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TMI Blog2021 (6) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 7 of the Code and Mr. Jagdish Kumar Parulkar was appointed as the Interim Resolution Professional (IRP). The moratorium was declared w.e.f. 14.08.2019 and IRP after receipt of order on 19.09.2019 took over the charge of the Corporate Debtor on 20.09.2019. b.The IRP made a public announcement on 21.09.2019 inviting claims from the creditors of the Corporate Debtor. After receipt of claims the IRP constituted the Committee of Creditors (CoC) of the Corporate Debtor on 14.10.2019 and conducted its 1st meeting on 19.10.2019. The CoC resolved to appoint Mr. Jagdish Kumar Parulkar as Resolution Professional (the erstwhile RP) and the same was confirmed by this Bench. c.The erstwhile RP issued Form-G on 19.11.2019, inviting expressions of interest (EoI) from prospective resolution applicants (PRAs). He received EoIs from 4 PRAs namely, Prudent ARC Limited, Sanjay Badrilal Punglia and Sudeep Sampathlal Dasani, Archerchem Healthcare Private limited and Skymap Pharmaceuticals Private Limited. d.The erstwhile RP reconstituted the CoC on 27.11.2019 after receipt of one more claim from the creditor falling under the category of Financial Creditor. Two of the PRAs, namely from Archerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the eligibility of the PRA in terms of Section 29 (A) of the Code, the CoC in its 15th meeting held on 04.09.2020 considered the Resolution Plan and approved the Plan with 96.84% voting share. The details of Voting shares are as follows: Sr. No. Name of Creditor Voting Share (%) Voting for Resolution Plan (Voted for / Dissented/ Abstained) 1 Bank of India 96.84% Voted in Favour 2 Technologies LLP 3.16% Dissented 4. Salient features of the Resolution Plan: a.SUCCESSFUL RESOLUTION APPLICANT (SRA): The Successful Resolution Applicant (SRA) is the consortium of Dr. Bharat Agrawal (individual) having PAN ADFPA6925N and Theta Labs (P) Limited. Dr. Bharat Agrawal is acting as the Lead Member with 25% share in the consortium, while Theta Labs (P) Limited holds the remaining 75% share. Theta Labs (P) Limited was incorporated in the year 1994. It is a professionally managed Company under the guidance by Dr. Bharat Agrawal and Dr. Meena Agrawal. The Company is engaged in the business of Marketing and Trading of Pharmaceutical products for more than 25 years with consistent performance. b.TERM OF RESOLUTION PLAN: The term of Resolution Plan shall be from the "Effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the amount of Rs. 1280 lakhs which is proposed to be paid to BoI (secured Financial Creditor). Note1: The CIRP cost of Rs.. 125 Lakhs shall be paid in priority to the payment of other debts of the Corporate Debtor and within 90 days from the date of the receipt of the certified copy of order approving the plan (Clause 7.2 (d) of the Resolution plan). Note 2: The amount due to the Operational Creditors of the Corporate Debtor under the Resolution Plan shall be given in priority over the Financial Creditor as per Regulation 38(1) of the Regulations. d.MEANS OF FUNDS: The Resolution Plan amount of Rs..1283.39 Lakhs is funded by the internal accruals and funds to be raised from the banks/ NBFC by the SRA. The Resolution Applicant has enclosed an in-principle sanction letter from Bank of Baroda dt.02.12.2020 wherein the said bank agreed to sanction a Cash Credit of Rs.5.75 Crores and Term Loan of 9 Crores. e.REDUCTION OF SHARE CAPITAL: On the completion date, the paid-up share capital of the Corporate Debtor shall stand extinguished. f.PERFORMANCE SECURITY: The SRA has provided Earnest Money Deposit (EMD) of Rs.. 50,00,000/-. Further the SRA has made Fixed Deposit of Rs.. 3 Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r after approval of the Resolution Plan would be with the Resolution Applicant [Section 30(2)(c)]. D.The Plan also provides for implementation and supervision of the Resolution Plan as stated above [Section 30(2)(d)]. E.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 [Section 30(2)(e)]. 6.The Resolution Plan is in compliance of the Regulation 38 of the Regulations in terms of Section 30(2)(f) of the Code as under: a)Payment to Operational Creditor under the Resolution plan shall be given priority in payment over financial Creditors as per clause 7.3(g) of the Resolution plan (Regulation 38(1)(a) of the Regulations). b)Provides for payment due to the dissenting Financial Creditors in priority over assenting Financial Creditors Regulation 38(1)(b) of the Regulations. c)Declaration by the Resolution Applicant that the Resolution Plan has considered the interest of all the stakeholders of the Corporate Debtor, keeping in view the objectives of the Code (Regulation 38 (1A) of the Regulations). d)Declaration by the Resolution Applicant that neither the Resolution Applicant nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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. 11.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 Plan which the CoC in their commercial wisdom have approved. In para 42 Hon'ble Court observed as under: "Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within the four corners of section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and section 32 read with section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agement) needs to approach the authorities concerned for renewal and that the same may have to be considered by them favourably, subject to relevant Law and Rules, so that the implementation of Plan becomes smooth. c.With regard to the reliefs and concessions sought by the Resolution Applicant in respect of the Corporate Debtor, the Monitoring Agency or the new Management, as the case maybe, may approach the respective authorities and departments for such reliefs. The authorities concerned may favourably consider such applications as deemed proper under law, keeping in view the object of resolution of the Corporate Debtor as envisaged in the Code and various pronouncements of the Hon'ble Apex Court. d.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. e.Henceforth, no erstwhile creditors of the Corporate Debtor can claim anything other than the liabilities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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