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TMI Blog2020 (9) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... that as per Explanation 2 of Section 30 of the Code, the provisions of this clause shall also apply to Corporate Insolvency Resolution Process (hereinafter referred to as CIRP) of the Corporate Debtor, where the resolution plan is not finally approved. 2. The Applicant submits that Applicant dissented and opposed approval of the Resolution Plan in the 11th meeting of Committee of Creditors (hereinafter referred to as CoC) held on 29th September, 2019 and CoC approved the Resolution Plan with 69.30% voting share. However, as per the orders of this Adjudicating Authority in I.A. No. 427 of 2018, the CoC was reconstituted for updating the claim of the Financial Creditor, who was the applicant of I.A. No. 427 of 2018. The Resolution Professional, thereafter filed I.A. No. 607 of 2019 for approval of the Resolution Plan. 3. The Applicant submits that pending the petition, the Parliament amended the Code through The Insolvency and Bankruptcy Code (Amendment) Act, 2019 which received the assent of the President on 5.8.2019. As per the amendment, Section 30(2) of the Code has been amended. Simultaneously, Regulation 38 of the CIRP Regulations has also been amended by the IBBI. The amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in view of the amendment to the Act and the Regulations, the Applicant being a dissenting Financial Creditor, is entitled to the amounts in priority. However, the Resolution Professional, in response to the mail of the Applicant dated 13.12.2019, sent a letter dated 17.12.2019 to the Applicant stating that the Applicant is not entitled to the benefit of the amended Act and the amended Regulations. 8. In view of the aforesaid, the Applicant is constrained to prefer the present application seeking appropriate directions against the Respondents and prays for following relief(s): A. This Adjudicating Authority may be pleased to declare and order the Resolution Plan in relation to B.P. Food Products Private Limited, the Corporate Debtor, to the extent it does not provide payment of dues of dissenting Financial Creditor to be paid in priority, is liable to be rejected as it is not in conformity with Section 6 of the Insolvency and Bankruptcy Code (Amendment) Act, 2019 r/w Section 30(2) of the Code r/w Regulation 38 of CIRP Regulations, in the interest of justice and equity. IN THE ALTERNATIVE B. This Adjudicating Authority may be pleased to order an appropriate modification in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd in priority to the 2[payment] of other debts of the| corporate debtor;] 8[(b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than- (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. Explanation 1. -- For removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such {creditors] Explanation 2. -- For the purpose of this clause, it is hereby declared that on and from the date of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 21 and did not vote in favor of the resolution plan, shall be paid in priority over financial creditors who voted in favor of the plan. 9.8 The Resolution Professional has further stated in his aforesaid communication to the Applicant that as per Regulation 39)2) of the CIRP Regulations, 2016 the Resolution Professional shall submit all Resolution Plans which comply with the requirements of the Code and Regulations made there under. 10. Observations: 10.1 This Adjudicating Authority, in the instant case, has observed that Resolution Applicant has submitted the amended Resolution Plan which does not provide for priority payment to the Dissenting Financial Creditors, before the CoC on 13th September, 2019, after examining the contents of the Resolution Plan as per the provisions of the Code and Regulations made there under, existing on 13th September, 2019. The Resolution Plan was in compliance with Regulation 39(2) of CIRP Regulations. 10.2 In the 12th CoC meeting held on 3rd December, 2019, provisions of Section 30(2) were examined by CoC and observed that the amount provided in the Resolution Plan to each of the Financial Creditors is more than the amount available to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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