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TMI Blog2025 (3) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... (National Company Law Tribunal, Division Bench, Court II, Kolkata) in I.A. (IB) (Liq.) No. 29/2024 in C.P. (IB) No.170/2017. 2. Facts necessary to be noticed for deciding this appeal are: i. Corporate Insolvency Resolution Process (CIRP) against the corporate debtor MBL Infrastructures Limited commenced on 30.03.2017. ii. Resolution plan was submitted by the appellant, which came to be approved by Committee of Creditors (CoC) with 78.50% vote. iii. The resolution plan was approved by Adjudicating Authority on 18.04.2018. After certain litigation with regard to resolution plan ultimately the Hon'ble Supreme Court vide its order dated 05.09.2023 dismissed the appeal filed by the IDBI Bank/Respondent No. 1 and affirmed the approval of the resolution plan. iv. The Respondent Nos. 1 to 5 were dissenting financial creditor who did not vote in favour of the approval of resolution plan. v. Towards the implementation of the plan, letter was written to the IDBI Bank on 22.08.2024, informing about the remittance of amount in priority before payment to the assenting financial creditor. vi. The dissenting financial creditors aggrieved by action of the SRA in not correctly implement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of this Tribunal in the matter of 'Puro Natural Sugars JV' Vs. 'Shree Warana Sahakari Bank Ltd. & Ors.' in Comp. App. (AT) (Ins.) No. 661-663/2023 decided on 24.11.2023, where this Tribunal has held dissenting financial creditor is required by law the payment which is in priority over the financial creditor who voted in favour of the plan "be it upfront payment or payment by instalment". It is submitted that Adjudicating Authority has committed an error in not correctly interpreting the clauses of resolution plan. Clause 21 of the resolution plan, which has been relied by the Adjudicating Authority does not provide that entire payment to the dissenting financial creditor has to be paid upfront. The impugned order is against the intent, rational and the content of the resolution plan. Corporate debtor requires good working capital facilities for its operation and immediate full payment of entire liquidation value to the dissenting financial creditor will cost liquidity constraints. It is prayed that order impugned be set aside. 5. Learned Counsel appearing for the dissenting financial creditor submits that Adjudicating Authority has rightly allowed the application filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or and also stood as personal guarantor for credit facilities availed by the corporate debtor. In the 12th meeting held by the Committee of Creditors of the corporate debtor, on 21.12.2017, resolution plan submitted by the respondents was put up for voting and the same was approved with 78.5% of the votes casted in favour of the plan. However, the following creditors did not consent to the approval of the resolution plan and accordingly, they became dissenting financial creditors (DFC) 1. IDBI Bank Limited: voting share of 6.56% 2. Bank of Baroda: voting share of 4.01% 3. Indian Bank: voting share of 6.10% 4. Bank of India: voting share of 3.20% 5. Punjab National Bank: voting share 1.98% Copy of the approved resolution plan has been annexed as Annexure "A2" of the application." 9. Para 9 of the impugned order captures the repayment in 39 instalments in terms of the percentage mentioned therein, which para 9 is as follows: "9. According to the applicant, the repayment in 39 total instalments in terms of the percentage mentioned therein would apply to assenting financial creditors and not to dissenting financial creditors who will have to be paid in priority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e resolution plan." 11. The expression used in Clause 21: The liquidation value due to dissenting financial creditors, if any, will be made (in proportion to the liquidation value arrived as above) before any recoveries are made by the Financial Creditors who voted in favour of the resolution plan." 12. The plan thus clearly contemplated that the liquidation value to the dissenting financial creditor shall be made over before any recovery are made by the financial creditor who voted in favour of the resolution plan. 13. What is the true import and interpretation to Clause 21 is a question to be answered in this appeal. The Adjudicating Authority has noticed the case of the applicant that, had the dissenting financial creditor are paid as assenting financial creditor they will be also entitled to receive amount mentioned in paragraph 10 last column, for example, IDBI Bank will be receiving 95.5 Crore if the payment is made as assenting financial creditors, whereas, liquidation value receivable by virtue of Section 30(2)(b) is only 14.27 Crore. In event, the submission of the appellant is accepted, there will be no difference in payments made to the assenting financial credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ?" 15. This Tribunal considered and answered Question No. II, after noticing the provisions of Section 32 and Regulation 38(1B) of CIRP Regulations has made following observation in paragraph 19: "19. According to the scheme of the IBC, the payment to which a Financial Creditor, who does not vote in favour of the Resolution Plan is entitled for payment in accordance with sub-section (1) of Section 53, in the event of liquidation of the Corporate Debtor and further dissenting Financial Creditor has to be paid in priority to the Financial Creditors who vote in favour of such Resolution Plan. The submission advanced on behalf of learned Counsel for Respondent Nos.1 and 2 that dissenting Financial Creditors are entitled to upfront payment is not in line with the statutory scheme as contained in the IBC and the CIRP Regulations. There is no provision which can be pointed out, which requires Successful Resolution Applicant to make upfront payment to the dissenting Financial Creditors. What is required by law is the payment "in priority over the Financial Creditors who voted in favour of the plan". When we look into the relevant clauses of the Resolution Plan, i.e., Clause C-3(V), whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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