9911796707
TMI Blog2021 (6) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... ankruptcy Code, 2016 (the Code), seeking approval of the Resolution Plan submitted by consortium of Mr Murari Lal Jalan and Mr Florian Fritsch (Jalan Fritsch Consortium / Resolution Applicant). 2. The facts leading to the Application may be stated as under. a. Corporate Insolvency Resolution Process (CIRP) of Jet Airways (India) Limited (Corporate Debtor) was initiated by this Bench by order dated 20.06.2019 (Admission Order) and Mr. Ashish Chhawchharia, present Applicant, was appointed as Interim Resolution Professional (IRP). In the 1st meeting of the Committee of Creditors (CoC) held on 16.07.2019, the IRP was confirmed as the Resolution Professional (RP). b. The Applicant made an advertisement on 20.07.2019 (First Round) for invitation of Expression of Interest (EoI). In response thereto the Applicant received two EoIs from Prospective Resolution Applicants (PRAs) on 03.08.2019. In view of the fact that some more credible applicants were interested in participating in the bidding process and based on the instructions received from the CoC, the time for submission of EoIs was extended till 31.08.2019 vide advertisements dated 04.08.2019 and 28.08.2019. c. On 19.11.2019, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter, in or around April 2020, the RP received informal EoIs from two individuals namely Mr. Claude Bothello and Mr. Siva Rasiah. This was brought to the CoC's notice. However, no EoI or eligibility documents were submitted by either of them. Their credibility and seriousness was neither established nor enquired into. i. Thereafter, at the 11th meeting held on 06.05.2020, the CoC cancelled and annulled the Third Round. It approved and revised the eligibility criteria in the EoI process document. Upon approval from the CoC, the Applicant published fresh advertisement on 13.05.2020 (Fourth Round) for invitation of EoI in Form G. Pursuant thereto the Applicant received EoIs from the following PRAs: i. Jalan Fritsch Consortium; ii. Consortium of Imperial Capital Investments LLC (ICIL), Flight Simulation Technique, Centre Private Limited (FSTCPL) and Big Charter Private Limited (Imperial Consortium); iii. Mr. Sivakumar Rasiah; iv. Alpha Airways; v. Mr. Brijesh Singhla; and vi. Synergy. On the basis of the eligibility criteria, the final list of PRAs in terms of Regulation 36A(12) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lockdown was in force on 05.11.2020 when the present Application was filed. Though no objection was taken to the delayed, if any, filing of the Application, we feel and accept the Application to be in time under the circumstances. 4. The profile of the Successful Resolution Applicant: a. The Jalan Fritsch Consortium is a consortium of (a) Mr. Murari Lal Jalan, a Non-Resident Indian based in United Arab Emirates (UAE) and (b) Mr. Florian Fritsch, the former being the lead Partner. Mr. Jalan will hold shares in the Corporate Debtor in his personal capacity and Mr. Florian Fritsch will hold shares therein through his investment holding company - Kalrock Capital Partners Ltd, Cayman (KCPL). KCPL will incorporate a wholly owned subsidiary in the UAE (Kalrock Co), which will hold and manage Mr. Florian's share in the Corporate Debtor. b. Business interests of Mr. Jalan are spread over in the UAE, Federative Republic of Brazil, Republic of India, Republic of Uzbekistan and the Philippines. He had a net worth of over US$ 138 million (approx. Rs.. 979 crores) as on 31st December 2019. c. Mr. Fritsch, the principal shareholder of Kalrock Group, is an experienced professional in rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned amounts. 25 Cr - 100% TOTAL 475 Cr + 25 Cr *FCs = Financial Creditors. **OCs = Operational Creditors. B. SUMMARY OF INFUSION OF FUNDS AND UTILIZATION: The infusion of funds for Resolution Plan would be met from the own sources of the SRA and from banks and financial institutions outside India. The mode of finance and utilization is as under: Infusion Timelines (in days) Amount (in Rs..) Purpose/Utilization As Equity As ECB* Upfront (within 180 days) 350,00,00,000 - CIRP Costs, Contingency Fund, Payment to Financial Creditors, Operational Creditors, Other Creditors, and other stakeholders, working capital for business, Misc. Admin Expenses 181-365 days 250,00,00,000 - Working capital for business, Portion of funds can be used for acquiring Etihad's stake in JPPL; making payments to creditors if the Successful RA is inclined in advancing any payment timelines Year 2 - 175,00,00,000 Remaining payment to Financial Creditors, Misc. expenses for general corporate and day-to-day operations, in compliance with the extent ECB Regulations. After Year 2 - 600,00,00,000 Working capital for b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SRA has set aside a sum of Rs.. 25 Crores as CIRP cost towards payment of any such costs until the Approval Date. Any expenses incurred by the Corporate Debtor from the Approval Date until the Effective Date will be incurred out of the positive bank balance of the Corporate Debtor. e. It is submitted that if the airport and parking charges are over Rs..245 Crores, then amounts over and above Rs.. 245 Crores will be first paid out of Rs.. 25 Crores reserved as CIRP cost (if there are no outstanding CIRP cost) and then out of the positive cash flows of the Corporate Debtor. Any amounts over and above such amounts will be shared between the SRA and the Assenting Financial Creditors in equal proportion. f. The Resolution Plan states that if the CIRP cost is less than the estimated amounts and the airport dues are less than Rs.. 245 Crores, then the differential amounts will be paid by the SRA to the Assenting FCs, which amounts are over and above the amounts reserved for them under this Resolution Plan. g. It is further submitted that if the CIRP cost exceeds the current estimates, the excess amount as per actuals would be borne by the SRA subject to a maximum of Rs.. 475 Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 1290, Jebel Ali Industrial First, Dubai, UAE) valued over Rs.. 50 Crores and Floating charge by way of hypothecation on India POS Credit Card receivables of the Corporate Debtor for Rs.. 350 Crores or the total outstanding dues of the AFCs, whichever is lower. iv. Upside on Sale of Aircrafts - The SRA will pay to the AFCs an upside on sale of 11 aircrafts (Five 777s; Three 737s; and Three A330s) owned by the Corporate Debtor through issue of 6,00,000 'Series B ZCBs' of the face value of Rs.. 1,000/- each, aggregating to Rs.. 60 Crores which can be redeemed after the closing date and within 365 days from the effective date. The ZCBs will be secured by 11 Aircrafts of the Corporate Debtor (mentioned above) which are intended to be sold. The upside amount will be calculated in the following manner: a) Base Value of Aircrafts has been taken at Rs.. 500 Crores i.e., no amounts are payable when Aircrafts are sold for amounts up to Rs.. 500 Crores, other than face value of Rs..60 Crores. b) 65% upside of any amounts realized from the sale of Aircrafts will be shared as redemption premium, if any, where Aircrafts are sold between Rs.. 500 Crore and Rs.. 750 Crore. c) 75% upsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (if any), maintenance costs etc. accruing with effect from the Approval Date until the actual date of sale and not exceeding 12% of the sale consideration will be reduced from the sale price before payment. vii. Upside on BKC Property - The SRA proposes to pay to the AFCs an upfront payment of Rs.. 10 Crores for the BKC Property and pay all savings derived out of settlement towards airport and parking charges below Rs.. 245 Crores. In addition, if BKC Property is sold for an amount over and above Rs.. 245 Crores in next 2 years (or if the SRA decides to retain the BKC Property for the use of the Corporate Debtor), then 50% of the upside value will be shared with the AFCs. viii. 9.5% Equity Stake in Jet Airways - The SRA proposes to issue to the AFCs, an equity stake of 9.5% in the reconstituted share capital of the Corporate Debtor. As submitted by SRA in the resolution plan, the NPV of 9.5% Equity Stake based on the market capitalization at a conservative P/E Ratio of 10 for each year (from Year 3 onwards) at Year 5 is estimated at ~Rs.. 3,485 Crores. The shares issued shall have the same rights as attached to the shares held by the SRA. Further, the shares will be allotted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30(2) of the Code read with Regulation 38(1)(b) of the Regulations, out of the amounts reserved for the Financial Creditors in terms of this Resolution Plan. IV. Treatment of Employees and Workmen: a. It is submitted that Corporate Debtor currently has large number of employees and workmen on its payrolls, who are otherwise not required for the day-to-day affairs of the Corporate Debtor and hence the RP did not account the salaries and other benefits due to such employees (estimated at approx. Rs.. 715 Crores as of September 2020) as CIRP cost. However, the SRA makes the following gratuitous proposal for the employees and workmen of the Corporate Debtor, which if acceptable, can be made available to the employees and workmen after the Approval Date: (i) Welfare Trust - SRA proposes that after the approval of the resolution plan all the people who are/were the employees and workmen of the Corporate Debtor on and from the ICD, form an employees' trust (Trust). The union leaders of the employees and workmen of the Corporate Debtor can be the trustees of such Trust and all such employees and workmen be the beneficiaries of such Trust. Such Trust can be formed by the employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor. ii. Rs.. 5,100/- cash as medical expense reimbursement for the parents of the workmen of the Corporate Debtor. iii. Rs.. 5,100/- cash as school fee reimbursement for children of the workmen of the Corporate Debtor. iv. Stationary (notebooks, school bags etc.) collectively valued at Rs.. 1,100/- for children of the workmen of the Corporate Debtor. v. One-time mobile phone recharge of Rs.. 500/- for the workmen of the Corporate Debtor. c. The above-mentioned cash payment will be made out of the Contingency Fund (Rs.. 8 Crores) reserved by the SRA. Additional amounts, if required, will be utilized out of the proceeds of sale of assets received by the Corporate Debtor. (v) IT Assets - The SRA proposes to give to each workman, one IT equipment (phone or iPad or laptop) out of the existing IT assets of the Corporate Debtor. The IT assets will be given within 180 days from the Effective Date and the manner of process will be detailed on the website of the Corporate Debtor. Further, if any of the IT assets are left after completing the distribution to the workmen in the manner described above, then the SRA will give such remaining assets to each employee, one IT equip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly earmarked for employees and workmen will be given to the AFCs. The proposal with respect to ticket credits, equity stake in AGSL and handover of IT assets shall revert to the Corporate Debtor and no other creditor will be entitled to it. After expiry of 30 days from the Approval Date or upon non-receipt of necessary approvals, the SRA shall have the discretion to deal with its equity stake in AGSL in the manner deemed appropriate by it without causing any prejudice to implementation of the Resolution Plan. b. The SRA proposes to pay a fixed sum of Rs.. 52 Crores to the Workmen / Employees towards settlement of all the claims made by them, including to the Authorized Representatives of Employees and Workmen (Admitted Workmen and Employees dues). The said payment is also being made in priority to the payment to the financial creditors. It is submitted that in any case, if the liquidation value due to admitted Workmen and Employees dues is not 'NIL', then the SRA undertakes that the liquidation value due to such Admitted Workmen and Employees dues shall be paid and shall be paid in priority over payment to financial creditors within 175 days from the Effective Date. It is furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated by the SRA that the net worth of the Corporate Debtor would be insufficient to cover even the debts of the Financial Creditors in full. Therefore, the liquidation value due to the Operational Creditors including government dues, taxes or the other creditors or stakeholders (including dues to employee other than workmen), is presumed to be NIL. Further, in any case, if the liquidation value due to the Operational Creditors is not NIL, then the SRA undertakes that the liquidation value due to the Operational Creditors shall be paid and shall be given priority in payment over the Financial Creditors, within 175 days from the Effective Date. It is also stated that in case the liquidation value is not NIL, then such additional amounts shall be first paid out of the positive bank balance of the Corporate Debtor as on the Effective Date and the remaining amounts shall be paid out of the amounts reserved for AFCs of the Corporate Debtor on a pro rata basis. b. Cash Payment - Though, the liquidation value due to the Operational Creditors (excluding Workmen and Employees) of the Corporate Debtor is presumed to be NIL, the SRA proposes to pay a fixed sum of Rs.. 15,000/- to each of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be liquidated, the amount that would have been payable for all of these claims would have been NIL. In the estimate of the SRA, the liquidation value that is payable to the Government Agencies is also NIL. However, the SRA has earmarked Rs. 10,000/- for creditors (other than financial and operational creditors). VII. Treatment of existing shareholders other than public shareholders: The SRA proposes to pay a fixed sum of Rs.. 10,000/- to the existing shareholders of the Corporate Debtor other than public shareholders (i.e., the existing promoters, Etihad and financial institutions holding shares in the Corporate Debtor). VIII. Treatment of existing public shareholders: The SRA clarified that, for every 100 existing shares held by the public shareholders, they will be entitled to 1 (one) share in Jet 2.0, post the re-constitution of share capital as per clause 7.4.3(a) of the resolution plan. IX. Treatment of Airport and Parking Dues: The Airport and Parking Dues are estimated at Rs.. 240 Crores as on 31.08.2020. It is submitted by SRA in the resolution plan that one floor owned by the Corporate Debtor in BKC, Mumbai (BKC Property) has been kept outside the purvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AFCs (over and above Rs.. 245 Crores) will be made after deducting the following amounts: - all costs associated in facilitating such sale including valuation and brokerage, - stamp duty, - statutory charges, and - all applicable taxes. 2. BKC Property not part of resolution - It is stated that if the CoC decides to retain the BKC Property as a non-core asset and not offer it as part of this resolution process as proposed above, then the SRA will not pay the upfront sum of Rs.. 10 Crores to the AFCs as envisaged in the above clause for BKC Property. Further, the airport dues and parking charges after the ICD (approx. Rs.. 240 Crores as of 31.08.2020) will be paid by the SRA upfront in priority over any other payments to the creditors of the Corporate Debtor, subject to a maximum of Rs..475 Crores. 3. It is further confirmed by the SRA that the proposal for resolution of outstanding airport and parking dues (approx. Rs.. 240 Crores) which deals with the appropriation of the BKC Property is merely a proposal and not a condition to the implementation of this Resolution Plan. E. RE-CONSTITUTION OF THE SHARE CAPITAL: a. Cancellation of Shares: It is stated that the equity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor. An indicative table below, sets up the proposed shareholding pattern for the SRA and the Financial Creditors, assuming no exit from the Public Shareholders: Nature of Issuance Shareholders No. of Shares Share Capital Incl. Premium Face Value Premium Shareholding (%) Fresh Issuance RA 12,00,00,000 600,00,00,000 10 40 89.79 Conversion of Debt Assenting FCs 1,26,96,644 63,48,32,188 10 40 9.50 Conversion of Dues Workmen & Employees 6,68,244 3,34,12,220 10 40 0.50 Existing Shares Public Shareholders 2,83,993 28,39,935 10 0.21 Total 13,36,48,882 667,10,84,343 100.00 e. It was clarified by the SRA that the above steps are sequential in nature and shows the steps for capital restructuring that shall be undertaken. It was further clarified that, as evident from the tables provided in para 'E(c) & E(d)' above, the restructuring also contemplates a further consolidation of public shareholding from 28,39,935 shares to 2,83,993 shares and consequent restructuring of capital. This reflects the SRA's proposal for public shareholders that for every 100 shares held by the public shareholders, they will be entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Effective Date* Z 11. Infusion of Rs.. 350 Crores in the Corporate Debtor Z + 150 12. Setting up the Contingency Fund Z + 170 13. Cancellation of Shares (excluding Public Shares) Z + 170 14. Reconstitution of Share Capital as per Clause 7.4.2 Z + 170 15. Steps towards issuance of equity shares as per Clause 7.4.3 Z + 170 16. Payment of CIRP Costs as per Clause 6.4.1. Z + 170 17. Payment to the Operational Creditors (Workmen and Employees, including Authorized Representatives of Workmen and Employees) Z + 175 18. Payment to all the Operational Creditor (other than Workmen and Employees) Z + 175 19. Payment to Other Creditors and Stakeholders Z + 175 20. Payment to Dissenting Financing Creditors Z + 176 21. 1st Tranche payment to Financial Creditors Z + 180 22. Monitoring Committee to be released and Reconstituted Board of Directors to take over the management of the Corporate Debtor. Z + 180 23. Closing Date Z + 180 24. Redemption of Series B, Series C; and Series D ZCBs Z + 365 25. Necessary Statutory approvals Y + 365 (in accordance with Sec 31(4) of the Code) 26. Redemption of Series A ZCB Z + 730 27. Release of charge (if any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... THE CODE AND THE REGULATIONS: The Applicant has conducted a thorough compliance check of the Resolution Plan in terms of the Code as well as Regulations 38 and 39 of the Regulations and has submitted his Form H under Regulation 39(4). The Plan is in compliance with the provisions of the Code and the Regulations. 6. The Applicant submits that the Resolution Plan meets the requirement of Section 30(1) & (2) of the Code and it is in compliance of Regulation 38 of the Regulations in terms of Section 30(2)(f) of the Code as under: a) Provides a representation that the SRA is not disqualified from submitting a resolution plan under Section 29A and other provisions of the Code and any other Applicable Law (clause 2.6 read with 6.2 and 9.10) [Section 30(1)]. b) Provides for the payment of insolvency resolution process cost in a manner specified by the Board, in priority to the payment of other debts of the corporate debtor (clause 6.4.1) [Section 30(2)(a)]. c) Provides for the payment of debts of operational creditors in such manner as prescribed by the board (clause 6.4.2 read with clause 6.4.3) [Section 30(2)(b)]. d) Provides for the management of the affairs of the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution Applicant's capability to implement the plan (clause 6.4.10 read with 6.5, Appendix 12 and Appendix 13) [Regulation 38(3)(e)]. 7. Approvals, Waivers and Extinguishments: The SRA has sought various approvals, waivers and extinguishments from this Tribunal as more particularly specified in clause 10 of the resolution plan, which are in the nature of automatic approvals and reliefs from various government authorities, statutory guidelines, licenses, contractual rights and benefits, tax and stamp duty exemptions, business and government contracts, cancellation of shares and reconstitution of share capital, demerger, etc. 8. Prayer for approval of reinstatement of slots (including bilateral rights and traffic rights): a. The SRA has sought appropriate directions to Director General of Civil Aviation (DGCA) and Ministry of Civil Aviation, Government of India (MoCA) for reinstatement of slots (including bilateral rights and traffic rights) to the Corporate Debtor and the International Traffic Rights Clearance since temporarily suspended, upon its revival, to enable the Corporate Debtor to effectively resume its business and operational activities in the manner prior to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al during CIRP Proceedings, be it seen that the Telecom Licences and right to use spectrum being assets of the Corporate Debtor are covered under moratorium slapped under Section 14 of the I&B Code as a sequel to the admission of an application seeking triggering of the CIRP. Explanation to Section 14(1) and sub-section (2A) introduced in Section 14 (inserted by Amending Act 1 of 2020 w.e.f 28.12.2019), in clear and unambiguous terms provide that the licences and concessions issued by the Government Authorities cannot be terminated or suspended during CIRP so long as the current dues were being paid, which has the object of ensuring maintenance of the substratum of the business during the CIRP period and keeping the Corporate Debtor as a going concern. The protection has been granted to telecom licences and right to use spectrum being assets of the Corporate Debtor and the slapping of moratorium prohibits the Owner/Lessor during CIRP period from recovering property occupied or possessed by the Corporate Debtor. This protection is only limited to moratorium period and obtains only on the condition of there being no default in payment of current dues." 11. The Hon'ble Appellate Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idelines for Slot Allocation (May 2013) (the guidelines) issued by the MoCA. The relevant extracts may be reproduced below. I) Definitions "SLOT" is a permission given by a coordinator for a planned operation to use the full range of airport infrastructure necessary to arrive or depart at a Level three airport on a specific date and time. Classification of Airports: For the purpose of slot allocation, airports are generally categorized according to the following levels of congestion: a) Level 1: where the capacity of the airport infrastructure is generally adequate to meet the demands of airport users at all times. b) Level 2: where there is potential for congestion during some periods of the day, week, or season which can be resolved by voluntary cooperation between airlines c) Level 3: where capacity is constrained due to lack of sufficient infrastructure. II) Introduction 1. With the increase in air traffic at the major airports in the country, the capacity of these airports has become constrained. Therefore, to ensure the most efficient use of airport infrastructure and in order to maximize benefits to the greatest number of airport users, it is esse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability of operations of the airlines. III) Practice in India: A historical perspective 1. ...... ...... 2. Recommendations of the Task Force: ...... The recommendations of the Task Force where accepted by the Government in the Year 2005 subject to the following: (i) ...... (ii) For grandfather rights a standard slot adherence 80% of allotted slots must be followed. (iii) ...... (iv) After allocation is historic slots, 50% of the remaining slots will be allocated to the new airlines and the remaining to the existing airlines. In case the demand from the new airlines is not there to the extent of 50% then the balance slot can be allocated to the existing airlines. ...... VI) Historicity 1. 'Use it or Lose It' Rule: Historic precedence is only granted for a series of slots if the airline can demonstrate to the satisfaction of the coordinators that the series was operated at least 80% of the time during the period allocated in the previous equivalent season. Coordinators should provide timely feedback to the airlines about flights at risk of failing to meet the maximum 80% usage requirement during the season to allow to take appropriate action. 2. Eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 hours, then the slot may be allocated to another airline. ...... Slot Allocation Priorities: ...... 16. The criteria for allocation of slots available in the slot pool to various airlines should be as under: i) New Entrants: an airline requesting a series of slots at an airport on any day where, if the airlines request were accepted, it would hold fewer than 5 slots at that airport on that day. a) Only airlines are eligible for new entrant status. b) 50% of the slots contained in the pool at initial slot allocation must be allocated to new entrants unless; requests by new entrants are less than 50%. ...... (iii) Amendments: After the publication of the final slot allocation plan by the respective airport operators no amendments would be made, except ad hoc amendments due to weather / technical reasons (attributable to airport operator)/operating restrictions (like watch hours/sunset restrictions etc.) may be considered. ...... VIII) Slot Return and Historic Baseline 1. Airlines should only hold slots that they intend to operate or use. To ensure that scarce capacity is not wasted airlines must immediately return any slots they know they will not use. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utlines the Aeronautical Circular 03 of 2017 pertaining to the matter are reproduced below for ready reference:- "3.4 If an Airline starts using the rights allocated to it initially but subsequently discontinues or curtails operations, it shall immediately inform the Ministry of Civil Aviation and DGCA about such discontinuance or curtail operation. If resumption is not planned within six months, or if it is planned but not effected within six months, the unutilized rights will be treated as surrendered and Ministry of Civil Aviation will be free to allocate them to other Airlines." 15. As the guidelines would indicate the allotment of slots is not automatic and needs to be sought by the Airline twice a year respectively for the summer and winter seasons. Once the slots are not used by particular Airline or vacated by it, the same is immediately allotted to another in order to optimize airport capacity. As already indicated a slot in a Level-3 Airport could not be left idle. The principle laid down in Aircel (supra) would accordingly be distinguishable on facts and cannot be applied to the case in hand. Though the slots are integral to the operation of an Airline, the same howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able and transparent manner a committee has been constituted by the Government comprising of DGCA and Joint Venture / Pvt. Airlines / Slot Co-ordinators. This Committee would be allocating slots on temporary basis for 3 months only. 5. The historic rights of Jet Airways, as per the provisions of the extant MoCA, Guidelines for slots allocations will be protected. These slots would be made available to Jet Airways as and when they revive their operations as per the extant guidelines". Further, in an answer to a question in the Rajya Sabha regarding slots vacated by the Corporate Debtor, the Hon'ble Minister of State in charge of the MoCA on 20.11.2019 indicated that the slots vacated by the Corporate Debtor in Delhi and Mumbai have been allotted to various other Airlines up to 28.03.2020 i.e. end of winter schedule purely on temporary basis. The slots have been extended with the direction that no historic rights or seasonal continuity rights of the Jet Airways slots can be claimed by the Airlines. The Hon'ble Minister in reply to a question in the Lok Sabha on 05.03.2020 stated that the slots falling vacant due to sudden closure of the operation by the Corporate Debtor have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entity / company that would take it over would inherit what the Air India presently has. It can have no claim over what Air India, or for that matter any entity, does not have dominion over. The analogy could not be extended to the Corporate Debtor, in as much as the Corporate Debtor had been divested of these slots w.e.f. 17.04.2019 when it ceased operations and was not operating / using them on the date of the insolvency commencement. 23. The allotment and operations of slots also has international ramifications. The SRA submitted that but for the insolvency commencement the Corporate Debtor would have satisfied its eligibility in operating during the winter schedule. But as already noticed the Corporate Debtor had ceased its operation much prior to the insolvency commencement date and on the date of insolvency commencement it did not have any slots operating in its favour. Viewed from any perspective the slots cannot be allocated to the Corporate Debtor beyond the procedure prescribed under the guidelines. Therefore, the claim of historicity advanced by the Corporate Debtor / SRA cannot be made available to it. Despite the temporary allotment of slots to the other Airlines, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot have been protected as in order to gain historicity the Airline had to utilise more than 80% of the allocation. Moreover, the principle would only apply to the slots in the following season and successive seasons. The same could not be applied to the Airline operating after a hiatus of two years. The intervening insolvency would not be a saving factor. Therefore, the submission made by the learned senior counsel cannot be accepted. 27. Considering the peculiar nature of slots allotment and its usage, the principle of slots allotment could not come within the commercial wisdom of the CoC. As already held the slots being not assets of the Corporate Debtor, the CoC's decision on protection of historicity would not be of any help to the Corporate Debtor. 28. With reference to Section 14(1)(d) of the Code the learned senior counsel appearing for the Union of India relied upon the principle enunciated by the Hon'ble Apex Court in Rajendra K. Bhutta v. Maharashtra Housing and Area Development Authority & Anr.: (2020) 13 SCC 208, and submitted that the Corporate Debtor was not in possession of the slots on the date of the insolvency commencement. It accordingly cannot claim any right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would mean or be synonymous with being in actual physical possession of or being actually used by, in contradistinction to the expression "possession", which would connote possession being either constructive or actual and which, in turn, would include legally being in possession, though factually not being in physical possession." 31. In any view of the matter the principles laid down in Rajendra K. Bhuta would not be made applicable nor section 14(1)(d) of the Code would have relevance as far as the allocations of slots to the Corporate Debtor is concerned. The provision would accordingly have no application in the case at hand. 32. The success of the Resolution Plan and its implementation is contingent upon certain future events as provided under Clause 7.6 of the Resolution Plan (pdf 275-276 of the Application). Since the revival of the Corporate Debtor is dependent upon these factors, the CoC has approved the Resolution Plan taking into consideration the necessity of the conditions which are integral to the successful implementation of the Plan. Thus, the effective date also depends upon the conditions being fulfilled. Despite the effective date being uncertain the CoC has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudicial to their interest. Besides considering the various conditions precedent there is possibility that the SRA would not be in a position to commence flight operations within 30 days of the 180th day of the effective date. The same was also discussed during the hearing and the SRA as well as the Applicant had agreed to extend the window to one year from the stipulated 30 days. Similar concessions would also apply to the employees / workmen who would be given future credits for one year in place of 30 days in flying with the Corporate Debtor. 35. The Resolution Plan doesn't take into account the dues of the employees and workmen during the CIRP period in view of the fact that except for 50 employees retained as 'Asset Preservation Team' of the Corporate Debtor none of the other employees or workmen were under the employment of the Corporate Debtor nor did they work for the Corporate Debtor during that period. Decision in that regard appears to be reasonable based on the principle of 'no work no pay'. 36. 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 O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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, the parameters of such review having been clearly laid down in K. Sashidhar (supra)." 40. We do not consider preceding observations made by us violate the import of the principles laid down by Hon'ble Apex Court (supra). These have rather been made to safeguard the interest of the stakeholders and to ensure proper and successful implementation of the Resolution Plan. 41. In view of the discussions and the law thus settled, the instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37 and 38 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 and subject to the observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ications 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. h. The DGCA and the MoCA shall consider the Application / Representation of the Corporate Debtor for renewal / grant of Airport Operating Permit with due despatch. The appropriate Authority shall consider the allocation of slots to the Corporate Debtor in terms of the observation made at Para 24 & 25 supra. i. 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. j. Henceforth, no erstwhile creditors of the Corporate Debtor can claim anything other than the liabilities taken over by the Resolution Applicant. k. The moratorium under Section 14 of the Code shall cease to have effect from this date. l. The Monitoring Committee shall supervise the implementation of the Resolution Pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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