TMI Blog2021 (9) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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. - I. A. No. 19 of 2021 in C. P. (IB) No. 1399/MB/2017 - - - Dated:- 19-5-2021 - Janab Mohammed Ajmal Judicial Member And V. Nallasenapathy Technical Member For the Resolution Professional : Ms. Pooja Mahajan , Ms. Mahima Singh and Mustafa Kachwala instructed by Kachwala Misar and Co. For the CoC : Bishwajit Dubey instructed by Cyril Amarchand Mangaldas For the Resolution Applicant : Vikram Nankani , Senior Counsel with Shyam Kapadia instructed by Sujit Lahoti And Associates ORDER V. NALLASENAPATHY (TECHNICAL MEMBER). - 1. This is an application under section 30(6) of the Insolvency and Bankruptcy Code, 2016 (the Code) by the resolution professional seeking approval of the resolution plan submitted by the resolution applicant namely, Dev Land and Housing P. Ltd. 2. The facts leading to the application are as under : (a) The corporate insolvency resolution process (CIRP) of the corporate debtor was initiated by this Bench by order dated September 29, 2017 (adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said two PRAs, only DLH was found to be eligible, thus taking the total number of eligible PRAs in the process to eight. (e) The applicant submits that originally when the corporate debtor was admitted into CIRP, the RP had appointed two registered valuers to determine the liquidation value in accordance with regulations 27 and 35 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (the Regulations). Since the valuation estimates presented by the two valuers were significantly different, a third valuer was appointed and the average of the two closest estimates was used for arriving at the liquidation value. Thus the fair value and liquidation value came to ₹ 396.73 crores and ₹ 307.38 crores respectively. (f) In view of the fact that CIRP was restored and there was a significant time lapse, the applicant again appointed two valuers to determine the fair value and liquidation value. The fair value and the liquidation value of the corporate debtor as on July 31, 2020 is as under : (Amounts in INR crores) Particulars Kakode and Associates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution plan was concluded on December 31, 2020 and the resolution plan stood approved with 67.01 per cent. voting share of the CoC. Pursuant to the approval of the resolution plan by the CoC, the RP issued a letter of intent (LoI) to DLH as the successful resolution applicant (SRA) on December 31, 2020 which was accepted by DLH on January 2, 2021. (k) DLH, the SRA submitted a performance bank guarantee (PBG) on January 4, 2021 for ₹ 50 crores as required under clause 2.11.2 of the RFRP read with the terms of the resolution plan approved by the CoC. 3. The salient features of the resolution plan are as under : (A) Resolution applicant : (i) The resolution applicant (RA) is a company registered in India, with its registered office at 10th floor, Dev Plaza, Opp. Andheri Fire Station, S. V. Road, Andheri (W), Mumbai-400 058. The business started in the year 2000 by the name of Dev Construction under the leadership of Mr. Vijay Thakkar. The firm was converted into private limited company by the name of Dev Land and Housing P. Ltd. and was incorporated on April 19, 2006. The RA has been into real estate development and construction since inception. It has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claims filed disputed) 1.00 (for tax) - 6. Operational creditors-Prior SRA period None admitted (22.23) 1.63 - Actual payout 174.70 7. Allotted standstill amount (costs for monitoring committee) NA 0.50 - 8. Lease liabilities NA (showing in accounts-5.79) 5.79 - 9. Employee gratuity provisions (short-term and long-term) NA (provision in accounts-6.11) 6.11 - 10. Working capital NA 25.00 - 11. Capex NA 10.00 - Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assenting 17.17 - 0 Total 1180.95 151.00 13 (E) Source of funds : The SRA proposes to make payments to the creditors of the corporate debtor by infusing funds into the corporate debtor as follow : (a) Upfront equity infusion-₹ 50 crores through share application money. (b) Upfront unsecured loan-₹ 5 crores. (c) Sale of assets (of the corporate debtor described in clause 5.3(c) of the resolution plan)-SRA assumes ₹ 20 crores will be received within year-1. However, no value can be given as of now as the value will depend on the sale consideration to be received. For the balance amount out of the total pay-out to the creditors, SRA will infuse sufficient amount as unsecured loans (clause 5.3(d) of the resolution plan). Such unsecured loans will be interest free till the time financial creditors are repaid and stand subordinated to the loans of the financial creditors. (F) Management of the corporate debtor : As stated in claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution 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)) as per clause 4.5. (d) Declaration by the resolution applicant that neither the resolution applicant nor any of its related party has either failed or contributed to the failure of the implementation of any other approved resolution plan (regulation 38(1B)) as per clause 2.9(iii). (e) Provides for term and implementation schedule, management and control of the corporate debtor and adequate means for supervising its implementation (regulation 38(2)) as per clauses 8.1, 5.1(vii), 6.1, 6.2 and 6.3. (f) Demonstrates that it has addressed the cause of default, feasibility and viability, provisions for effective implementation, provisions for approvals required and the time-lines for the same, capability to implement the resolution plan (regulation 38(3)) as per clauses 3.2, 7, 5, 9.9 and 2. (H) Reliefs and concessions : The SRA has sought for general reliefs, concessions and dispensations at clause 10 of the resolution plan. (I) Status of the operational creditors during the peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CoC as a body does not subsist, by the financial creditors having more than 51 per cent. voting share in the CoC ; or (iii) such other period as may be required by the CoC (as assisted by the resolution professional) and/or if the CoC as a body does not subsist, by the financial creditors having more than 51 per cent. voting share in the CoC. The CoC in its commercial wisdom has permitted the SRA to take back the PBG immediately on the approval of the resolution plan by this Authority so that the fixed deposits on the security of which PBG was issued can be utilized for infusion. We do not want to interfere with such decision of the CoC, even if this is a diversion from the requirements of the RFRP. (K) Utilization of fixed deposits of former SRA (FTL) lying with the corporate debtor : As a part of the resolution plan, it has been submitted that the former SRA has infused ₹ 42.99 crores into the corporate debtor which is reflected in the current liability and the amount is kept as a fixed deposit with Bank of Baroda, the lead bank. This amount was infused as share application money. But the shares were not issued. It is stated by the new SRA that such amount infu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. 5. In view of the above ruling of the apex court, the resolution applicant takes over the corporate debtor with all its assets and liabilities as specified in the resolution plan subject to orders passed herein. As already indicated the resolution plan has been approved by the CoC with 67.01 per cent. votes in its meeting held on December 31, 2020. 6. In K. Sashidhar v. Indian Overseas Bank [2019] 213 Comp Cas 356 (SC) ; [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 the 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 Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as the permits held by the corporate debtor and the rights and benefits accrued therein, the corporate debtor (under the new management) needs to approach the authorities concerned for renewal and that the same may have to be considered by them favourably, subject to relevant Laws and Rules, so that the implementation of plan becomes smooth. (iii) With regard to the reliefs and concessions sought by the resolution applicant in respect of the corporate debtor, the Monitoring Committee 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. (iv) The memorandum of association and articles of association shall accordingly be amended and filed with the Registrar of Companies, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
