TMI Blog2019 (2) TMI 1819X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of 270 days already expired two months ago. Hence, it is of no use to refer other two plans- one by Mr. Madan Mohan Mal and the other by Mr. Prashant Damani back to CoC's consideration. It cannot be done now. I am not entering into controversy whether both of them are related party of the corporate debtor or not and whether the provisions of section 29A are not applicable to the corporate debtor, in view of section 240A of I B Code. Such questions are irrelevant. CoC has approved the only one plan i.e. M/s.K.L.Jute Private Ltd. However, in my considered opinion that plan does not comply all provisions stated in section 30(2) of I B Code. I have to reject that plan. The Liquidator, in view of provision of section 33(6) of I B Code is replaced - Corporate Debtor - Tirupati Jute Industries Limited is liquidated as a going concern under regulation 32(c) of the IBBI (Liquidation Process), Regulation 2016. List the matter on 30.04.2019 for filing of the progress report. - CP (IB) No. 508 (KB) of 2018, CA (IB) Nos. 972, 974, 1013 (KB) of 2018, 08, 24 & 83 (KB) of 2019 - - - Dated:- 13-2-2019 - Madan B. Gosavi, JUDICIAL MEMBER For the Petitioner : Joy Saha, Sr. Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to publish invitation calling Eol or resolution plan. 5. It is further seen from the materials on record that in the 4th CoC meeting dated 04.04.2018, the CoC passed resolution directing RP to publish notice calling upon invitation to submit Eol and resolution plan on the basis of the status of the corporate debtor AS IS WHERE IS and AS IS WHAT IS BASIS . Accordingly, the RP published the notice calling upon the Eol and resolution plan from the prospective resolution applicant to take up affairs of the corporate debtor AS IS WHERE IS and AS IS WHAT IS BASIS meaning thereby that the jute mill of the corporate debtor is being run by M/s. Daaksh Jute LLP on the basis of lease agreement dated 01.01.2016. This notice was published in the Indian Express dated 06.05.2018, i.e. almost five days after the date of admission of the corporate debtor in CIRP. There appears no reasons assigned by the RP and the CoC as to why such valuable period of almost 150 days was being wasted. Be that as it may, the Eol/Plans were to be submitted on or before 23.05.2018. As the RP did not receive any resolution plan till the last date, the time to submit Eol was extended till 15.06.2018. 6. It appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. 10. Ld. Advocate, Mr. Thakkar further submitted that the plan submitted by K.L.Jute claimed certain waivers on tax, government dues, etc. but it is the resolution of the corporate debtor. This authority may consider that aspect. According to ld. Counsel at present Jute Mill of the corporate debtor is being run by M/s. Daaksh Jute on the basis of the lease agreement. The Successful Resolution Applicant, Mr. K.L. Jute submitted its plan with a condition that he should get the assets of the corporate debtor free of any encumbrances. Hence, the lease agreement of M/s. Daaksh Jute LLP has to be terminated by this authority. The CoC has considered this aspect while approving the plan. He further submitted that Regulation 39(3) of IBBI (IRP for the Corporate Persons) Regulations, 2016, allows the CoC to accept the resolution plan with certain modifications so as to make the plan workable. Hence, there is no ground for this authority to reject the plan which is approved by the CoC. Ld. Counsel further submitted that section 238 of the Code states that the provision of this Code has overriding effect against other provisions of law which are inconsistent with the Code. This authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s who have taken objection for approving the plan made his submission. However, their objective is limited to the fact that in the plan which is submitted for approval, the workmen's interest is not adequately protected. It is mentioned in the plan that claim towards their gratuity although included in the list of claim, but not admitted by the Resolution Applicant. Ld. Sr. Counsel while arguing on behalf of the workmen submitted that firstly the corporate debtor and thereafter M/s. Daaksh Jute LLP entered into settlement with the workmen and showed his willingness to pay shortfall of their salaries of ₹ 307- per day from 01.08.2016. Total amount is payable to the workers is about ₹ 98,23,395/-. In the Resolution plan, no provision is made to pay that amount. The plan is detrimental to the interest of workers. It cannot be approved. It is further submitted by the ld. Sr. Counsel that K.L.Jute Products Pvt. Ltd. has no experience to run the jute mills as they are only traders in jute supply sector. He pointed out that judgment of NCLT, Mumbai Bench in case of Raj Oil Mills was considered by NCLAT in appeal No. 304/2018, and it has been explained more explicitly holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If at all the RP and CoC wanted to give such concessions to K.L.Jute by accepting their plan having conditions of the eviction of Daaksh Jute LLP, then why same concessions was not given to Mr. Madan Mohan Mal. It shows that RP and CoC did not act in fair manner, while considering all plans submitting before them. He pointed out that the RP and CoC have changed the evaluation matrix of all resolution applicants twice and thereby brought down his client's credit ratings. 17. Ld. Sr. Counsel submitted the order of NCLT, Mumbai Bench in the case of Raj Oil Mills is explained by the Hon'ble NCLAT. The Hon'ble NCLAT held in clear terms that to evict the tenant from the premises of the corporate debtor, upon approval of resolution plan, is not within the jurisdiction of Adjudicating Authority. The parties have to approach proper forum. Ld. Sr. Counsel also submitted that Mr. Madan Mohan Mal is not related party of the corporate debtor. Even otherwise, the corporate debtor being small/medium scale industries, the provision of section 29A of I B Code are not applicable in view of provisions of section 240A of the I B Code. The ld. Sr. Counsel also relied on number of rulin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plan submitted for my approval meets the requirement of law as stated in section 30(2) and section 31 of I B Code. 22. Section 31 states that,- (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (Rest is not produced as not required) 22.1. Section 30(2) states the mandatory requirement of the plan submitted for my approval as follows: (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 repayment, payment of other d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t condition while accepting the plan of M/s. K.L. Jute, I found that RP/CoC exactly did the same thing when they approved the plan submitted by M/s. K.L.Jute. I examined the plan of K.L.Jute Products Private Ltd. M/s. K.L.Jute has made it clear in the resolution plan that the plan is subject to extinguishment of all claims (except criminal proceeding) against the corporate debtor upon approval of their plan by this authority. They gave list of such conditions precedent in the plan itself and stated that the plan is submitted subject to compliance of those conditions. Those conditions were relating to exemption of all taxes/dues by the government/ local authorities, disposal of all proceedings pending against the corporate debtor relating to such dues. Now having submitted the plan after considering the invitation of plan on the basis of AS IS WHERE IS AND AS IS WHAT IS basis, it was not proper on the part of K.L.Jute to put all above conditions in the plan. In my considered opinion, such plan ought not to have been approved by the CoC. 25. One can understand that the resolution applicant seeks some exemption from paying some past dues, taxes payable by the Corporate Debtor. Unle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to evict the tenant. The Hon'ble NCLAT considering that facts held that, Adjudicating Authority is not competent to pass any order for eviction .In this case also M/s. Daaksh Jute LLP is lessee in possession of jute mill owned by the corporate debtor. The lease period is yet to over. It maybe true that lease deed was executed by the corporate debtor after receipt of notice under section 13(2) of SARFAESI Act. Real question is whether this authority has jurisdiction to hold that the lease is bad in law and pass order of eviction of the Daaksh Jute LLP from possession of the premises of the corporate debtor, as per the condition laid down in the resolution plan of Successful Resolution Applicant? 27. My answer to this question is that this authority does not have such jurisdiction. M/s. K.L.Jute has submitted plan to the CoC stating the above conditions, i.e. eviction of Daaksh Jute LLP. The CoC having issued public notice of invitation of Eol/Plan on AS IS WHERE IS AND AS IS WHAT IS basis, the CoC made exception to the above condition and approved the plan. The plan as approved by them cannot be effectively implemented because resolution applicant made it very clear that his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iquidator. 3. Mr. Chhedi Rajbhar is directed to issue Public Announcement stating that the corporate debtor is in liquidation, in terms of Regulation 12 of the IBBI(Liquidation Process) Regulations, 2016. 4. The Registry is directed to communicate this order to the Registrar of Companies, West Bengal and to the Insolvency and Bankruptcy Board of India (IBBI), New Delhi. 5. The Order of Moratorium passed under Section 14 of the I B Code, 2016, shall cease to have effects and a fresh moratorium under Section 33 (5) shall commence. 6. The Liquidator is directed to proceed with the process of liquidation as a going concern in a manner laid down in Chapter III of the Insolvency and Bankruptcy Code, 2016. 7. Upon proceeding with the liquidation the Liquidator shall file a preliminary report as per regulation 5, read with Reg. 13 of the IBBI(Liquidation) Regulations, 2016, at the registry within 75 days from the liquidation commencement date and continue to file progress reports as per Reg. 15(1) within 15 days after the end of the quarter in which he is appointed. 8. The fee payable to the Liquidator shall form part of the liquidation cost as provided under Reg. 4(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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