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2019 (3) TMI 1771 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - section 30(4) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The terms and conditions of the resolution plan provide that the management and control of the business of the corporate debtor would remain with duly appointed monitoring committee. The monitoring committee shall submit a detailed report to the National Company Law Tribunal upon completion of implementation of the resolution plan which has been approved with 100 per cent. of voting share by the financial creditors. The expenses incurred by the monitoring committee shall be borne by the resolution applicant on agreed terms. The payments contemplated in the resolution plan shall be the corporate debtor's full and final performance and satisfaction of all its claims. No other payments or settlement (of any kind) will be made to any other person in respect of the claims filed under the resolution process against the corporate debtor. All the guarantees which have not been invoked till the plan approve date shall stand abated/extinguished. This authority deems it fit to direct to the ECGC/RBI/DRI/Income-tax/Sales Tax/ESI or any regulatory/ revenue authority to remove the company's name from SAL, defaulters' list/wilful defaulters' list and discharge/write-off any liability levied on, etc. The reason for giving this direction is that the operational creditors, except the provision(s) made in the resolution plan, would not get anything in the event of liquidation of the corporate debtor. Therefore, for successful implement of the resolution plan as approved by the CoC, the resolution applicant and its nominees will take over the management of the company and if the resolution application is saddled with statutory liabilities then the resolution plan will get frustrated and the company has to face the liquidation under the IBC, 2016. The resolution plan approved by the CoCs with 100 per cent. voting share and placed before this authority appears to be in line with the object and purport of the I and B Code, 2016, as it provides for insolvency resolution in a time bound manner for maximization of value of assets, viability of credit and balancing the interest of the stakeholders - thus, the resolution plan filed meets the requirements of section 30(2) of the I and B Code, 2016 and regulations 37, 38, 38(1A) and 39 of the IBBI (CIRP) Regulations, 2016. The resolution plan is also not in contravention of any of the provisions of section 29A. Resolution Plan approved.
Issues Involved:
1. Approval of the resolution plan under section 31 of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with section 30(2) of the Insolvency and Bankruptcy Code, 2016. 3. Distribution of money towards statutory liabilities. 4. Waiver of claims by operational creditors, including statutory authorities. 5. Implementation and monitoring of the resolution plan. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016: The resolution professional filed Miscellaneous Application No. 520 of 2018 seeking approval for a resolution plan approved by the committee of creditors (CoCs) under section 30(4) of the Insolvency and Bankruptcy Code, 2016. The plan was submitted by Seelam Infra Developers P. Ltd. (SIDPL) and was unanimously approved by the CoCs in its seventh meeting held on October 1, 2018. 2. Compliance with Section 30(2) of the Insolvency and Bankruptcy Code, 2016: The resolution professional verified that the resolution plan met the requirements of section 30(2) of the IBC, 2016, and regulations 37, 38, 38(1A), and 39 of the IBBI (CIRP) Regulations, 2016. The plan was not in contravention of any provisions of section 29A, and a compliance certificate was provided. 3. Distribution of Money towards Statutory Liabilities: The resolution plan outlined the allocation of funds towards various creditors and expenses. Notably, the plan provided for the payment of dues to workmen and employees but excluded liabilities pertaining to operational creditors such as Income-tax, sales tax, and other statutory dues. The rationale was that operational creditors would not receive any payment in the event of liquidation. 4. Waiver of Claims by Operational Creditors, Including Statutory Authorities: The tribunal addressed whether claims by operational creditors, including statutory authorities, could be waived under the IBC, 2016. It was clarified that the resolution plan must provide for the payment to operational creditors, which should not be less than the amount they would receive in liquidation. If the corporate debtor's assets are insufficient to meet these liabilities, no provision for payment is required. The tribunal cited precedents where statutory dues were waived while approving resolution plans. 5. Implementation and Monitoring of the Resolution Plan: The resolution plan included the formation of a monitoring committee comprising the resolution professional and representatives from the CoCs and the resolution applicant. The committee would oversee the implementation of the plan and submit a detailed report to the tribunal. The plan also stipulated that all inquiries, investigations, and proceedings related to the corporate debtor before the plan approval date would be dismissed. Conclusion: The tribunal approved the resolution plan submitted by SIDPL, as it complied with the relevant sections of the IBC, 2016, and the associated regulations. The plan aimed at insolvency resolution in a time-bound manner, maximizing asset value, and balancing stakeholder interests. The order of moratorium ceased to have effect from the date of the order, and the resolution professional was directed to forward all records to the IBBI and notify the participants and the resolution applicant. Order Pronouncement: The order was pronounced in open court, and the application was disposed of accordingly.
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