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TMI Blog2023 (8) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the Resolution Plan submitted by Respondent No.4. 2. Brief facts of the case necessary for deciding this Appeal are:- The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor- 'Sharon Bio-Medicine Limited' was initiated by the Adjudicating Authority vide order dated 25.04.2017. During the CIRP, Resolution Plan submitted by the Appellant was approved on 28.02.2018. Applications were filed before the Adjudicating Authority seeking appropriate reliefs on account of delay and non-implementation of the Resolution Plan by the Appellant. This Tribunal on 05.01.2022 directed the Appellant to submit an enforceable bank guarantee within 30 days. Appeal filed by the Appellant before the Hon'ble Supreme Court against the order dated 05.01.2022 was dismissed on 28.02.2022. The Adjudicating Authority vide order dated 03.06.2022 directed the Committee of Creditors (CoC) for initiating the fresh CIRP and appointed Respondent No.2 as Interim Resolution Professional (IRP). Resolution Plan submitted by the Respondent No.4 was approved by majority of 79.28% vote share. The Appellant abstained from voting for the approval of the Resolution Plan. On Application filed for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Resolution Plan, shall be paid in priority over financial creditors who voted in favour of the plan also supports the submissions of the Appellant. Learned Counsel for the Appellant has relied on the judgment of the Hon'ble Supreme Court in "Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Ors.- (2020) 8 SCC 531" as well as the judgment of this Tribunal in "Facor Alloys Limited and Anr. vs. Bhuvan Madan and Ors.- (2020) SCC OnLine NCLAT 789" and another judgment of this Tribunal in "Akashganga Processors Pvt. Ltd. v. Sri Ravindra Kumar Goyal & Ors.- Company Appeal (AT) (Ins.) No.1148 of 2022. 4. Learned Counsel for the Resolution Professional refuting the submissions of the Counsel for the Appellant submits that the Resolution Plan approved by the Adjudicating Authority is not discriminatory in any manner. The Appellant being dissenting financial creditor cannot claim equivalent payment as is offered to the assenting financial creditor. It is the Appellant whose Resolution Plan was earlier approved in the first round and Appellant delayed the implementation of the plan for four years and now by filing the Appeal, his only intend is to delay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor................" 9. Regulation 38 of the Regulations 2016 which provides for 'mandatory contents of the resolution plan' which was also amended on 27.11.2019, which is as follows:- "38. Mandatory contents of the resolution plan. [(1) The amount payable under a resolution plan - (a) to the operational creditors shall be paid in priority over financial creditors; and (b) to the financial creditors, who have a right to vote under sub-section (2) of section 21 and did not vote in favour of the resolution plan, shall be paid in priority over financial creditors who voted in favour of the plan.] [(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.] [(IB) A resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference in payment of the debts of financial and operational creditors. It was held that amended Regulation 38 does not lead to the conclusion that financial and operational creditors, or secured and unsecured creditors, must be paid the same amounts, percentage wise under the resolution plan before it can pass muster. The Hon'ble Supreme Court has also noticed that it is the CoC who is to negotiate and accept a resolution plan which may involve differential payment to different classes of creditors. In paragraph 88 of the judgment, following was held:- "88. By reading paragraph 77 de hors the earlier paragraphs, the Appellate Tribunal has fallen into grave error. Paragraph 76 clearly refers to the UNCITRAL Legislative Guide which makes it clear beyond any doubt that equitable treatment is only of similarly situated creditors. This being so, the observation in paragraph 77 cannot be read to mean that financial and operational creditors must be paid the same amounts in any resolution plan before it can pass muster. On the contrary, paragraph 77 itself makes it clear that there is a difference in payment of the debts of financial and operational creditors, operational creditors hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l creditors. Mrs. Madhavi Divan is correct in her argument that Section 30(2)(b) is in fact a beneficial provision in favour of operational creditors and dissentient financial creditors as they are now to be paid a certain minimum amount, the minimum in the case of operational creditors being the higher of the two figures calculated under sub-clauses (i) and (ii) of clause (b), and the minimum in the case of dissentient financial creditor being a minimum amount that was not earlier payable. As a matter of fact, pre-amendment, secured financial creditors may cramdown unsecured financial creditors who are dissentient, the majority vote of 66% voting to give them nothing or next to nothing for their dues. In the earlier regime it may have been possible to have done this but after the amendment such financial creditors are now to be paid the minimum amount mentioned in sub-section (2). Mrs. Madhavi Divan is also correct in stating that the order of priority of payment of creditors mentioned in Section 53 is not engrafted in sub-section (2)(b) as amended. Section 53 is only referred to in order that a certain minimum figure be paid to different classes of operational and financial credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... differential treatment. In the above case, the plan was approved on 13.11.2019 i.e. prior to amendment dated 27.11.2019. In paragraphs 41 and 42, following was held:- "41. It is pertinent to mention that voting on approved Resolution Plan took place on 13th November 2019, on which date only the Operational Creditors were to be paid in priority. The Amendment to Regulation 38(1) of CIRP Regulations mandates priority in payment to dissenting Financial Creditors. This amendment came into effect on 27th November 2019, i.e. post the approval of Resolution Plan by the erstwhile COC of the Corporate Debtor. Therefore, as on the date of approval of the Resolution Plan by the erstwhile COC, the only requirement under the provision of the Code qua the dissenting Financial Creditors was the payment of the minimum liquidation value, which is duly complied in the present case. 42. It is settled position in Law that provisions in a Statute would operate prospectively unless the retrospective operation is expressly provided for. There being no clarification provided to that effect, the amended Regulation 38 cannot be said to have retrospective application." 15. The above judgment also notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egory of stakeholder Sub-Category of Stakeholder Amount Claimed Amount Admitted Amount Provided under the Plan# Amount Provided to the Amount Claimed (%) 1. Secured Financial Creditors (a) Creditors not having a right to vote under sub-section (2) of section 21 (b) Other than (a) above:- (i)who did not vote in favour of the resolution plan (ii) who voted in favour of the resolution plan Total [(a)+(b)] 2. Unsecured Financial Creditors (a) Creditors not having a right to vote under sub-section (2) of section 21 (b) Other than (a) above:- (i) who did not vote in favour of the resolution plan (ii) who voted in favour of the resolution plan 19. The above Form clearly indicate that there are two different categories one who did not vote in favour of the resolution plan and other those who voted in favour of the resolution plan. Form-H also clearly indicate that there can be different payment to above two categories. Thus, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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