholders agreement and any other agreements) with related parties of the Company and/ or the Promoters entered into prior to the Insolvency Commencement Date. 17. RBI to confirm that, on and from the Transfer Date, all accounts of the Company shall stand regularised and their asset classification shall be standard for the purposes of all Applicable Laws. 18. Without prejudice to the above-mentioned provisions, the relevant Governmenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and Disclosure Requirements Regulations, 2015 (LODR Regulations), reclassification of the existing Promoters will be permitted, and (v) approval of SEBI, designated stock exchange or any court for reduction of capital of Equity Shares as contemplated by the Resolution Plan, is not required pursuant to the exemption granted under Regulation 37(7) of the LODR Regulations. SCHEDULE VIII ASSUMPTIONS Notwithstanding anything contained in this Resolution Plan or any other related documents, this Resolution Plan has been prepared on the basis of the Information Memorandum and on the reliance that all information contained in the Information Memorandum and the Data Room as of filing this Resolution Plan, is true, correct, complete and not misleading in any respect. The details for the Financial Creditors, Operational Creditors and claims from workmen and employees of the Company as set out in Schedule III of this Resolution Plan is true, correct, complete and not misleading in any respect. Strategy of The Resolution Applicant to ramp up operations of Company Resolution Applicant has presence in commodity trading where it trades into ferrous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and execution for any further documents by the Financial Creditors or any party concerned. However, for the purpose of any procedural requirement or for clarity on any aspect of the assignment of Assigned Debt or related security, the Resolution Applicant will be willing to enter into assignment deed to record the assignment and/or novation as contemplated herein including the assignment and/or novation of the identified security held by the Financial Creditors. Security for Assigned Debt As part of the assignment of the Assigned Debt, the Financial Creditors also assign and transfer to the Identified Affiliate the Assigned Securities provided by the Promoters or third parties to the Financial Creditor as security. The Assigned Securities shall not be deemed to be extinguished or waived under this Resolution Plan and all rights, title and interest therein of the Financial Creditors is hereby assigned to Taguda India Private Limited by way of this Resolution Plan, simultaneously with the payment of INR 50 crore constituting the Assigned Debt by Taguda India Private Limited. All Encumbrances provided by the Company (for clarity, other than Assigned Secur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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