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TMI Blog2019 (4) TMI 1869X X X X Extracts X X X X X X X X Extracts X X X X ..... n 7 of IBC for initiation of Corporate Insolvency Resolution Process (CIRP) against Anand Distilleries Pvt. Ltd., Corporate Debtor. The Petition was admitted by this Tribunal vide order dated 14.02.2018. The Committee of Creditors (CoC) confirmed the appointment of the Interim Resolution Professional Mr Dushyant C. Dave as Resolution Professional (RP) in their first meeting held on 20.03.2018. The 180 days for CIRP was further extended by this Tribunal for another 90 days (w.e.f. 13.08.2018) vide an order dated 09.08.2018. 3. The RP on 17.05.2018 published advertisement inviting Expression of Interest (EOI) till 16.06.2018 in all India edition of 'Business Standard', 'Dainik Bhaskar' and in Nagpur edition of 'Deshonnati'.As no plan was received till 16.06.2018 and under the decision of CoC in its Third meeting held on 28.06.2018, a public notice was issued in all India edition of 'Business Standard' and Nagpur edition of 'Dainik Bhaskar' and 'Deshonnati' intimating the extension of the last date for submission of EOIs to 30.07.2018. The last date for submission of resolution plan was again extended twice first till 30.09.2018 and subsequently till 15.10.2018. 4. The RP received a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing submission of RP as salient features of the resolution plan: Sr. No Particulars Amount Due Payment Proposed Waiver 1. CIRP Cost (As the cost is regularly met from current cash flows of the Corporate Debtor. The Outstanding CIRP cost is Rs.25 Lakhs, which shall be paid by resolution applicant. 25,00,000/- 25,00,000/- 0% 2. Operational Creditors (Trade Goods/ Services) 9,17,08,326/- 9,17,083/-* 99% 3. Operational Creditors (Employees and Workmen Dues) 10,31,972/- 10,31,972/- 0% 4. Operational Creditors (Statutory Dues) 5,65,46,804/- 5,65,465/- 99% 5. Secured Financial Creditors 92,90,68,641/- 23,00,00,000/- 75% 6. Un-Secured Financial Creditors 1,67,32,865/- 1,67,329/- 99% 7. Financial Creditors who are related parties and not part of CoC 14,43,52,426/- 0/- 100% Total 124,11,68,169/- 23,51,81,849/- *The resolution applicant has submitted that it shall augment/modify the payment being made to the certain class of Operational Creditors from 1% in the existing resolution plan to 20%. Consequently, the amount that shall be payable to the said class of operational creditors would be Rs.1,83,41,780/-, instead of Rs.9,17,083/-, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the valuation reports, it is submitted by the RP that the liquidation value of the Corporate Debtor is Rs.22.78 crores and the fair market value of the Corporate Debtor is Rs.32.48 crores. As compared to this, the amount offered in the Resolution Plan is Rs.23.51 crores apportioned to all the stakeholder which is more than the average Liquidation Value. 16. About the eligibility under section 29A of IBC, the Resolution Applicant has submitted an affidavit stating that it is not ineligible under section 29A of the I&B Code. 17. About section 30(2), the RP has submitted that the resolution plan complies with section 30(2) as follows: a) The resolution plan provides for the payment of insolvency resolution process costs in priority to the repayment of other debts of the Corporate Debtor. Payment of debt of the Operational Creditor is more than the amount that would be payable to Operational Creditor in the event of liquidation of the Corporate Debtor and provision is made to pay the Operational Creditors in priority over financial creditors in terms of Section 30(2)(a) and (b) of the Code read with Regulations 38(1). b) Section 30(2)(b) provides for payments of debts of the O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Corporate Persons) Regulations, 2016 certifying that a. The resolution plan complies with all the provisions of the I&B Code and applicable regulations thereunder and does not contravene any of the provisions of the law for the time being in force; b. The resolution applicant has submitted an affidavit under section 30(1) of the I&B Code confirming its eligibility under section 29A of the I&B Code to submit resolution plan. The contents of the said affidavit are in order; c. The said resolution plan has been approved by the CoC by the provisions of the I&B Code and the CIRP regulations made thereunder. The resolution plan has been approved by 98.72% of the voting share of financial creditors after considering its feasibility and viability and other requirements specified by the CIRP regulations; d. RP sought a vote of members of CoC by an electronic voting system which was kept open at least for 24 hours as per the regulation 26. 20. The Resolution Plan provides that the supervision of the resolution plan is to be done by the monitoring committee consisting of the present RP, as head of the monitoring committee, and one nominee from Punjab National Bank. 21. The Reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 30.01.2019 as an application for intervention, stating that resolution applicant of the approved resolution plan consists of persons who are accused in a criminal case that is still ongoing and hence is incompetent to participate in the proceedings. The affidavit is stated to be filed for the filing of the order of Hon'ble District Judge-15 & Additional Sessions Judge; Nagpur dated 27.10.2017 in Misc.Cri.Appln. No.: 2750/2017and order of Hon'ble District Judge-13 & Additional Sessions Judge; Nagpur dated 09.01.2018 in Misc. Cri. Appln. No.: 2750/2017 for the perusal of this Tribunal. Upon perusal of the order dated 09.01.2018 it is observed that prima-facie it appears that there was no modus operandi seen on the part of the applicants that they deceived to the informant by selling the land which was reserved for development purpose and that it instead of a case of cheating, it is a civil dispute. Thus the present affidavit/application is not maintainable and the said documents are irrelevant for the present proceedings. 28. The erstwhile Promotor and director of the Corporate Debtor have filed their objection to the resolution plan stating, among other things, that the succes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the promotor/director of the Corporate Debtor not being given the two rejected resolution plans are sans merit because that was not even put for voting of CoC and hence not maintainable as this along with other remaining objections are directly challenging the commercial wisdom of the CoC in approving or rejecting the resolution plan which is prohibited by the judgment of the Hon'ble Supreme Court in K. Sashidharvs Indian Overseas Bank &Ors. inCIVIL APPEAL NO.10673 OF 2018 order dated 05.02.2019. 32. There is yet another MA being 602/2019 filed by Chhattisgarh Distilleries Limited filed on 13.02.2019 under section 60(5) of I&B Code seeking, among other things, directions to permit the applicant to submit its resolution plan for consideration of the resolution professional and CoC under section 30(3) of the I&B Code. It is submitted that the section 7 petition against the Corporate Debtor was admitted by this Tribunal on 14.02.2018 after which the last dated for submission of resolution plan after several extensions was 30.09.2018 and the order for extension of CIRP period was passed on 08.08.2018 extending the CIRP period with effect from 13.08.2018. It is stated that the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue. The power of this bench to suo moto direct the CoC to consider the new resolution plan and reconsider the already approved resolution plan is confined by the scheme of the I&B Code and the interpretation of the same in the judgement of Hon'ble Supreme Court in K. Sashidhar vs Indian Overseas Bank &Ors. inCIVIL APPEAL NO.10673 OF 2018 order dated 05.02.2019 the role of the Adjudicating Authority in matters challenging the decision of CoC, accepting or rejecting the resolution plan is limited to the grounds mentioned in section 30(2) and the purely commercial decisions of CoC cannot be adjudicated by the Adjudicating Authority as they are nonjusticiable: "... 35. Whereas, the discretion of the adjudicating authority(NCLT)is circumscribed by Section 31 limited to scrutiny of the resolution plan "as approved" by the requisite per cent of voting share of financial creditors. Even in that enquiry, the grounds on which the adjudicating authority can reject the resolution plan is in reference to matters specified in Section30(2) when the resolution plan does not conform to the stated requirements. Reverting to Section 30(2), the enquiry to be done is in respect of whether the reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial 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 to the grounds under Section 61(3) of the I&B Code. It does not postulate jurisdiction to undertake scrutiny of the justness of the opinion expressed by financial creditors at the time of voting. To take any other view would enable even the minority dissenting financial creditors to question the logic or justness of the commercial opinion expressed by the majority of the financial creditors albeit by requisite percent of voting share to approve the resolution plan; and in the process authorize the adjudicating authority to reject the approved resolution plan upon accepting such a challenge. That is not the scope of juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to consider the MA of Chhattisgarh Distilleries Ltd. It is akin to evincing interest to participate in a match after the match/tournament is over. g. Further the contention of the new Resolution Applicant is that the time stops once the Resolution Plan is submitted to Adjudicating Authority for approval is also without any merit, therefore, the same is rejected. 36. The successful resolution applicant shall obtain the required necessary approvals required under any law for the time being in force within a period of one year from the date of this order or within such period as provided for in such law, whichever is later. 37. Given the above observations, we at this moment approve the resolution plan with modifications, as mentioned above, which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. 38. The moratorium order under section 14 shall cease to have effect from the date of this order. 39. The resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the IBBI to be recorded on its data ..... X X X X Extracts X X X X X X X X Extracts X X X X
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