2019 (2) TMI 1700 - Tri - Insolvency and Bankruptcy

Approval of Resolution Plan - Section 31(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The Resolution Plan filed with the Application meets the requirements of Section 30(2) of the I B Code, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. The Resolution Plan is also not in contravention of any of the provisions of Section 29A. The Resolution Professional has also certified that the Resolution Plan approved by the CoCs does not contravene any of the provisions of the law for the time being in force. The Compliance Certificate is placed at pages 7 to 11 of the typed set filed with the Application. The Resolution Plan stands approved by the CoCs with 74.84% voting share. The Resolution Plan is hereby approved, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan including Resolution Applicant.

Summary

Issues:
Approval of Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016.

Analysis:
The case involved the approval of a Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor, against whom the insolvency proceedings were initiated, submitted an improved Resolution Plan which was discussed and approved by the Committee of Creditors (CoCs) in a meeting. The Resolution Plan aimed to settle the claims of various stakeholders, including Financial Creditors, Workmen, Employees, Operational Creditors, and statutory liabilities. It proposed a payment plan for different categories of creditors, including a capital reduction for equity shareholders. The Resolution Plan also outlined the reconstitution of the Board of Directors and the appointment of a supervisor for overseeing the implementation of the Plan. The Resolution Professional certified that the Plan met the requirements of the relevant regulations and did not contravene any provisions of the law. The Plan was approved by the CoCs with a significant voting share, making it binding on the Corporate Debtor and all stakeholders involved.

The Tribunal approved the Resolution Plan, making it binding on the Corporate Debtor, its employees, members, creditors, guarantors, and other stakeholders as per Section 31(1) of the I&B Code, 2016. The permission for the proposed reduction of capital was granted, and the Memorandum of Association (MoA) and Articles of Association (AoA) were to be amended accordingly and filed with the Registrar of Companies (RoC). It was clarified that the Resolution Applicant must obtain all necessary approvals as required by law within the specified period. The moratorium order passed earlier was to cease its effect from the date of this Order. The Resolution Professional was instructed to forward all relevant records to the Insolvency and Bankruptcy Board of India (IBBI) for documentation. The approved Resolution Plan was deemed effective from the date of the Order, and copies of the Order were to be sent to all participants and the Resolution Applicant promptly. The Order was pronounced in the open court, concluding the judgment.