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TMI Blog2025 (4) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... Ramkumar [ Justice Sharad Kumar Sharma ] Member ( Judicial ) And [ Jatindranath Swain ] Member ( Technical ) For the Appellant : Mr. Krishna Srinivasan, Senior Advocate For Ms. Pavitra Venkateswaran, Advocate For the Respondents : Mr. R. Sankaranarayanan, Senior Advocate For Mr. Aditya Reddy, Mr. Abhishek Swaroop, Mr. Palash Agarwal and Ms. Bhawana Sharma, Advocates for R1 Mr. Pradeep Joy and Ms. Dharmya M S, Advocates for R2 Mr. Srinath Sridevan, Senior Advocate For Mr. Rama Subramaniam Raja, Advocate for R3 Mr. N. Somasundar, Advocate for R10 Mr. H Arunachalam, Advocate for R21 JUDGMENT ( Hybrid Mode ) [ Oral Judgment : Justice Sharad Kumar Sharma, Member ( Judicial ) ] These are two company appeals. The respective counsels, representing the parties in two appeals have unanimously agreed that, since the issues of law and facts are common, in both appeals, they may be considered and decided together. 2. In Company Appeal (AT) (CH) (Ins) No. 36/2024, RBL Bank Limited versus Sical Logistic Limited and 21 others, the Appellant (RBL Bank Limited) questions the propriety of the impugned order of 20.12.2023, as passed in IA (IBC) No. 1188/2023 which was preferred by Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n IA (IBC) No.1329/(CHE)2023, as preferred in Company Petition (IB) No. 73/2020, whereby the Ld. Tribunal has declined the prayer to restrain Respondent No. 1 (SICAL Logistics Limited) from alienating the assets of the Corporate Debtor, provided as security to the Appellant herein and rejected the relief sought for, in the IA (IBC) No. 1329/2023, with the observations, that "the members of the erstwhile Committee of Creditors", are directed, to take action within a period of one month from the date of the order, to redraw the distribution matrix by taking into account the amount already disbursed, the amount withheld and future receipts based on the principles to the effect that "the Dissenting Creditors shall be paid the amount in accordance with Section 53(1) of the I & B Code", in the event of liquidation, in compliance with the terms of provision contained under Section 30(2) of the I & B Code, 2016, as mentioned in Para 1.2.9.1(b) of the Resolution Plan and the Dissenting Financial Creditors shall be paid in priority over the Assenting Financial Creditors as held in IA(IBC) No. 250/(CHE)2023. 6. For all practical purposes since the counsels have agreed to address the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Creditors in terms of Clause 1.2.9 (1) (b) of the said plan. 9. The Resolution Plan that was approved by Committee of Creditors (CoC) on 29.02.2022, and later on, affirmed by Ld. NCLT on 08.12.2022 in IA(IBC)No.366/2022 amounts to payment of Rs. 521.82 Crores by the Successful Resolution Applicant (SRA), Respondent No. 1 herein, the breakup of which is given below: - i) Payment of secured FCs - upfront: Rs 54.32 Crores (Effective Date +30 days) ii) Payment of Secured FCs from the internal cash balance of the Corporate Debtor: Rs. 40.63 Crores (Effective Date +30 days) iii) Payment of Secured FCs - deferred Lot-1: Rs. 105 Crores. iv) Payment of Secured FCs: deferred Lot-2: Rs. 226 Crores. v) Payment of Secured FCs, if live BGs are invoked: Rs. 84.82 Crores. The effective date was also determined to be 11.01.2023 10. We may not be much concerned at this stage, with regards to the Resolution Plan and its implication, which stood approved by the Committee of Creditors, because the only controversy which, has been addressed upon by the Ld. Counsel for the Respondent was as to how and when the amount thus determined qua the Appellant, who was held to be a Dissenting Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriate action. So far as the other reliefs are concerned, we may not be much concerned, while deciding these appeals except for relief A, which has been extracted hereunder: -. "A. The Respondent No. 1, the Resolution Professional, be directed to make payment of the sum of Rs. 32.71 crores to the Applicant herein (i.e. the total amount payable under the terms of resolution plan Rs.42.09 crores minus the amount received by the Applicant on 13.01.2023 Rs.9.38 crores) in line with the resolution plan of the Respondent No.2, successful resolution applicant, dated 08.01.2022 (amended on 11.02.2022 and 24.02.2022) which was approved by this Hon'ble Tribunal vide order dated 08.12.2022;" 13. IA (IBC) No. 250/2023, was vehemently contested by the respective parties including the Appellant. The Ld. Adjudicating Authority on considering the rival contentions while deciding IA (IBC) No. 250/2023, including the narration of facts pertaining to the basis of the claim, its determination and the quantification of the entitlement of the Dissenting and Assenting Creditors came to the conclusion in Para B9 of the order rendered in IA (IBC) No. 250/2023 that, the Dissenting Creditor woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under resolution plan is more than liquidation value? B1). In the instant case, the resolution amount is higher than the liquidation value. The Applicant RBL Bank arrived at its share of Rs.42.09 crores by calculating 9.88% on the resolution plan value i.e. Rs.425.93 crores instead of calculating the share on the liquidation value. The liquidation value is Rs.351.88 crores. Assuming non- deduction of CIRP cost and workmen dues etc., the Applicant is entitled to receive its share as per the liquidation value i.e. 9.88% of Rs.351.88 crores, which comes to Rs.34.76 crores only as opposed to the Applicant claims of Rs.42.09 crores. In the JLM held 13.01.2023, the Applicant had demanded that if the liquidation value is to be taken, then the same shall be as per the liquidation value of the individual lenders." 17. During the proceedings of the instant appeals, the Ld. Counsel for the Bank of Baroda, the lead member of the Committee of Creditors, Respondent No.3 herein has contended that in the absence of a challenge given to the order of 20.12.2023 rendered in IA (IBC) No. 250/2023 as above, where the quantification of the amount claimed by the Appellant has already been determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Bank - - - 18. At this stage, we feel that Ld. Adjudicating Authority has erred in holding that the amount payable to a Dissenting Creditor is the minimum amount prescribed in Section 30(2)(b) of I & B Code, 2016, which is the amount to be determined as per Section 53(1) of the I & B Code, 2016, in the event of liquidation of the Corporate Debtor in compliance with the provision of Section 30(2) of the Code as mentioned in para 1.2.9.1.b of the approved Resolution Plan. The entitlement of Dissenting Creditor is laid down in Section 30(2)(b)(ii) along with explanation (I). Section 30(2)(b)(ii) stipulates that Resolution Plan shall provide for payment to a Dissenting Creditor, which shall not be less than the amount to be paid in accordance with Section 53(1) in the event of liquidation of the Corporate Debtor. This implies that the payment to be given shall not be less than the proportionate share of liquidation value. Explanation (I) states that the distribution under this Clause shall be fair and equitable to such Creditors. In the instant case, the resolution value is higher than liquidation value. So it is fair and equitable that the Dissenting Creditor gets a pro-rata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditors will be paid in priority over the assenting Financial Creditors in the manner as discussed in para C1 - C6 of its order dated 20.12.2023. But full clarity is yet to be made available in the said order dated 20.12.2023. Will the Appellant (RBL Bank) get its dues in full, before any payment is given to other Assenting Creditors which he is praying for? This has not been answered clearly in the said order and has been left to be interpreted by the monitoring committee. We are of the view that priority in payment will mean that whenever any payment is released by the Successful Resolution Applicant (SRA) to the FCs, the Dissenting Creditor will still be paid pro-rata, but first in case where SRA pays the plan amount at one go, then the issue is simple, pay dissenting FC first and then to other FCs. But in most cases, payments from Successful Resolution Applicant (SRA) will come in instalments: this being the case, payment to creditors will have to be paid in instalments. Further, even within an instalment, fund infusion may be done in stages. In such a case it may not be possible to pay in full to the Dissenting Creditors before disbursement to Assenting Creditors can start. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,00,000/- as deferred FC debt payments to the Financial Creditors in two installments, that is Rs. 105,00,00,000/- within a period of two years and the balance amount of Rs. 226,00,00,000/- within two years and six months of the effective date. It was further observed that the Corporate Debtor has also agreed to pay the interest at the rate of 8% per annum, payable annually at the end of each year as computed on a monthly basis for the deferred component to be paid to the Financial Creditors. 22. The Ld. Adjudicating Authority, while considering the stand taken by the Ld. Counsel for the Appellant regarding the IA No. 1188/2023, has made reference to the order passed on 20.12.2023 on IA (IBC) 250/2023. According to the findings recorded, the Ld. Adjudicating Authority while making reference to the terms and conditions contained in Para 1.2.9.1(m), of the Resolution Plan has observed that it will be a deemed consent of the Financial Creditor for the sale of non-core assets as the relevant clause 1.2.9.1(m) has envisaged that in the event of any sale in relation to the secured fixed assets of the Corporate Debtor, the money realized from such sale shall be utilized for making the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituated at Thattankulam, Madhavaram, in terms of the Approved Resolution Plan. (d) Respondent Nos. 2 to 22 are directed to execute the respective definitive documents including Term Debt Agreement, Declaration of Trust and Trustee Agreement, etc., and take steps pursuant thereof as stipulated under the Approved Resolution Plan. Respondent No. 1 is also directed to provide all assistance / facilitation as required by the Applicant for the above. 24. As regard relief which has been prayed in para (c) of the relief clause, the applicant in its application itself has stated that in terms of para 1.2.9.1(m) of resolution plan, financial creditors shall be deemed to have provided consent to such sale on the approval of resolution plan. Since the Corporate Debtor has every right to go ahead with sale of non-core assets, post sanction of the plan and there is approval of the monitoring committee and all the creditors barring RBL Bank Ltd. as to going towards that part payment of amount due to Financial Creditors, the relief as sought for in para (c) regarding waiver of interest for the deferred FC payment amount is declined. 25. In the light of what has been stated above, the Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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