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TMI Blog2020 (12) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution Plan submitted by the Resolution Applicant, Reliance Projects & Property Management Services Limited (formerly known as Reliance Digital Platform & Project Services Limited). 2. The facts leading to the Application are as under. i. Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated by this Bench by an order dated 15.05.2018 (Admission Order) and Manish Dhirajlal Kaneria was appointed as Interim Resolution Professional (IRP) on 18.05.2018. The IRP published a public announcement on 21.05.2018 inviting claims from the creditors of the Corporate Debtor. ii. Certain shareholders of the Corporate Debtor challenged the Admission Order before the Hon'ble National Company Law Appellate Tribunal (NCLAT) in CA (AT) (Insolvency) Nos. 255-256 & 257-258 & 259-260 of 2018, inter alia, Hon'ble NCLAT by an order dated 30.05.2018 inter alia stayed the Admission Order. However, in view of the subsequent developments, the Appellants withdrew the Appeal. The Hon'ble NCLAT by Order dated 30.04.2019, permitted the withdrawal of the Appeal and directed this Tribunal to proceed with the matter in accordance with law. iii. Accordingly, the CIRP of the Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution plans. The resolution plan submitted by Reliance Digital Platform & Project Services Limited (Resolution Applicant) was taken forward as the preferred resolution plan having regard to the feasibility and viability of the plan and its implementability. Pursuant thereto, the Resolution Applicant submitted the revised resolution plan on 13.01.2020. After due verification of the eligibility of the successful Resolution Applicant in terms of Section 29(A) of the Code, the CoC in its 19th meeting held on 02.03.2020 considered the revised and final Resolution Plan of Reliance Digital Platform & Project Services Limited and approved the Plan with the voting share of 100%. Accordingly, a Letter of Intent (LOI) dated 04.03.2020 was issued by the Applicant on behalf of the CoC to the Successful Resolution Applicant (RA) which was unconditionally accepted by the RA on 06.03.2020. 5. It is worthwhile to mention that this Tribunal, in respect of the timelines of the CIRP of the Corporate Debtor, has passed following orders: i. The period of stay between 30.05.2018 and 30.04.2019 was excluded from the calculation of the CIRP vide order dated 09.05.2019. ii. Extension of 90 days was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready enjoys, as one of the leading companies in India. The RA proposes that the existing employees and workmen of the Corporate Debtor would continue to be employed by the Corporate Debtor. Suitable augmentation of human resources will be undertaken by the RA post the Effective Date. The RA also reserves the right to assess the competence and alignment of the employees and accordingly embark upon a manpower restructuring plan. The RA proposes to undertake fund infusion for an amount up to INR 450 Crore in one or more tranches from the Effective Date which shall be utilized for (i) meeting the working capital and/or capital expenditure requirements and/or (ii) funding other operational improvements to enable the Corporate Debtor to make such payments towards certain urgent expenses for repair and upkeep of its tower and fibre assets and to avoid deterioration in the value of the assets. D. Capital Reduction & Equity Infusion: The existing pre-CIRP shareholding of the promoters / promoter group and all other existing shareholders in the Corporate Debtor shall stand cancelled without any further act or deed pursuant to the Resolution Plan. 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 ..... dmitted Amount Proposed under the Plan % of recovery under the Plan CIRP Costs - To be paid in priority in full. [Refer Note 1] 100% Workmen / Employees 1,81,27,767/- 1,81,27,767/- 100% Related Parties / potential Related Parties 269,94,30,465/- NIL NIL Statutory Creditors 31,32,81,573/- 404,45,218/- 12.91% [Refer Note 2] Operational Creditors (other than Related Parties, Statutory Creditors) 1,29,28,99,328/- 25,36,38,128/- 19.62% [Refer Note 2] Other Creditors 904,45,24,882/- 43,87,534/- 100% [Refer Note 3] Financial Creditors 41055,38,58,711/- 4235,77,87,067/- [Refer Note 4] ~10.32% [Refer Note 4] Note 1: CIRP Costs: Payment of unpaid insolvency resolution process costs (CIRP Costs) in full and in priority to all other stakeholders. In case the cash flows of the Corporate Debtor on the Effective Date are not sufficient to meet the entire Unpaid CIRP Costs, then such amount shall be deducted from the Infused Resolution Amount and paid in priority of the other stake holders. Note 2: Operational Creditors (other than workmen and employees) - Payment to them shall be as follows: a. Operational Creditors with verifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Note 1 - Reliance Bhutan Limited (RBL) (wholly owned subsidiary of the Corporate Debtor) holds preference shares in one of the other group companies of Reliance Communications Group, i.e. Reliance Realty Limited (RRL), which holds certain real estate assets. RA provides that: a. In the event RRL is able to sell its real estate assets for an amount of INR 800 Crore or more, the RA shall cause that amount of INR 800 Crore (less any taxes and transaction costs) from the value realised from the preference shares held by RBL in RRL to be distributed to the Approving Financial Creditors on a pro rata basis to their Admitted Financial Debt within 30 days of the completion of the sale and all related approvals. b. In the event the amount expected to be realised from the sale of the real estate assets of RRL is less than INR 800 Crore, the RA will purchase the real estate assets of RRL for INR 800 Crore and said amount of INR 800 Crore (less any taxes and transaction costs) shall be distributed to the Approving Financial Creditors on a pro rata basis to their Admitted Financial Debt, as would be mutually agreed between the RA, RRL and the Approving Financial Creditors. Note 2 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,339.58 Crores and Fair Market Value is INR 11,149.11 Crores. In view of the fact that the claim of Secured Financial Creditor is INR 48,091.85 Crores, the minimum Liquidation Value to the Operational Creditors would be NIL. However, a sum of INR 25.36 Crores is provided to all the Operational Creditors. 8. The Resolution Applicant proposes to appoint suitably qualified and experienced persons, key personnel and other officer for operations of the Corporate Debtor in terms of Section 30(2)(c). The Plan also provides for implementation of provision of the Resolution Plan as stated above as per Section 30(2)(d). The Resolution Applicant has given a declaration that the Resolution Plan does not contravene any provisions of the law for the time being in force. The Resolution Plan is in compliance of the Regulation 38 of the Regulations in terms of Section 30(2)(f) as under: a) Payment to Operational Creditor will be made in priority over Financial Creditor (Regulation 38(1)(a)). b) Since the plan has been approved by 100% voting share of the CoC, provision of dissenting financial creditor does not arise. This is in compliance of Regulation 38(1)(b) of the Regulations. c) Decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk & Others: 2019 SCC Online SC 257 (= (2019) 12 SCC 150) the Hon'ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon'ble Court observed that the role of the NCLT is 'no more and no less'. The Hon'ble Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan "as approved" by the requisite percent 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 Section 30(2) when the Resolution Plan does not conform to the stated requirements. 13. In CoC of Essar Steel (supra) the Hon'ble Apex Court clearly laid down that the Adjudicating Authority would not have power to modify the Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and other stakeholders involved in the Resolution Plan. ii. The distribution of the payments to the Financial Creditors shall abide by and be subject to the orders passed in IA Nos. 1960 of 2019 and 3055 of 2019 pending consideration of this Bench. The amount sought to be infused by the Resolution Applicant shall be kept in an interest bearing deposit in any Nationalised Bank till disposal of the said Applications. iii. The approval of the Resolution Plan shall not be construed as waiver of any statutory obligations of the Corporate Debtor and shall be dealt by the appropriate Authorities in accordance with law. Any waiver sought in the Resolution Plan, shall be subject to approval by the Authorities concerned. iv. The Memorandum of Association (MoA) and Articles of Association (AoA) shall accordingly be amended and filed with the Registrar of Companies (RoC), concerned for information and record. The Resolution Applicant, for effective implementation of the Plan, shall obtain all necessary approvals, under any law for the time being in force, within such period as may be prescribed. v. Henceforth, no creditors of the erstwhile Corporate Debtor can claim anything other than t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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