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TMI Blog2019 (1) TMI 1766X X X X Extracts X X X X X X X X Extracts X X X X ..... evant to the issue in question, as mentioned in the Application, are as follows: (1) C.P.(IB)No.l55/BB/2018 is filed by M/s. Elite Brilliant Limited (Petitioner/Operational Creditor) u/s.9 of the IBC, 2016, r/w Rule 6 of the I&B (AAA) Rules, 2016, by inter alia seeking to initiate CIRP in respect of the Corporate Debtor i.e., M/s. ILC Industries Limited, was admitted by the Adjudicating Authority, vide order dated 16-4-2019 by appointing Mr. Ravindranath Narayana Rao, as the Interim Resolution Professional, imposing moratorium, etc. Subsequently, the Committee of Creditors of the Corporate Debtor in their first meeting of the CoC held on 28-5-2019 confirmed the appointment of Mr. Ravindranath Narayana Rao, as the Resolution Professional. This Adjudicating Authority vide order dated 26th November, 2019, extended CIRP of the Corporate Debtor by further 90 days beyond 180 days period starting from October 13th 2019 i.e. till January 13, 2020 upon an Application filed by RP under section 12 of the Code, read with Regulations 40 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. (2) In pursuant to the admission of the case, the RP published advertis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essional had not received any Resolution Plan from the above shortlisted Applicants till September 15, 2019. (6) It is further stated that fourth meeting of CoC was held on 09-8-2019 and Resolution Professional Informed to CoC about the eligibility criteria and informed that all was eligible to submit a Resolution Plan. Further, the Resolution Professional received a request on 15th September, 2019 from one of the prospective Resolution Applicant, namely, Karatagi Refineries Private Limited and ILC Iron and Steel Pvt. Ltd., requesting extension of one month (up to 15th October, 2019) period for submission of Resolution Plan for ILC Industries Ltd. The Sixth Meeting of Committee of Creditors of the Corporate Debtor was held on 4th October 2019, where in a resolution to seeking an extension of CIRP by 90 days and thus time was granted by the Adjudicating Authority, on November 26, 2019. (7) It is stated that the Resolution Applicant, upon communication of rejection of Resolution Plan, has revised and submitted the Revised Plan to the Resolution Professional on 13th of December 2019. The Resolution Professional called for a CoC meeting on 16th December, 2019 to deliberate on the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the approval order of this Resolution Plan Board Directors of the company shall be reconstituted at the option of the Applicant. (iii) Management of by virtue of the order of the Adjudicating Authority approving this Resolution Plan, and on the date of approval of this Resolution Plan, the existing articles of association of the Company shall stand amended and modified, and the draft articles of association that are indicated or informed by the Resolution Applicant shall be in force and effect. (iv) All existing authorisations for operating bank accounts of the Company (both physically and online) shall be withdrawn and all such authorisations shall be suitably modified by the applicant on the Settlement Date. However, the Resolution Professional shall carry on such operations till the Settlement Date. (v) Management Committee shall comprise for Resolution Professional, members chosen by the applicant, and representative of Financial Creditors to oversee implementation of the Plan. This committee shall monitor the implementation of the Plan and shall be responsible till last payout as per Schedule are made. Frequency of meetings, modes of communication, roles and responsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions for effective implementation IV. It has provisions for approvals required and the timeline for the same & V. The Resolution Applicant has the capability to implement the Resolution Plan. (h) Future Projections Particulars 2019-20 2020-21 2021-22 2022-23 2023-24 Total revenue 13,05,18,546 14,98,06,158 15,71,87,699 17,25,27,137 18,93,81,552 Total expense 13,17,28,002 14,42,32,047 15,01,56,691 16,08,96,401 17,20,70,359 Profit Before Tax (12,09,456) 55,74,111 70,31,008 1,16,30,736 1,73,11,193 (10) Other Terms and Conditions proposed by the Resolution Applicant in the Resolution Plan were as follows: i. Payment to Financial Creditors: It is noted that the CD has two categories of Financial Creditors, whose claims have been admitted by the RP. The first category being Pragati Gramin Bank, the sole secured Financial Creditor and the second category comprising of TMSCCL and Mineral Embassy being the other two unsecured Financial Creditors. Accordingly, the Plan provides for appropriate levels of dispensation amongst three Financial Creditors as under: ii. Payment of the dues of Pragati Gramin Bank (PGB) the secured financial creditor: Paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the Promoters of the Company in connection with any Operational Debt of the Company, at any time prior to the Insolvency Commencement Date, shall automatically be waived and/released or lifted and all liabilities and obligations of the Company shall stand permanently waived and/or released on the approval of this Resolution Plan by the Adjudicating Authority, without requirement of any further action on part of any party. ii. Subject to the Adjudicating Authority granting the relief as set out in this Resolution Plan, any and all rights and entitlements of any actual or potential Third Party, whether admitted or not, due or contingent, asserted or non- asserted, crystallized or non-crystallised, 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. (11) The term of the Resolution plan maybe considered as Implementation day Plus 300 Days, months from the month following the month in which the Resolution Plan is approved by the Adjudicating Authority. And the Company p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 crore. c. To withdraw all its balance claims over and above the settlement provided for in the Plan. d. To grant exemption/grant of relief to the company from the provisions of Sections 28, 41(1), 45, 72 (3), 43-B, 79, 80 read with 139, 115JB and the provisions of Chapter XVII of the Income Tax Act and other applicable provisions of the Income Tax Act. e. To waive the penalty/damages, interest, if any charged on the income tax arrears. f. To withdraw all existing attachments/recovery proceedings against the Corporate Debtors/its Directors, as the case maybe relating to the tax arrears of the corporate debtor. vi. Central Board of Excise and Customs (CBEC) a. To accept the payment provided under the "Plan" at Rs. 17,35,072/- (Seventeen lakh thirty five thousand seventy two only) , in full and final settlement of all its claims against the corporate debtor up to the commencement date, b. To waive the penalty/damages, interest, if any charged on the customs duty arrears. c. To withdraw all its balance claims over and above the settlement provided for in the Plan relating to claim for both Customs Department at Mangalore, Guntur, Mumbai and Krishnapattam. d. To with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hts over the cargo lying at Bevinahalli (EoU PLANT) Bellikeri Port and Krishnapatnam Port, under restraint orders from Karnataka State Forest Department and DMG Koppal, upon the issues reaching its finality. However, if the decision of the Courts goes against them, they shall not have any recourse against the corporate debtor or the RA. However, if the decision of the Courts goes against them, they shall not have any recourse against the Corporate Debtor or the RA. 3. Heard Shri A. Murali along with Ms. Jyothi Anumolu, learned Counsel for the Resolution Professional/Applicant and Shri Ravindranath Narayana Rao, and learned Resolution Professional. We have carefully perused the pleadings of party and extant provisions of the Code and the Rules made thereunder. 4. Shri A. Murali, learned Counsel for the RP/Applicant, while reiterating various averments made in the Application, has further submitted that the Resolution Plan, as approved by the CoC satisfy all requisite conditions as per the provisions Code and the same is approved with requisite majority and thus urged the Tribunal to approve the Resolution Plan. He has produced Minutes of the 13th meeting of CoC of ILC Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicants 10-7-2019 11 Date of Invitation of Resolution Plan 16-8-2019 12 Last Date of Submission of Resolution Plan 30-10-2019 13 Date of Approval of Resolution Plan by CoC 16-12-2019 14 Date of Filing of Resolution Plan with Adjudicating Authority 30-12-2019 15 Date of Expiry of 180 days of CIRP 13-10-2019 16 Date of Order extending the period of CIRP 21-11-2019 17 Date of Expiry of Extended Period of CIRP 13-1-2020 18 Fair Value Valuer 1 156,590,999 Valuer 2 152,621,158 19 Liquidation value Valuer 1 104,577,892 Valuer 2 100,316,619 20 Number of Meetings of CoC held 13 Numbers 2. The Resolution Plan dated 13-12-2019 received from Resolution Applicant M/s. Karatagi Refineries Private Limited and approved by Committee of Creditors (CoC) of ILC Industries Limited on 16-12-2019. 3. He has hereby certified that: i. The said Resolution Plan complies with all the provisions of the IBC, 2016, the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and does not contravene any of the provisions of the law for the time bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held before CIRP Voting Share (%) held after CIRP 1 Equity 92.86 0 100% 0% 8. The compliance of the Resolution Plan is as under: Section of the Code Regulation No. Requirement with respect to Resolution Plan Clause of Resolution Plan Compliance (Yes/No) 25(2)(h) Whether the Resolution Applicant meets the criteria approved by die CoC having regard to the complexity and scale of operation of business of the CD? 10, 12 & 14 Yes Section 29A Whether the Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? Annexure Yes Section 30(1) Whether the Resolution Applicant has submitted an affidavit stating that it is eligible? Yes Section 30(2) Whether the Resolution Plan: (a) provides for the payment of insolvency resolution process costs? Yes (b) provides for the payment of the debts of operational creditors? Yes (c) provides for the management of the affairs of the Corporate Debtor? Yes (d) provides for the implementation and supervision of the resolution plan? Yes (e) Contravenes any of the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it is made clear in the following table: Sl. No. Type of Transaction Date of Filing with Adjudicating Authority Date of Order of the Adjudicating Authority Brief of the Order 1 Preferential transactions under section 43 - - - 2 Undervalued transactions under section 45 - - - 3 Extortionate credit transactions under section 50 - - - 4 Fraudulent transactions under section 66 - - - 9. The above facts and circumstances of the case, clearly established that the Resolution Plan dated 13th December 2016, which was approved by the CoC on 16-12-2019 for ILC Industries Ltd., submitted by M/s. Karatagi Refineries Private Limited, Resolution Applicant, confirm all the requisite conditions so as to approve it under section 31(1) of Code by the Adjudicating Authority. The Resolution Plan is approved by the CoC with 100% in accordance with law. All the relevant provisions of Code and the rules made thereunder are duly followed by the Resolution Professional and the Committee of Creditors. Therefore, we are of the considered opinion that the said Resolution Plan is a fit to be approved under section 31(1) of the IBC, 2016. 10. In the result, by exercising the powers c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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