TMI Blog2022 (2) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under section 14 of IBC, 2016 shall not have any effect henceforth. In case of non-compliance of this order or withdrawal of Resolution Plan, the performance guarantee amount already paid by the Resolution Applicant shall stand forfeited, in addition to the Resolution Applicant being liable for any other action as per law. Application allowed. - IA(IBC)/460/CHE/2021 in IBA/ 1099/2019, INV.P/6(CHE)/2021 in IBA/1099/2019, INV.P/7(CHE)/2021 in IBA/1099/2019, INV.P/11(CHE)/2021 in IBA/1099/2019, INV.P/13(CHE)/2021 in IBA/1099/2019, INV.P/14(CHE)/2021 in IBA/1099/2019 - - - Dated:- 1-2-2022 - JUSTICE (RETD.) S. RAMATHILAGAM, MEMBER (JUDICIAL) AND ANIL KUMAR B, MEMBER (TECHNICAL) Learned Counsels argued in Favour of Resolution Plan : P.H. Arvindh Pandian, Senior Advocate For A.G. Sathyanarayana, Advocate (For Resolution Professional) S.R. Rajagopal, Senior Advocate Arvind Srevatsa, Advocate (For Resolution Applicant) M.S. Krishnan, Senior Advocate For Vipin Warrier, Advocate (For Committee of Creditors) Learned Counsels objectin Resolution Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the Corporate Debtor. The same will be dealt with later in the order. 2.6. Inv.14/IB/CHE/2021 filed by the Applicant namely Gazala claims to be an Operational Creditor who has duly filed his claim for a sum of Rs.31,44,117/- and has raised several objections to the Resolution Plan. The same will be dealt with later in the order. Apart from the above, there are certain objections being filed directly in the Resolution Plan in IA/460/IB/CHE/2021. 3. BRIEF FACTS OF CIRP 3.1. In the application filed by one of the Operational Creditor viz. Sarangs Heavy Lift India Private Limited under Section 9 of IBC, 2016, this Tribunal vide its order dated 09.12.2019 initiated the Corporate Insolvency and Resolution Process (CIRP) as Against the Corporate Debtor and appointed the Applicant herein, as Interim Resolution Professional (IRP). 3.2. Pursuant thereto, the Applicant has caused public announcement in Form A as per Regulations 12 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 in two newspapers, one in English ( Times of India ) and another in Tamil ( The Hindu ) on 15.12.2019 and also in Andhra Prabha (Telugu) daily on 16.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later stage. 3.5. In view of the same, the Applicant reconstituted the CoC and accordingly filed a report before this Tribunal on 05.03.2020. Thereafter, in the CoC meeting held on 06.03.2020, the CoC with 92.51% voting rights appointed the Applicant herein to be the Resolution Professional in respect of the Corporate Debtor and in the said meeting the CoC has also approved the eligibility criteria to be set for the prospective Resolution Applicants (PRA), which is a follows: a) Rs.50Crore net worth for the body corporate b) Refundable deposit of Rs.1 Crore under Section 22(2) (h) of IBC, 2016. 3.6. In pursuance thereof, the Applicant herein issued Form-G i.e., Expression of Interest (EOI) for inviting the prospective Resolution Applicant to submit the Resolution Plan in respect of the Corporate Debtor and the said Form-G was also published in Business Standard (English) and Dina Mani (Tamil) on 12.03.2021. However, after the issuance of Form G, it is seen that the nationwide lock down was imposed on account of Covid-19 pandemic and hence the PRAs requested for the further time to submit the Expression of Interest and accordingly the CoC has approved the last date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f time for the submission of the resolution plan and the CoC accordingly extended the time till 15.10.2020. 3.10. It was submitted that the prospective Resolution Applicants have submitted their Resolution Plan to the Applicant on 10.10.2020 and 11.10.2020 and the Applicant after verifying the same has forwarded the same to the members of the CoC. Further, in the gt CoC meeting which was held on 22.10.2020, the representatives of the prospective Resolution Applicants were allowed to present their respective Resolution Plans before the CoC separately. However, it was submitted that one of the prospective Resolution Applicant namely CFM Asset Reconstruction Company who participated in the CoC meeting withdrew their participation in the bidding process in view of the RBI notification passed on the Asset Reconstruction company during the CIRP. 3.11. It was submitted that the CoC members have expressed that there should be a substantial improvement in the offer of the Resolution Plan submitted by the prospective Resolution Applicant since the proposed amount is very low and accordingly the Core Committee after several negotiations with the prospective Resolution Applicants has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rores to the Financial Creditors and the same shall be distributed as per the voting rights of CoC and issue and allotment of lender equity share to the Financial Creditors to Rs.75 Lakhs (15% of equity of Rs.500 lakhs) as per their voting rights. Rs.271.40 lakhs for employee creditors Rs.186.40 Lakhs for workmen creditors Rs.25.95 Lakhs for statutory creditor Rs.176.91 Lakhs for the operational creditors Totally Rs.166,60,66,000/- (One Hundred and Sixty-Six Crores Sixty Lakhs Sixty-Six Thousand only) proposed to the stake holders. 4.2. Terms of Payment: 1st Tranche INR 65 Cr. shall be payable within 30 days of NCLT approval of resolution plan (or Transfer date) and Remaining amount shall be payable within 60 days of 15 Tranche (or Transfer date) The resolution applicant proposes to pay 12.25% to the financial creditors on the admitted amount to the secured financial creditors and 100% to EPFO, 100% to the Workmen, 0.39% to Operational Creditors. The Resolution Applicant proposes to pay 12.25% to the financial creditors on the admitted amount to the secured financial creditors. Further to that the summary of the Resolution Plan proposed in the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he WEGs through the Know How License Technical Assistance Agreement dated 05.11.2007 entered between Regen Renewable Energy Generation Global Ltd., Cyprus (Foreign WoS of RPPL) and Vensys Energy AG, Saarbruecken (Germany) and subsequently sub-licensed to RPPL as noted in the Know How Sub-License Technical Assistance Agreement dated 20.11.2007, Know How License Technical Assistance Agreement dated 21.03.2011 entered between Vensys Energy AG, Saarbruecken (Germany) and RPPL, Tripartite Deed of Assignment dated 06.03.2015 executed between Regen Renewable Energy Generation Global Ltd., Cyprus (Foreign WoS of RPPL), Vensys Energy AG, Saarbruecken (Germany) and RPPL and Know How License Technical Assistance Agreement dated 17.09.2015 entered between Vensys Energy AG, Saarbruecken (Germany) and RPPL. Thereafter, RPPL had permitted RISPL to carry out its business of Operation and Maintenance which is also covered under the License from Vensys Energy AG, Saarbruecken (Germany). 5.1.5 That the business of both Holding Company RPPL and Subsidiary Company RISPL are intertwined and inter-connected. In view of the commencement of CIRP against both the Holding Company RPPL and Subsidia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of RISPL, its Stakeholders and Third-Party Public Customers. The following reasons would make it vividly clear that the proposed Resolution Plan if approved, would result in more complications than Resolution, for the following reasons:- a) Business connection of RISPL to RPPL is inseparable. b) The main object of RPPL is to carry on the business of manufacturing WEGs. RPPL incorporated RISPL as its Subsidiary to carry out major activities like procurement of land, installation of WEGs manufactured by RPPL, commissioning of WEGs manufactured by RPPL, rendering Operation and Maintenance services and Settingup of Pooling Substations for evacuation of Power to the Grids. In short, RISPL isrequired to operate and maintain the WEGs manufactured and supplied by RPPL and to provide incidental and ancillary services. 5.1.12. That the O M services provided by RISPL is governed by the various Know-how License and Technical Assistance Agreements dated from 2007 to 2015 for different models of WEGs with Power Variants, entered with Vensys Energy AG, Saarbruecken (Germany). Therefore, the Standalone Resolution Plan of PRA seeks to snatch the right of RISPL to carry on its O M bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd wind up the Subsidiaries of RPPL as the Proposed Resolution Plan adopts the principles of fresh slate policy. In other words, the Proposed Resolution Plan intends to wipe away any liability, claims or obligations relating to its Subsidiaries such as RISPL, which were in existence prior to the Transfer Date and also covers any undertaking, indemnity or guarantee issued by RPPL to the customers of RISPL. 5.1.18. That RISPL has taken on lease vast tracks of lands from RPPL and the Proposed Resolution Plan intends to dilute the lease and take over the available infrastructure which are prevailing on the leased lands which is nothing but a back door entry to snatch away the infrastructure of RISPL which is detrimental to all interested stake holders of RISPL 5.1.19. That the Resolution Plan of the Holding Company is therefore unreasonable, arbitrary, fanciful, capricious and oppressive. In addition to the above, the Resolution plan depletes the value of the assets rather than increasing the value of assets in the interest of all Stakeholders which is against the spirit of the Code. 5.2. OBJECTIONS RAISED BY CUSTOMERS OF RPPL 5.2.1 The Applicants claim to be one of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Wholly owned subsidiary / step down subsidiary are recorded in the Information Memorandum which was shared with the prospective Resolution Applicants to enable the submissions of an Appropriate Resolution Plan. 5.2.6 It was submitted that all the cash, accruals, profits earned during CIRP and all the book receivables till Approval of the Plan are intended for the benefit of the Resolution Applicant. Further, it was submitted that there is an unlimited accrual for which reason the Resolution Plan approved by the CoC clearly states the upper cap of amount receivable from the Resolution Applicant. 5.2.7 It was submitted that the Request for Resolution Plan (RFRP) should contain a clear clause about the treatment of Cash Accruals and Profits earned during the CIRP and the RP in the present case has failed in his duty and has freely allowed the Resolution Professional to take the assets earned during the CIRP. It was further submitted that it is very clear from the minutes of the CoC that the Corporate Debtor is earning profit of Rs.3 to 4 Crore every month and this is expected to continue in the future too and as such this Resolution Plan is prejudicial to the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and leaving them to fend on their own. It was submitted that the purpose of IBC, 2016 would be lost that if a proposed Resolution Plan rewrites a long-standing contractual obligation and alter them to suit a set of parties alone. 5.3.3. It was submitted that the Resolution Plan is contrary to the Code since it does not maximize the value of the group assets and it does not benefit the economy, rather hurts the other stakeholders and may possibly push each of those entities to a CIRP process. Further, it was submitted that the Resolution plan fails to account for functioning of the Corporate Debtor as a going concern, however treats the Resolution Process as a mode of acquisition and independent asset sale primarily of the intellectual property and of the immovable assets. 5.3.4 It was submitted that the contractual arrangement between the Objectors and the subsidiary of the Corporate Debtor are being overridden through the terms of the Resolution Plan and the Resolution Plan under the guise of streamlining its operations is severing all its contractual obligations: and guarantees which are effectively its primary obligations as a parent holding access all the technical kn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Professional has no legs to stand, since the Intervener has no locus - standi to question the Resolution Plan of RPPL. 6.2. It was submitted that the submission of the RP of RISPL that the nature of business of RPPL and RISPL are inseparable in nature and hence the Resolution Plan of RPPL should not be approved will no longer survives for consideration since the same issue was canvassed during the simultaneous / consolidated CIRP and the same has been rejected and in any even both RPPL and RISPL are separate entities and can carry on their business in their respective spheres. 6.3. It was submitted that the contention of the RP of RISPL that the approval of the Resolution Plan of RPPL will wipe out RISPL and in the alternative intends to wind up RISPL is false. In this context it was submitted that when RISPL is already under CIRP, the question of winding up Of RPPL would not arise. Further, it was contended that RPPL has no right or control over RISPL as all its rights as shareholder are frozen at the stage of initiation of CIRP and as such no rights of equity in RISPL are exercisable by RPPL. It was contended further that RP of RISPL has already received a Resolution Plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants have purchased the machines and also currently and will continue to have the same after the approval of the Resolution Plan, since exclusivity is not created or modified by the virtue of the Resolution Plan. Further it was submitted that the contention of the Applicant that only a person in whose name the Type Certificate is issued by MNRE for a model of Wind Energy Generator (WEG) is entitled to service is a misnomer, since the position under the Guideline is merely that only the person who has the Type Certificate is entitled to manufacture and supply the WEG and there is no such restriction under the MNRE Guidelines apply for service. 6.8. It was further submitted that even presently RISPL does not have any Type Certificate and yet it is servicing machines and similarly even third parties are servicing the machines and in such a position there is not even an iota of truth to claim that only RPPL can service the 1.5 MW WEG. In addition, it was submitted that the said issue is not even relevant since in any event the Resolution Applicant has undertaken to service the 1.5MW WEG on normal commercial terms for all the owners of such machines. Also it was submitted that the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is sought to be impeached on vague assertions claiming subsidiaries have lot of land without any details. It was submitted that it is a well settled principle that when one pleads fraud the onus of proof is on him and as such bland claims are to be rejected as nothing is adduced as proof. 6.12. It was submitted that the claims in respect of reliability of the COC minutes, impeach the integrity of the COC comprised of some of the largest and best banks in the country and who are the persons who have a stake of over Rs 1000 Crores vis-a-vis RPPL. An Operational Creditor who has a meagre claim when compared to that of COC, who have more than 1000 crores seeking to paint the COC as dishonest, cannot be countenanced and such allegations are all made in thin air without any basis for the same. 6.13. It was submitted that the issues of dealing with the CIRP period accruals and the Workmen retrenchment cost are all part of the commercial evaluation of the plan. Further, it was submitted that the Workmen retrenchment was discussed only to reduce the fixed cost whereby fixed cost would come down and the same will not anyway increase CIRP cost. The Resolution Applicant in clause 5.5.9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the confirmation of the Resolution Plan under Section 31(1) of IBC, 2016. IN support of the said contention, reliance was placed upon the Judgment of the Hon ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited -Vs- Satish Kumar Gupta and Ors; (2020) 8 SCC 531 and Ebix Singapore Private Limited and Ors -Vs- Committee of Creditors of Educomp Solutions Limited and Ors; 2021 SCC Online SC 707. 7.5. Further, it was submitted that a Resolution Plan can provide for extinguishment of onerous contracts and as such a provision cannot amount to violation of Section 30(2)(e) of IBC, 2016 and in order to buttress the said argument, reliance was placed upon the Judgment of the Hon ble Supreme Court in the matter of P. Mohanraj and Ors. -Vs- Shah Brothers IspatPvt. Ltd.; (2021) 6 SCC 258. 7.6. It was submitted that the CoC has earnestly worked towards the resolution of the insolvency of the Corporate Debtor as is evidenced from the minutes of the meetings and also from the 12 CoC meeting it is seen that the CoC has clearly awarded marks on each of the parameters of the evaluation matrix. Further the CoC has filed an affidavit detailing the business tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of both RPPL and RISPL. Also these Applicants are not members of the CoC of either RPPL or RISPL. Thus, this Tribunal is of the considered view that except IA/548/CHE/2021, which is filed by the RP of RISPL, the other Applications filed by the custorners of either RPPL or RISPL seeking consolidation or simultaneous CIRP in relation to the Corporate Debtors are not maintainable. 5.9, Thus, a reading of Section 18(f)(v) of IBC, 2016 would manifest the fact that the Interim Resolution . Professional shall take control over the securities including shares held in any subsidiary of the Corporate Debtor. However, clause (b) to the Explanation to Section 18 of IBC, 2016 would state that the assets of the subsidiary of the Corporate Debtor would not form part of the assets of the holding Company. A similar corollary can be seen in Section 36(4) of IBC, 2016 wherein it is stated that shares held in any subsidiary of the Corporate Debtor would form part of the Liquidation Estate and that the assets of the subsidiary of the Corporate Debtor would not form part of the Liquidation Estate. Thus, it is made clear that IBC, 2016, treats the assets of the holding and subsidiary company indep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quity jurisdiction has been conferred upon this Tribunal. In relation to the UK and US law referred by the NCLT Mumbai Bench in Videocon Case (supra), wherein consolidation of CIRP is being ordered, is by exercising equity jurisdiction which is available under the US and UK Bankruptcy Law. The Indian parliament in its legislative wisdom has expressly and deliberately omitted to implant the concept of equitable Jurisdiction upon the Adjudicating Authority under IBC, 2016. 5.12. Further, the term equity which is conspicuous by its absence under the provisions of IBC, 2016 has been engrafted in the Indian Insolvency regime by way of judicial intervention by referring to the US and UK Bankruptcy Law, in which the equity jurisdiction has been embedded under the relevant US and UK Bankruptcy Code. Under the US Bankruptcy Code, the power to order for substantial consolidation emanates from Section 105(a) of the US Bankruptcy Code, which is as follows; U.S. Code 105 - Power of court (a) The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower exercisable by the resolution professional under Section 30(2) of the I B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with Section 31(1) of the I B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the I B Code, which is limited to matters other than enquiry into the autonomy or commercial wisdom of the dissenting financial creditors. Thus, the prescribed authorities (NCLT/NCLAT) have been endowed with limited jurisdiction as specified in the I B Code and not to act a sa court of equity or exercise plenary powers, (emphasis supplied) 5.15. Also, the Hon ble Supreme Court recently in the matter of Pratap Technocrats (P) Ltd. and Others -Vs- Monitoring Committee of Reliance Infratel Limited Anr; 2021 SCC OnLine SC 569, dealt with the equity jurisdiction of NCLT and NCLAT and has held as follows; 26. The resolution plan was approved by the CoC, in compliance with the provisions of the IBC. The jurisdiction of the Adjudicating Authority under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the requirements of the IBC have been fulfilled, the Adjudicating Authority and the Appellate Authority are duty bound to abide by the discipline of the statutory provisions. It needs no emphasis that neither the Adjudicating Authority nor the Appellate Authority have an unchartered jurisdiction in equity. The jurisdiction arises within and as a product of a statutory framework. (emphasis supplied) 5.16. Thus, the Hon ble Supreme Court has vociferously stated that this Adjudicating Authority (NCLT) and also the Appellate Authority (NCLAT) have not been empowered with equity jurisdiction under the provisions of IBC, 2016 and that there is no equitybased jurisdiction with the Adjudicating Authority, under the provisions of the IBC, 2016. Also, it is made Clear that, under the Indian insolvency regime, it appears that a conscious choice has been made by the legislature not to confer any independent equity-based Jurisdiction on the Adjudicating Authority. Further, an attempt was made by the Learned Senior Counsels arguing in favour of consolidation to state that these decisions were rendered on the issue of approval of Resolution Plan and hence the same cannot be applied to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s bare minimum and should not disturb the foundational principles of the IBC. This conscious shift in their role has been noted in the report of the Bankruptcy Law Reforms Committee (2015) in the following terms: An adjudicating authority ensures adherence to the process At all points, the adherence to the process and compliance with all applicable laws is controlled by the adjudicating authority. The adjudicating authority gives powers to the insolvency professional to take appropriate action against the directors and management of the entity, with recommendations from the creditors committee. All material actions and events during the process are recorded at the adjudicating authority. The = adjudicating authority can assess and penalise frivolous applications. The adjudicator hears allegations of violations and fraud while the process is on. The adjudicating authority will adjudicate on fraud, particularly during the process resolving bankruptcy. Appeals/actions against the behaviour of the insolvency professional are directed to the Regulator/Adjudicator. 104, Once again, we must clarify that our observations here are not on the merits of the issue, which has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtors would fetch a Resolution Plan during the period of consolidation. Also, as per the due process of law, the CIRP period in respect of RPPL came to an end on the day on which it has approved the Resolution Plan and at this point of time, it is not lawfully right under the provisions of IBC, 2016 to force RPPL (which has already fetched a Resolution Plan), to undergo another fresh round of CIRP. 5.21. It is also required to be noted at this stage, that one of the essential conditions which is required to be fulfilled for consolidation of CIRP is that the assets of a Corporate Debtor cannot be sold as a standalone unit and that only if consolidation is ordered, the same will maximize the assets of the Corporate Debtor. In the present case, it is seen that the Resolution Plan in respect of RPPL has already been placed before the CoC of RPPL way back in the year November 2020 itself and the CoC has voted in favour of the Resolution Plan in the month of April 2021. Further, it is significant to point out here that, only after the Resolution Plan has been voted by the CoC of RPPL, the Applicants, who are all customers of RISPL have moved the present Application seeking consolid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Financial Creditor has re-filed the claim before the IRP on 08.12.2020 and from the sequence of events, it is seen by that time, a total of 8 CoC meetings in respect of the Corporate Debtor has been concluded and also the eligibility criteria in respect of the Prospective Resolution Applicants was under discussion. Further, we are of the view that even though 90 days time period has been prescribed under the attendant Regulations for the RP to accept the claims of the Financial Creditor, the time period could be extended upto the period the RP prepares the Information Memorandum = and submits the same to the prospective Resolution Applicant. Once the said process is done, and the Information Memorandum is being given to the prospective Resolution Applicant, then no claims of the Financial Creditor can be accepted. In the present case, the Financial Creditor has resubmitted his claim only on 08.12.2020, and by that time, already the prospective Resolution Applicants have submitted their offer before the CoC and the CoC was under negotiations with the said prospective Resolution Applicants to increase their offer. Thus, it could be seen that a Financial Creditor cannot be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Professional has issued a Certificate and it is not necessary for this Authority to go into the same. However, this Authority is duty bound to examine the Resolution Plan within the contours of Section 30(2) of the IBC, 2016. A comparison vis-a-vis with the Mandatory compliance under the IBC and the Compliance made under the Resolution Plan is captured hereunder; MANDATORY COMPLIANCE UNDER IBC AND REGULATIONS COMPLIANCE UNDER RESOLUTION PLAN S. 30(1) - Resolution Applicant to submit an affidavit stating that he is eligible under Sec.29A of the Code, 2016 Appendix III A to the Resolution Plan titled IB Code Related undertaking by RA , S. 30(2)(a) - Payment of Insolvency and Resolution cost in the manner specified by the Board Clause 5.2.1 of the Resolution Plan provides payment of the CIRP costs in priority. S. 30(2)(b) - Payment of debts of Operational Creditors in such manner as may be specified by the Board, which shall not be less that the amount to be paid to the Operational Creditors in the event of a liquidation of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the capability of the Resolution Applicant to implement the Resolution Plan and Clause 5.6 of the Resolution Plan deals with the provisions for effective implementation. S. 30(2)(e) - Does not contravene any of the provisions of the law for the time being in force The Resolution Professional in Form H has confirmed that the Resolution Plan is not in contravention with the provisions of any Applicable Law. S. 30(4) - Committee of Creditors approve the Resolution Plan by not less than 66% of voting share of - Financial Creditors, after considering its feasibility, viability and such other requirement as specified by the Board The CoC, in its 13 meeting held on 03.04.2021 with a 94.08% voting share has approved the Resolution Plan. 9. The Resolution Applicant in the Resolution Plan has sought for certain Relief and concessions from this Adjudicating Authority so as to implement the Resolution Plan. These are ordered as follows; SL. No. RELIEF / CONCESSIONS SOUGHT FOR ORDERS THEREON 1 Contracts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the Corporate Debtor or the Resolution Applicant in respect of obligation or liabilities of the Corporate Debtor under the said assignment agreements. Granted, subject to the provisions of IBC, 2016 and other Applicable laws 3 Contract with National Aluminium Company Limited ( NALCO ):Post the Transfer Date the Corporate Debtor will complete and implement 15 (fifteen) MW (10 (ten) WEGs) out of the agreed 25.5 MW wind energy project at Kayathar site, Tuticorin in terms of the agreement dated October 13, 2017 executed with NALCO, subject to NALCO agreeing to the terms conditions as mentioned in 5.2.8 (c) of the resolution plan. Granted, subject to the provisions of IBC, 2016 and other Applicable laws 4 In the interest of survival of the Corporate Debtor and to continue maintaining the Corporate Debtor as a going concern, the Resolution Applicant proposes that except for the Retained Employees (as defined in the resolution plan) who have been identified based on the preliminary due diligence, all the other workmen and employees of the Corporate Debtor be terminated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternate tax and to utilize such amounts to set off future tax obligations. Granted 8 All consents, licenses, approvals, rights, entitlements, benefits and privileges whether under applicable law, contract, lease or license, granted in favour of the Corporate Debtor or to which the Corporate Debtor is entitled or accustomed to shall, notwithstanding that they may have already lapsed or expired due to any noncompliance or efflux of time, be deemed to continue without disruption for the benefit of the Corporate Debtor and the Resolution Applicant for a period of 12 months from the Approval Date (as defined in the resolution plan) or until the period mentioned in such licenses, consents or approvals, whichever is later. Granted, subject to the provisions of IBC, 2016 and other Applicable laws. 9 All right, title, interest and property in respect of intellectual property of the Corporate Debtor including trademarks, copyright in works, know- how, designs, patents and domain names shall remain with the Corporate Debtor. Granted, subject. to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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). 12. Further the Supreme Court in the matter of K. Sashidhar v. Indian Overseas Bank and Ors. (2019) 12 SCC 150 has lucidly delineated the scope and interference of the Adjudicating Authority in the process of approval of the Resolution Plan and held as follows; 55. Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolution plan as approved by the requisite per cent of voting share of financial creditors. Even in that enquiry, the grounds on which the adjudicating authority can reject the resolution plan is in reference to matters specified in Section 30(2), when the resolution plan does not conform to the stated requirements. Reverting to Section 30(2), the enquiry to be done is in respect of whether the resolution plan provides: (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Ors. (2020) 8 SCC 531 after referring to the decision in K. Sashidhar (supra) has held as follows; 73. There is no doubt whatsoever that the ultimate discretion of what to pay and how much to pay each class or sub-class of creditors is with the Committee of Creditors, but, the decision of such Committee must reflect the fact that it has taken into account maximising the value of the assets of the corporate debtor and the fact that it has adequately balanced the interests of all stakeholders including operational creditors. This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itations on judicial review have been duly underscored by this Court in the decisions above-referred, where it has been laid down in explicit terms that the powers of the Adjudicating Authority dealing with the resolution a do not extend to examine the correctness or otherwise of the commercial wisdom exercised by the CoC. The limited judicial review available to Adjudicating Authority lies within the four corners of Section 30(2) of the Code, which would essentially be to examine that the resolution plan does not contravene any of the provisions of law for the time being in force, it conforms to such other requirements as may be specified by the Board, and it provides for: (a) payment of insolvency resolution process costs in priority; (b) payment of debts of operational creditors; (c) payment of debts of dissenting financial creditors; (d) for management of affairs of corporate debtor after approval of the resolution plan; and (e) implementation and supervision of the resolution plan. 77.2. The limitations on the scope of judicial review are reinforced by the limited ground provided for an appeal against an order approving a resolution plan, namely, if the plan is in contraven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld only send the resolution plan back to the Committee of Creditors, for re-submission after satisfying the parameters delineated by Code and exposited by this Court. 15. Thus, from the catena of judgments rendered by the Supreme Court on the scope of approval of the Resolution Plan, it is amply made clear that only limited judicial review is available for the Adjudicating Authority under Section 30(2) and Section 31 of IBC, 2016 and this Adjudicating Authority cannot venture into the commercial aspects of the decisions taken by the Committee of Creditors. 16. On perusal of the documents on record, we are also satisfied that the Resolution Plan is in accordance with sections 30 and 31 of IBC, 2016. Thus, the Resolution Plan is hereby approved and is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under section 14 of IBC, 2016 shall not have any effect henceforth. In case of noncompliance of this order or withdrawal of Resolution Plan, the performance guarantee amount already paid by the Resolution Applicant shall stand forfeited, in addition to the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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