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2019 (7) TMI 465 - Tri - Insolvency and BankruptcyAdmissibility of application - Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - approval of Resolution Plan by CoC - HELD THAT - Sub-section 2 of Section 30 casts duty on the Resolution Professional to examine the resolution Plan received by him to confirm that such Resolution Plan provides for the payment of insolvency resolution process costs, provides for the payment of the debts of the operational creditors in such manner as may be specified, provides for the management of the affairs of the corporate debtor after approval of the Resolution Plan; the implementation and supervision of the Resolution Plan, that the Resolution Plan does not contravene any of the provisions of the law, and that the Resolution Plan conforms to such other requirements as may be specified by the Board. The Resolution Professional has filed compliance certificate in Form H and inter alia has confirmed that he has examined and verified the Resolution Plan approved by the CoC, in the light of the requirements of the Code and Regulations and that it is compliant to the relevant provisions of the Code and Regulations. It is pertinent to state here that Section 29A of the Code prescribes certain eligibility criteria and disqualifications for persons who submit a resolution plan. Resolution applicants have given adequate declaration and undertaking on their eligibility to submit the Resolution Plan. Resolution Professional has also certified that he has verified that the Resolution Applicant and the persons in management and control of the company and the other Connected Persons are eligible to submit resolution plan and does not fall under any of the category as mentioned in Section 29A as inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2017. All the requirements of Section 30 (2) are fulfilled and no provision of the law for the time being in force has been contravened - the Resolution Plan meets the requirements of Section 30 (2) of the Code and that the resolution plan has provisions for its effective implementation. The resolution plan, as approved by the requisite super majority of members of CoC, is in accordance with the sub-section 2 of Section 30 read with Section 31 of the Code and as the Resolution Applicant is not disqualified under Section 29A of the Code and as no infirmity seems to have brought out upon screening of the Resolution Plan; we hereby approve the Resolution Plan under sub-section (1) of Section 31 of the Code. Application disposed off.
Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016. 2. Claims of various creditors and their treatment under the Resolution Plan. 3. Compliance with statutory requirements and provisions of the Code. 4. Jurisdiction and role of the Resolution Professional. 5. Adjudication of disputed claims. Detailed Analysis: 1. Approval of the Resolution Plan: The application was filed by the Resolution Professional under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan. The Resolution Plan was approved by the Committee of Creditors (CoC) with a majority vote of 89.92%. The Adjudicating Authority emphasized that it is not expected to substitute its view with the commercial wisdom of the CoC unless the plan is contrary to the express provision of law and public interest. The object of the Code is to promote resolution and every effort must be made to try and see that resolution is made possible. 2. Claims of Various Creditors: - Bagai Steel Syndicate (CA 38 (PB)/2019): The claim amounting to ?6,39,03,187.84/- was allowed as it was based on an enforceable arbitral award. - M/s. Kanti Bijlee Utpadan Nigam Ltd. (CA No. 1219 (PB)/2018): The claims were rejected as they were belated and based on unascertained notional unilateral calculations. - M/s. Sree Shanthosh Steels Pvt. Limited (CA No. 557 (PB)/2018): The claim was rejected as barred by limitation and alleged to be fraudulent. - Pending Adjudication Claims (CA No. 828 (PB)/2018, CA No. 938 (PB)/2018, CA No. 357 (PB)/2018): These claims were pending adjudication before the Hon’ble High Court of Delhi and could not be over-ridden by the Resolution Professional. - CBRE South Asia Private Limited (CA No. 939 (PB)/2018): The claim was partially accepted, and the applicant was advised to move the appropriate forum for the disputed amount. - SAIL (CA No. 556 (PB)/2018): The claims were pending adjudication and would be dealt with in accordance with the law after final adjudication. - Other Claims (CA No. 824 (PB)/2018, CA No. 940 (PB)/2018, CA No. 603 (PB)/2018): These claims were either belated or pending adjudication and were advised to be moved to the appropriate forum. 3. Compliance with Statutory Requirements: The Resolution Plan was examined for compliance with Section 30(2) of the Code. The Resolution Professional confirmed that the plan provided for the payment of insolvency resolution process costs, the payment of debts of operational creditors, management of the corporate debtor’s affairs, implementation and supervision of the plan, and did not contravene any provisions of the law. The plan also included a performance security of ?5 crores as stipulated by the CoC. 4. Jurisdiction and Role of the Resolution Professional: The Resolution Professional’s role is administrative and not adjudicatory. The Resolution Professional determines claims based on available records for the constitution of the CoC and voting share. The determination of claims by the Resolution Professional is open to correction, and disputed claims require proper trial and cannot be decided by the Adjudicating Authority under sub-section (5) of Section 60 of the Code. 5. Adjudication of Disputed Claims: The Adjudicating Authority emphasized that it cannot adjudicate disputed claims and that such claims should be moved to the appropriate forum for adjudication. The decision of the Resolution Professional does not amount to rejection of the claim but determination for the constitution of the CoC. Conclusion: The Resolution Plan was approved as it met the requirements of Section 30(2) of the Code and had provisions for its effective implementation. The plan was binding on the corporate debtor, its employees, members, creditors, guarantors, and other stakeholders involved. The moratorium order ceased to have effect from the date of the order, and the Resolution Professional was directed to forward all records to the Insolvency and Bankruptcy Board of India (IBBI). The approved Resolution Plan became effective from the date of passing of the order, and all pending applications were disposed of accordingly.
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