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TMI Blog2019 (4) TMI 1985X X X X Extracts X X X X X X X X Extracts X X X X ..... to the resolution plan dated November 2, 2018 submitted by Dera Finvest P. Ltd., resolution applicant (RA). 2. C. P. (IB) No. 1095 of 2017 was filed by Punjab National Bank under section 7 of the IBC for initiation of the corporate insolvency resolution process (CIRP) against Anand Distilleries P. Ltd., corporate debtor. The petition was admitted by this Tribunal vide order dated February 14, 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 March 20, 2018. The 180 days for CIRP was further extended by this Tribunal for another 90 days (with effect from August 13, 2018) vide an order dated August 9, 2018. 3. The RP on May 17, 2018 published advertisement inviting expression of interest (EoI) till June 16, 2018 in all India edition of Business Standard, Dainik Bhaskar and in Nagpur edition of Deshonnati. As no plan was received till June 16, 2018 and under the decision of the CoC in its third meeting held on June 28, 2018 a public notice was issued in all India edition of Business Standard and Nagpur edition of Dainik Bhaskar and Deshonnati inti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he resolution plan of Dera Finvest P. Ltd., was approved with the requisite majority in favour. 9. Eventually the RP, on November 5, 2018 filed M. A. No. 1363 of 2018 under section 30(6) of the I and B Code placing the resolution plan as approved by the committee of creditors before the Adjudicating Authority. 10. It is pertinent to note the following submission of RP as salient features of the resolution plan : Sl. No. Particulars Amount due (Rs. in lakhs) Payment proposed (Rs. in lakhs) 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. Unsecured 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplemented. The implementation period is agreed to be 6 months as per the resolution plan from the effective date. The resolution applicant has undertaken that it shall ensure that the existing directors of the corporate debtor shall vacate the post of directorship and under it, a new board of directors and manager shall manage and control the affairs of the corporate debtor. 15. According 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 the IBC, the resolution applicant has submitted an affidavit stating that it is not ineligible under section 29A of the I and 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 reso lution process costs in priority to the repayment of other debts of the cor por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion plan does not contra vene any of the provisions of the law for the time being in force in terms of section 30(2)(e). 18. The resolution plan was put to the vote in the tenth CoC meeting, and as per section 30(4), the said plan was approved by 98.72 per cent. of the CoC. 19. The RP has submitted form H, dated November 2, 2018 as required under regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 certifying that : (a) The resolution plan complies with all the provisions of the I and 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 and B Code confirming its eligibility under section 29A of the I and 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 and B Code and the CIRP Regulations made thereunder. The resolution plan has been approved by 98.72 per cent. of the voting share of financial creditors aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. Rest all the reliefs sought shall be allowed, subject to the applicable law in force including Income-tax dues. 25. Any relief, if sought in the resolution plan, where the contract/agreement/understanding/proceedings/actions/notice, etc., is not specifically identified or is for future and contingent liability is at this moment rejected. 26. The resolution plan has necessary provisions for its effective implementation. 27. The Harkar Developers P. Ltd., has filed an affidavit dated January 30, 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 the hon'ble District Judge-15 and Additional Sessions Judge ; Nagpur dated October 27, 2017 in Misc. Cri. Application No. 2750 of 2017 and order of the hon'ble District Judge-13 and Additional Sessions Judge ; Nagpur dated January 9, 2018 in Misc. Cri. Application No. 2750 of 2017 for the perusal of this Tribunal. Upon perusal of the order dated January 9, 2018 it is observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate debtor regarding the ineligibility of the resolution applicant under section 29A are not supported by any specific averment and are generally stated. The same cannot be accepted in the absence of any specific and material averment when the resolution applicant has given affidavit of eligibility as per section 30(1) and the same is certified by the RP as being in order in his form H dated November 2, 2018 as required under regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 31. The objections regarding 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 the 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. Sashidhar v. Indian Overseas Bank [2019] 213 Comp Cas 356 (SC), in Civil Appeal No. 10673 of 2018 order dated February 5, 2019. 32. There is yet another M. A. being No. 602 of 2019 fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 13,12,50,000 with the office and established its bona fide. 34. It is a peculiar situation in the present case where a resolution applicant is before this Adjudicating Authority offering better value to the corporate debtor, but this Adjudicating Authority cannot send the approved resolution plan back to the CoC for reconsideration along with apparently better resolution plan on two counts firstly, the resolution applicant has come after the submission of the approved resolution plan to the Adjudicating Authority, and secondly, the CoC or RP has not sought any relief to recall the approved resolution plan and for allowing them to reconsider the approved resolution plan along with the new resolution plan offering better value. The power of this Bench to suo motu direct the CoC to consider the new resolution plan and reconsider the already approved resolution plan is confined by the scheme of the I and B Code and the interpretation of the same in the judgment of the hon'ble Supreme Court in K. Sashidhar v. Indian Overseas Bank [2019] 213 Comp Cas 356 (SC) in Civil Appeal No. 10673 of 2018 order dated February 5, 2019 the role of the Adjudicating Authority in matters challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editors who are called upon to vote on the resolution plan under section 30(4) of the I and B Code . . . Suffice it to observe that in the I and B Code and the regulations framed thereunder as applicable in October, 2017 ; there was no need for the dissenting financial creditors to record reasons for disapprov ing or rejecting a resolution plan. Further, as aforementioned, there is no provision in the I and B Code which empowers the Adjudicating Authority (National Company Law Tribunal) to oversee the justness of the approach of the dissenting financial creditors in rejecting the proposed resolution plan or to engage in judicial review thereof. Con cededly, the inquiry by the resolution professional precedes the consideration of the resolution plan by the CoC. The resolution pro fessional is not required to express his opinion on matters within the domain of the financial creditor(s), to approve or reject the resolution plan, under section 30(4) of the I and B Code. At best, the Adjudi cating Authority (National Company Law Tribunal) 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. (d) In view of the order of the hon'ble Supreme Court, since the CoC has approved the resolution plan we have no other option but to approve the plan. (e) It is also worthwhile to mention that 270 days was over on November 12, 2018 and the new resolution applicant, namely, Chhattis garh Distilleries Ltd., filed MA on February 13, 2019 which was very much after the stipulated date of 270 days'. Preamble of the IBC is, inter alia, pro vides for insolvency resolution of corporate persons in a time bound man ner for maximisation of value of assets of such persons. (f) In the instant case though this new resolution applicant proposed for an amount of Rs. 52.50 crores but which is very much after the statutory period prescribed in the IBC. Therefore, we at this moment not inclined 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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