TMI Blog2019 (5) TMI 1892X X X X Extracts X X X X X X X X Extracts X X X X ..... Global Energy P. Ltd. is approved - application allowed. - C. A. No. 62 (PB) of 2019 in C. P. No. IB-46 (PB) of 2018. - - - Dated:- 30-5-2019 - M. M. Kumar C.J. (Retd) (President) And S. K. Mohapatra (Technical Member) For the Applicant : Abhishek Anand and Tushar Tyagi with Sandeep Mahajan , resolution professional For the Respondents : Aaditya Vijay Kumar , Aneesh Sadhwani , Vaibhav Gaggar , Sanchit Uppal , for Jai Balaji Steel Co. For the Resolution Applicant : Puneet Jindal , Senior Advocate with Raghav Kakkar, Pankaj Bhagat , for Power 2SME. ORDER M. M. KUMAR C. J. (RETD.) (PRESIDENT) .- 1. This order shall dispose of the following CAs : (i) C. A. No. 62(PB) of 2019 has been filed by the resolution professional (for brevity RP ) under sections 30 and 31 of the Insolvency and Bankruptcy Code, 2016 (for brevity the Code ) with a principal prayer to approve and accept the resolution plan approved by the committee of creditors (for brevity CoC ) submitted by the H1 resolution applicant. The resolution plan has been filed by M/ s. G. P. Global Energy P. Ltd. (for brevity G. P. Global ) in the corporate insolvency resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16, 2018 the members decided to seek extension of time beyond the period of 180 days of the CIRP to facilitate interested resolution applicants to submit their resolution plans in respect of the corporate debtor. A copy of the minutes of the meeting is placed on record (annexure A9). Accordingly, vide order dated August 29, 2018 we had granted extension of 90 days beyond 180 days (annexure A10). Subsequently, an application bearing C. A. No. 1112(PB) of 2018 was filed with a prayer to exclude certain period for the purpose of calculating the time for CIR process and the same was allowed vide order dated October 26, 2018 (annexure A14). 6. In the 7th meeting of the CoC held on October 22, 2018 the RP apprised the members that it had received two resolution plans on the last date fixed to submit the plan. It is appropriate to mention that the deadline fixed for receipt of resolution plan was extended from time to time and eventually the last date for the receipt of resolution plan was fixed at October 19, 2018. In the 8th meeting of the CoC held on November 1, 2018 the two resolution plan applicants were invited to present and discuss their plans. Thereafter the CoC asked both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Adjudicating Authority-National Company Law Tribunal. 10. Having heard learned counsels for the resolution professional and the resolution plan applicant we find that it would be first necessary to study the provisions of the Code and CIRP Regulations in order to find out whether the requirements of the statute and subordinate legislation have been fulfilled. Sections 30 and 31 of the Code are set out in extenso which reads as under : 30. Submission of resolution plan.- (1) A resolution applicant may submit a resolution plan along with an affidavit stating that he is eligible under section 29A to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor ; (b) provides for the payment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 (Ord. 6 of 2018) shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018. (5) The resolution applicant may attend the meeting of the committee of creditors in which the resolution plan of the applicant is considered : Provided that the resolution applicant shall not have a right to vote at the meeting of the committee of creditors unless such resolution applicant is also a financial creditor. (6) The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority. 31. Approval of resolution plan.- (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stake holders involved in the resolution plan : Provided that the Adjudicating Authority, shall, before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of not less than sixty six per cent. of voting share of the financial creditors, after considering its feasibility and viability along with other requirements as may be specified by the Board. Under section 30(6) the RP is obliged to submit the resolution plan as approved by the CoC to the Adjudicating Authority. 12. As per the requirement of section 29 of the Code read with regulation 36 of the CIRP Regulations an information memorandum prepared and a certification regarding the same was furnished by the RP to the CoC as well as before this Tribunal. 13. When the resolution plan as approved by the CoC is placed before the Adjudicating Authority-National Company Law Tribunal then it is to record its satisfaction as per the requirement of section 31(1) of the Code as to whether the conditions as referred to in sub-section (2) of section 30 have been fulfilled. On its satisfaction the Adjudicating Authority-National Company Law Tribunal is to approve the resolution plan which is to be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. As per section 31(3) of the Code a further provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed as cut-off date. The plan also identifies the specific sources of funds which are to be used for such payment. The resolution plan declares that regulation 38 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 is complied with inasmuch as priority is accorded to operational creditors in making payments over financial creditors. In this regard reference may be made to annexure-IV clause C point 2(c) and (d) and point 6(a) and (b) of the resolution plan. The same read as under : C. Details of resolution plan 2. Specify procedure for payment of dues towards resolution process costs/financial creditors/operational creditors/Government dues, etc. (how much fund will be raised and source) (c) Operational creditors (other than workmen and employees) ₹ 0.50 crore shall be paid up front within 30 days from the cut-off date, but before the final payment to financial creditors, on pro rata basis to the operational creditors (other than workmen and employees) in full and final settlement towards their admitted claims, as per the final claim list given by the resolution professional. (d) Operational creditors (statutory d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... par with the financial creditor . On the contrary the challenge to the constitutional validity for treating operational creditors and financial creditors differently has been repelled in the case of Swiss Ribbons P. Ltd. v. Union of India [2019] 213 Comp Cas 198 (SC) ; [2019] 4 SCC 17, because they constitute two distinct classes. The pertinent observation are extracted below (page 252 of 213 Comp Cas) : According to us, it is clear that most financial creditors, particularly banks and financial institutions, are secured creditors whereas most operational creditors are unsecured, payments for goods and services as well as payments to workers not being secured by mort gaged documents and the like. The distinction between secured and unsecured creditors is a distinction which has obtained since the earliest of the Companies Acts both in the United Kingdom and in this country. Apart from the above, the nature of loan agreements with financial creditors is different from contracts with operational creditors for supplying goods and services. Financial creditors generally lend finance on a term loan or for working capital that enables the corporate debtor to either set up and/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the approval of the resolution plan by the Adjudicating Authority. A detailed mechanism regarding the management and control is discussed in Appendix-IV with the plan. The resolution applicant has provided for an appropriate mix executive and independent directors for managing the affairs of the company. The directors would be further assisted by a team of professionals. Therefore, the third condition stand fully complied with. 18. The fourth condition envisaged by section 30(2) is that it must provide for implementation and supervision of the resolution plan. A reference in that regard has been made to point-10 under clause C of annexure-IV of the resolution plan. The manner and implementation of the supervision of the plan and adequate means for implementation have also been provided in point-10 under clause C annexure-IV. Thus, the fourth condition also stands satisfied. The implementation schedule as provided in the plan reads as under : Steps Implementation of various activity Indicative Schedule from cut-off date 1. Reconstitution of board of directors setting up of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat despite notices issued no objection has been filed by any one nor anyone has appeared before us to raise any objection. 22. However, it is necessary to refer to the provisions of regulations 38 and 39 of the CIRP Regulations to conclude that the requirements specified therein are also fulfilled and the same reads as under : 38. Mandatory contents of the resolution plan.-(1) The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. (1A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor. (1B) A resolution plan shall include a statement giving details if the resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past. (2) A resolution plan shall provide : (a) the term of the plan and its implementation schedule ; (b) the management and control of the business of the corporate debtor dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved by the committee to the Adjudicating Authority at least fifteen days before the maximum period for completion of corporate insolvency resolution process under section 12, along with a compliance certificate in Form H of the Schedule and the evidence of receipt of performance security required under sub-regulation (4A) of regulation 36B. (5) The resolution professional shall forthwith send a copy of the order of the Adjudicating Authority approving or rejecting a resolution plan to the participants and the resolution applicant. (6) A provision in a resolution plan which would otherwise require the consent of the members or partners of the corporate debtor, as the case may be, under the terms of the constitutional documents of the corporate debtor, shareholders' agreement, joint venture agreement or other document of a similar nature, shall take effect not withstanding that such consent has not been obtained. (7) No proceedings shall be initiated against the interim resolution professional or the resolution professional, as the case may be, for any actions of the corporate debtor, prior to the insolvency commencement date. (8) A person in charge of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the acceptance of resolution plan or its implementation. It would not be any impediment for us to accept the resolution plan. 26. As a sequel to the above discussion we pass the following directions : (i) C. A. No. 62(PB) of 2019-The application filed by the resolution professional for accepting the resolution plan approved as by the CoC sub mitted by resolution applicant-G. P. Global Energy P. Ltd., is accepted and it is clarified that the relief and concession set forth in Appendix II must abide by the directions issued in the preceding paragraphs. The resolution applicant-G. P. Global Energy P. Ltd., may file appropriate applications before the public authorities/Government authorities and it is needless to say that their applications would be duly considered in accordance with law. We make it clear that we are not expressing any opinion on the claim concerning reliefs and concession nor any part of this order shall be under stood in that spirit. (ii) No pending issues for consideration of the CoC have been pointed out during the course of hearing. On that account no relief could be granted. (iii) C. A. No. 742(PB) of 2019 filed by the resolution plan ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
