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TMI Blog2021 (12) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... ame up for hearing on 27.09.2021 when the Applicant/RP was directed to file proper Memo of Parties. In compliance of the said order dated 27.09.2021, the Applicant/RP filed the proper Memo of parties on 30.09.2021. This application was thereafter heard and reserved for orders on 20.10.2021. 1.4. The underlying Company Petition being CP (IB) No. 458/ALD/2019 was filed by Siemens Financial Services Private Limited against the Corporate Debtor under section 7 of the Code which was admitted into Corporate Insolvency Resolution Process ("CIRP") by an order dated 03.09.2020. During the pendency of the section 7 petition, an application in IA 148/2020 was filed for substituting the name of the Financial Creditor with that of Alchemist Asset Reconstruction Company Limited, as the assignee. This was also allowed vide order dated 03.09.2020 1.5. Mr. Devendra Singh was appointed as the Interim Resolution Professional ("IRP"), and the Committee of Creditors ("CoC") in its meeting held on 03.10.2020, confirmed the appointment of Mr. Devendra Singh [IBBI/IPA-002/IP-N00001/2016-17/10001] as the Resolution Professional ("RP") with 100% voting. 2. IBC compliances 2.1. The Applicant submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Applicant to place the proposal before the CoC. Accordingly, the proposal was placed before the CoC at its 4th meeting held on 15.12.2020, the CoC rejected the same. 2.7. After the Applicant received confidentiality undertaking from the eligible prospective Resolution Applicants on 24.12.2020, the Applicant issued the final list of eligible prospective Resolution Applicants. However, the Applicant received the plan only from one Resolution Applicant, i.e., City Hospital. 2.8. A copy of the Compliance Certificate dated 20.02.2021 in Form H as required by regulation 39(4) of CIRP Regulations is also filed by the Applicant. Page 450 of the Application Evaluation and voting 2.9. The CoC also enquired from the Resolution Applicant if there is any chance of any revision or improvement in the resolution bid amount for the Financial Creditors. The Resolution Applicant submitted that as the equipment and instruments of the Corporate Debtor are obsolete and are required to be replaced, it would be difficult for them to revise or improve the bid. 2.10. On 03.02.2021, the Plan was placed for e-voting and the same was concluded on 08.02.2021. The Plan was approved by 100% voting of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paid in priority over financial creditors who voted in favour of the Plan. NA, as there is only one Financial Creditor. 38(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. Chapter VI, Page 92 of the Application. 38(1B) A resolution plan shall include a statement giving details of 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. Chapter VI, Page 102 of the Application. 38(2) A resolution plan shall provide: (a) the term of the plan and its implementation schedule; Chapter VI, Page 103 of the Application. (b) the management and control of the business of the corporate debtor during its term; and Chapter VI, Page 105 of the Application. (c) Adequate means for supervising its implementation Chapter VI, Page 106 of the Application. 38(3) A resolution plan shall demonstrate that- (a) it addresses the cause of default; Chapter VI, Page 107 of the Application. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating Authority. Page 84 of the Application The Resolution Professional states that the 100% CoC member (AARC) had voted in favour of the Plan and has accepted this proposal in the sixth CoC Meeting. 6. Details on Management/Implementation and Relief as per the Resolution Plan-Salient Features 6.1. The Resolution Plan also provides for- a. The Resolution Applicant together with its nominees shall hold 100.00% shareholding in the restructured Share Capital of Corporate Debtor after resolution Page 87 of the Application, Page 110 & 111 of the Application (Clause (c)(i) at internal page No. 59 of the plan); b. Management of Company after resolution (Clause (c)(ii) at internal page No. 59 of the plan); c. Term of the Resolution Plan Page 87 of the Application (Phase 1 and Phase 2 at internal page No. 59 of the plan); d. Implementation and Supervision of the resolution plan Page 89 - 90 of the Application. (Clause (d)(i) at internal page No. 61 & 62 of the plan). 7. Waivers, Reliefs and Exemptions 7.1. The reliefs and concessions sought by the Resolution Applicant from the Adjudicating Authority are set out below for the successful implementation of the Resolution Plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. The provisions of section 32A of the IBC will also apply. Therefore, the reliefs sought for are granted, in terms of the judgment of the Hon'ble Supreme Court in so far as extinguishment of liabilities that are not part of the resolution plan. (b) The Central Board of Direct Taxes not to take any other actions with respect to the transactions contemplated under this Plan under Section 281 of the IT Act. In Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. decided on 13.04.2021 the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. The provisions of section 32A of the IBC will also apply. Therefore, the reliefs sought for are granted, in terms of the judgment of the Hon'ble Supreme Court in so far as extinguishment of liabilities that are not part of the resolution plan. (c) Any approvals that may be required from Govt Authorities (including tax authorities) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uture in relation to any period prior to the Effective Date, or arising on account of implementation of this Resolution Plan shall stand settled/waived off/withdrawn/dismissed and all liabilities and obligations therefore, whether or not set out in the balance sheets of Corporate Debtor or the profit and loss account statements of Corporate Debtor will be deemed to have been written off fully, and permanently extinguished and no adverse orders passed in the said matters would apply to CD or the Resolution Applicant. Upon approval of this Resolution Plan, all new inquiries, investigations, notices, suits, claims, disputes, litigations, arbitrations or other judicial, regulatory or administrative proceedings will be deemed to be barred and will not be initiated or admitted against Corporate Debtor and/or the Resolution Applicant in relation to any period prior to the Effective Date In Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. decided on 13.04.2021 the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te by All or any one of the applicable Statutory/Government Authority (s) for the time being in force for ensuring the economic viability and financial sustainability of the business of Corporate Debtor. This shall be in terms of section 32A of the Code. (d) Since the Resolution Applicant has been provided with limited information in relation to the Business Permits, Service Licences and their current status, it is probable that some of the Business Permits, licences of the Corporate Debtor may have lapsed, expired, suspended, cancelled, revoked or terminated or the Corporate Debtor has Non-Compliances in relation thereto. Accordingly, all Government Authorities to provide reasonable time period after the Effective Date in order for the Resolution Applicant to assess the status of these Business Permits and ensure that the Corporate Debtor is compliant with the terms of such Business Permits and Applicable Law without initiating any investigations, actions or proceedings in relation to such Non-Compliances and permit the Resolution Applicant to continue to operate and financially revive the business of the Corporate Debtor It is for the Resolution Applicant to due its due dilig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the extinguishment of claims and entitlements as follows:- Sl. No. Extinguishment of Claims/Entitlements Orders thereon 1. The Resolution Professional issued a notice inviting all potential claimants to submit their proof of claim. This was published in newspapers in accordance with Applicable Law. All other liabilities of Corporate Debtor (to the extent not specified and/or dealt with in this Chapter or any other Chapter of this Resolution Plan), including but not limited to contingent liabilities, taxes, statutory liabilities, customer and any patients claims, service provider claims, duties, responsibilities and all other obligations of any nature whatsoever and all dues payable to the other creditors, including any claims or demands or liabilities in connection with or against Corporate Debtor, whether under Applicable Law, equity or contract, whether admitted or not, due or contingent, crystallised or uncrystallised, known or unknown, secured or unsecured, disputed or undisputed, present or future, whether or not set out in the Information Memorandum, the balance sheet or the books of accounts of Corporate Debtor, in relation to any period prior to the Effective Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um of Corporate Debtor except for the other collaterals, the Corporate Guarantee or the Personal Guarantees given by the erstwhile directors/suspended board/any other person Granted. 4. All corporate guarantees, indemnities, letters of comfort, undertakings (including as listed below) provided by Corporate Debtor, in respect of any third-party liability (including of Subsidiaries) till the Effective Date pursuant to approval of the Resolution Plan by the by the Adjudicating Authority shall stand settled/waived/written off/extinguished with respect to the Corporate Debtor/Resolution Applicant Granted. 5. All existing and future claims by Corporate Debtor and all its existing and future rights, entitlement, etc. with Government Authorities or any other Person (including third parties) shall not be affected and shall remain enforceable after the Effective Date. Nothing in this Resolution Plan shall be deemed to affect the rights of Corporate Debtor and/or the RA to recover from and/or asset claims or rights against any Person and there shall be no set off of any such amounts recoverable by Corporate Debtor or any liability of third party towards Corporate Debtor extinguished pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors/any other creditors/Government/Statutory Authorities to enforce any rights or claims against Corporate Debtor/Resolution Applicant shall stand immediately, irrevocable and unconditionally withdrawn, abated, settled, written off and/or extinguished in respect of the period prior to the Effective Date, and all such claims shall immediately, irrevocable and unconditionally stand settled/waived/written off/extinguished with respect to the Corporate Debtor/Resolution Applicant. In Ghanshyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. decided on 13.04.2021 the Hon'ble Supreme Court held in para 95(i) that once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan. This is binding law under Article 141 of the Constitution. 10. As per the IM and other information provided by the Resolution Professional, there are few pending litigations as on ICD. Resolution Applicant shall not be liable for any payment against any such liability arising out of such litigations and any other similar liabilities including Liabilities on account of Bank Guarantees, indemnity bond, promissor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord our approval to the Resolution Plan. The Resolution Plan shall form part of this Order. 9.2. As far as the question of granting time to comply with the statutory obligations or seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code. 9.3. Any relief sought in the Resolution Plan, where any contract, agreement, understanding, proceeding, action, notice etc. not specifically identified, or is for a future contingency, is, at this point of time, rejected. 9.4. The Resolution Plan as approved is binding on the Corporate Debtor and other stakeholders involved so that the revival of the Corporate Debtor can come into force with immediate effect. 9.5. The Moratorium imposed under section 14 shall cease to have effect from the date of this order. 9.6. The Resolution Professional shall stand discharged from his duties with effect from the date of this Order. However, he shall perform his duties in terms of the Resolution Plan as approved by this Adjudicating Authority. 9.7. The Resolution Professional is further directed to handover all records, and properties t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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