TMI Blog2021 (4) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In CoC of Essar Steel [ 2019 (11) TMI 731 - SUPREME COURT ] the Hon ble Apex Court clearly laid down that the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved. The Resolution Plan as approved by the CoC under Section 30(4) of the Code meets the requirements of Section 30(2) of the Code and Regulations 37 to 39 of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law - Application allowed. - IA No. 126 of 2021 in CP (IB) No. 3641/MB/2018 - - - Dated:- 25-3-2021 - Janab Mohammed Ajmal , Hon ble Member ( Judicial ) And Shri V. Nallasenapathy , Hon ble Member ( Technical ) For the Resolution Professional : Mr. Saahil Memon i/b Link Legal India Law Services ORDER Per : V. Nallasenapathy , Member ( Technical ) This is an Application under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (the Code) by the Resolution Professional se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.08.2020, the Applicant and the CoC discussed the only Resolution Plan received. The CoC negotiated with the Resolution Applicants with regard to the pay-out to secured creditor. The Resolution Applicants agreed to increase the pay-out from ₹ 10 Crore to ₹ 10.5 Crore out of the overall plan outlay of ₹ 15 Crore. The CoC also requested the Resolution Applicants to provide source of fund document for obtaining internal sanction. The Resolution Applicants obtained the source of fund document on 26.11.2020 and the same was favourably considered by the CoC. vi. In 12th meeting of the CoC held on 27.11.2020, the Resolution Applicant informed that he had deposited part of the amount towards performance security and will arrange for the remaining funds within 7 days. Accordingly, the final Resolution Plan submitted by the Resolution Applicants was put up before the CoC for voting. The CoC in the same meeting unanimously (100% voting share) approved the Resolution Plan. vii. Subsequently, the Applicant issued a letter of intent to the Resolution Applicants dated 30.11.2020. 3. Salient features of the Resolution Plan are as under: a. RESOLUTION APPLICANT: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares of ₹ 10/- each and the shareholding of the Resolution Applicant as New Promoter of the Corporate Debtor will be 100% of issued and paid up share capital of the Corporate Debtor. e. TOTAL RESOLUTION AMOUNT: The Resolution Applicant proposes to make a total payment of an amount not exceeding ₹ 1500 Lakhs for resolution of the Corporate Debtor. The total resolution amount of ₹ 1500 Lakhs will be funded either in the form of secured loan from other banks or equity/or quasi equity/or unsecured loan from private investors. f. FINANCIAL TERMS: The Resolution Plan proposes a payment of ₹ 1500 lakhs to creditors (including CIRP costs), in the following manner: (Rs. in lakhs) Sr. No. Particulars Claims Admitted Proposed Amount Payment in % Payment Schedule (Within 12 Months) 6 Months 12 Months Total 1. CIRP (Going Concern cost to extent unpaid) {Note 1} - 125 100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 184.6 22.15 12% 22.15 III d. Dept of GST 326.1 39.13 12% 39.13 e. TDS 22.04 2.64 12% 2.64 f. Income Tax 0 4.75 12% 4.75 Sub Total 4 1285.5 195.52 12% 195.52 195.52 5. Contingent Liabilities - 12.08 - 12.08 12.08 6. Working Capital - 100. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India (Corporate Insolvency Resolution Process) Regulations, 2016 (the Regulations) and has submitted Form H under Regulation 39(4). It is submitted that the Plan is in compliance with the provisions of the Code and the Regulations. It is further submitted that the Resolution Applicant is not ineligible under Section 29A of the Code in view of the fact that one of the Resolution Applicant is the Promoter of the Corporate Debtor which in turn is a MSME. j. PERFORMANCE SECURITY: The Applicant submits that the Resolution Applicant has submitted performance security in form of direct deposit with the Bank of India (CoC) for an amount of ₹ 75,00,000/- as required in terms of the Code and the Regulations. Bank of India vide its email dated 04.12.2020 has confirmed receipt of the said amount from Resolution Applicant. 4. The Applicant submits that the Resolution Plan meets the requirements of Section 30(2) of the Code in the following manner: a. Plan provides for the priority payment of CIRP costs in full from the fund to be infused by the Resolution Applicant. b. To pay the Operational Creditors of the Corporate Debtor in the manner indicated supra. It is submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the Resolution Applicant is liable to make the payment as per the Resolution Plan to extent of ₹ 15 Crores only. The Resolution Applicant will not be saddled with any other liability of whatsoever nature. 7. The Resolution Applicant has further sought for general reliefs, concessions and dispensation at Clause 14.2 of the plan. The Resolution Applicant needs to approach the authorities concerned for permits, licenses, etc., if required, and same would be considered on merits by the authorities concerned in accordance with law. No direction in that regard can be passed. 8. It is beneficial to refer to the observation of the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta Ors.:(2019) SCC OnLine SC 1478 as under: 67. A successful resolution Applicant cannot suddenly be faced with undecided claims after the Resolution Plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution Applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such review having been clearly laid down in K. Sashidhar (supra). 12. In view of the discussions and the law thus settled, we are satisfied that the Resolution Plan as approved by the CoC under Section 30(4) of the Code meets the requirements of Section 30(2) of the Code and Regulations 37 to 39 of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved as provided under Section 31 of the Code. Hence ordered. ORDER (i) The Application be and the same is allowed. The Resolution Plan submitted by Mr. Rajabhau B. Shinde and Mrs. Prathiba R. Shinde annexed to the Application is hereby approved. It shall become effective from this date and shall form part of this order. It shall be binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is due, guarantors and other stakeholders involved in the Resolution Plan. (ii) The Memorandum of Association (MoA) and Articles o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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