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TMI Blog2020 (3) TMI 1461X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 (hereinafter referred to as the Code) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as the Regulations) seeking sanction of resolution plan as approved in the meeting of Committee of Creditors (CoC) held on 20.07.2019. 2. It has been submitted that the insolvency petition was filed by the Operational Creditor i.e. Bhagwati Kripa Paper Mills Pvt. Ltd. under Section 9 of the Code for initiation of Corporate Insolvency Resolution Process (CIRP) in the case of M/s A.P. Enterprises Pvt. Ltd. (Corporate Debtor) and the same was admitted vide order dated 13.11.2018 and the CIRP of the Corporate Debtor was initiated. It is submitted that the Mr. Somnath Gupta was appointed as Interim Resolution Professional (IRP) vide order dated13.11.2018 and within two days of the appointment order, the IRP issued a public announcement as per Regulation 6 of the Regulations read with Section 15 of the Code in Form A in two newspapers i.e. The Financial Express, an English newspaper dated 17.11.2018 and Jan Satta (Hindi) thereby inviting claims from the creditors of the Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Goel 0 0 Surender Kumar Kansal Financial Assets Crest Capital Do 22,54,51,352 8,49,02,853 23,01,40,023 7,99,31,539 Rajkamal Saraogi 23,48,28,694 7,49,60,225 Total 31,44,37,501 14,45,16,596 5. It is stated that further more claims were received pursuant to publication of Form A and the shares of the members of CoC after incorporating all the claims of all creditors is as follows:- S. No. Name of the Creditors Amount of Claim Amount of claim admitted Voting %age 1 Kotak Mahindra Bank Ltd. 19,09,07,445.00 19,09,07,445.00 84.32 2 RBL Bank 9,51,486.00 9,51,486.00 0.42 3 ICICI Bank Loan (Consolidated amount) 80,40,104.00 80,40,104.00 3.55 4 IDFC Capital First 6,82,111.00 6,82,111.00 0.30 5 Edelweiss Retail Finance Ltd 14,09,159.00 0.62 6 Magma Fincorp Ltd 5,71,946.00 0.25 7 Religare Finvest Ltd. 13,16,751.00 13,16,751.00 0.58 8 Tata Capital Financial Services Ltd. 4,97,014.00 0.22 9 Tata Capital Housing Finance Services Pvt Ltd 70,42,355.00 3.11 10 Aashriya Capital & Financial services Pvt Ltd 1,50,00,000.00 6.62 Total 20,18,97,896.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against it. Copy of the complete resolution plan is at Annexure 1 of the application. 14. It is also submitted that CoC while accepting the bid had taken care of all the provisions and Regulations. It is prayed that the application may be allowed and resolution as approved by the CoC in the CIRP of the Corporate Debtor be approved. 15. The learned counsel for the RP submitted that as per the Revised Form H dated 20.01.2020 filed vide Diary No. 509 dated 20.01.2020, all the provisions of the Code and Regulations were complied with and that the approval of the resolution plan was made by 95.30 % voting share of the financial creditors in the meeting of the CoC held on 20.07.2019 and therefore, resolution plan submitted by Mr. Narinder Garg, Mrs Manju Garg & Mr. Shiv Garg jointly may be approved. 16. We have carefully considered the submissions of the learned counsel for the RP and the learned Counsel for the resolution applicant and have also perused the record. 17. The corporate debtor was incorporated on 13.01.1993 for the purpose of manufacturing and distributing of pulp and paper products mainly kraft paper, as discussed above, the CIRP proceedings were initiated by order de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated amount ) 3.55 Assent 4 IDFC First Bank Ltd (Capital First Ltd amalgamated with IDFC Bank Ltd) 0.30 Dissent 5 Edelweiss Retail Finance Ltd 0.62 Absent 6 Magma Fincorp Ltd - 05.3.16 0.25 Absent 7 Religare Finvest Ltd 0.58 Assent 8 Tata Capital Financial Services Ltd 0.22 Assent 9 Tata Capital Housing Finance Ltd 3.11 Absent 10 Aashriya Capital & Financial Services Pvt Ltd 6.62 Assent Total 100.00 All the above financial creditors including the dissenting financial creditors are proposed to be paid in full with interest. 21. The details of stakeholders under the resolution plan given in Para 7 of Revised Form H dated 21.02.2020 :- Category of Stakeholder Amount Claimed Amount Admitted Amount Provided under the Plan Waiver Sought A Secured Financial Creditors 20,59,89,903 20,59,89,903 17,22,90,677 (Plus Interest) (Refer Explanation A) NIL B Unsecured Creditors 2,04,28,467 2,04,28,467 2,04,28,467 (Plus Interest) (Refer Explanation A) C Operational Creditors OC upto Rs 1 Lac 23,43,27,874 6,17,320 6,17,320 NIL OC Rs 1-10 Lac 91,56,418 36,62 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Resolution Plan (a) is feasible and viable, according to the CoC? Recorded in the minutes of 8th CoC meeting Yes (b) has been approved by the CoC with 66% voting share? Recorded in the minutes of 9th CoC meeting Yes Section 31(1) Whether the Resolution Plan has provisions for its effective implementation plan, according to the CoC? Clauses 4.3 G&H Refer Page 72 of Paperbook Yes Regulation 35A Where the resolution profesional made a determination if the corporate debtor has been subjected to any transaction of the nature covered under sections 43, 45, 50 or 66, before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board? No such transaction discovered/determined Yes 84[Regulation 38 (1) Whether the amount due to the operational creditors under the resolution plan has been given priority in payment over financial creditors?] Clause 4.3C iv Refer Page 61-63 of Paperbook Yes Regulation 38(1A) Whether the resolution plan includes a statement as to how it has dealt with the interests of all stakeholders? Clause 4.3C Refer Page 57 Paperbook Yes 85[Regulation 38(1B) (i) Whether the Resolution Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. 24. The conditions provided for in Section 31(1) of the Code for approval of resolution plan are therefore:- (a) The Resolution Plan is approved by the CoC under Section 30(4) of the Code; (b) The Resolution Plan so approved meets the requirements as referred to in Section 30(2) of the Code; (c) The Resolution Plan has provisions for its effective implementation. The satisfaction of the conditions is discussed below. 25. It is submitted by the RP that the resolution plan has been approved by a vote of 95.30% of voting share of the financial creditors and therefore, the conditions provided for by Section 30(4) of the Code are satisfied. 26. The provisions of Section 30(2) of the Code are as follows:- The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the repayment of other debts of the corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution process cost estimated to be Rs.16,00,000/- shall be paid in full and in priority, before payment of any liability, within 30 days from the date of approval of resolution plan by the Adjudicating Authority. (b) Section 30(2)(b): The resolution plan (Page 61 of the application and Clause 4.3C iv of the Resolution Plan) states that according to the Information Memorandum issued by the RP to the resolution applicant, the operational creditors have been segregated into three categories. The first category being operational creditors upto 1 lac and the resolution plan proposes 100 % payment against the payable amount of Rs.6,17,320. The Next category being, operational creditors between Rs 1 lac to Rs 10 lac and the resolution plan proposes 40 % payment i.e. Rs. 36,62,567 against the payable amount of Rs. 91,56,418. The third category being operational creditors above 10 lac and the resolution plan proposes 40 % payment i.e. Rs. 14,71,07,451 against the payable amount of Rs. 36,77,68,627. There is also sum payable of Rs.87,62,746/- as Government dues and the Resolution Plan has proposed an amount of Rs.44,69,222/- against it, and there is also a liability of Rs.38,984/- u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly approved by the Adjudicating Authority is proposed to be done by the Resolution Professional for the entire period of its implementation. It is also stated that in case any violation of any terms of the resolution plan by the Resolution Applicant or the Corporate Debtor is observed, the relevant provisions of the Code dealing with such violations shall be invoked. The Plan proposes an implementation Schedule of sixteen quarters or 48 months from the date of approval of the resolution plan. It is stated that the implementation of the plan will be made by making payments towards the outstanding CIRP costs, financial creditors, operational creditors, government dues and payment of other dues and towards unsecured loans/deposits and by fulfilling all other terms laid out in this resolution plan. 29. We have discussed above that the requirements under Section 31(1) of the Code are satisfied in the present case. In para No. 4 of Revised Form H (Diary No. 509 dated 20.01.2020) the RP has certified that the resolution plan complies with all the provisions of the Code and Regulations and does not contravene any of the provisions of the law for the time being in force. The RP has also c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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