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2019 (1) TMI 1766 - Tri - Insolvency and BankruptcyApproval of Resolution Plan for the Corporate Debtor - all conditions as per section 30(2) of the Code fulfilled or not - HELD THAT - In order to approve a Resolution Plan u/s.31(1) of the Code, Resolution Professional should examine each Resolution Plan should confirm that all conditions as per section 30(2) of the Code are complied - In compliance with the said conditions, the Resolution Professional has submitted various documents and statements as per provisions of the Code and the Rules made thereunder. And these compliances are briefly stated. The Resolution Plan dated 13th December 2016, which was approved by the CoC on 16-12-2019 for ILC Industries Ltd., submitted by M/s. Karatagi Refineries Private Limited, Resolution Applicant, confirm all the requisite conditions so as to approve it under section 31(1) of Code by the Adjudicating Authority. The Resolution Plan is approved by the CoC with 100% in accordance with law - All the relevant provisions of Code and the rules made thereunder are duly followed by the Resolution Professional and the Committee of Creditors - the said Resolution Plan is a fit to be approved under section 31(1) of the IBC, 2016. The Resolution Plan dated 13th December, 2019 submitted by M/s. Karatagi Refineries Private Limited (Resolution Applicant) as approved by the Committee of Creditor at 13th meeting held on 16th December, 2019 with 100%, is hereby approved by declaring that the Resolution Plan will be binding on the Corporate Applicant and its employees, members, creditors, including the Central Government, any State Government or any local Authority to whom a debt in respect of payment of dues arising under any law for the time being in force, as such as Authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the instant Resolution Plan - moratorium shall cease to have effect from the date of communication of the order.
Issues Involved:
1. Acceptance of the Resolution Plan. 2. Compliance with the Insolvency and Bankruptcy Code (IBC) and related regulations. 3. Management and control of the Corporate Debtor post-approval. 4. Payment to creditors and stakeholders under the Resolution Plan. 5. Implementation and supervision of the Resolution Plan. 6. Reliefs and concessions sought by the Resolution Applicant. Issue-wise Detailed Analysis: 1. Acceptance of the Resolution Plan: The application was filed by the Resolution Professional under Section 30(6) of the IBC, 2016, seeking acceptance of the Resolution Plan for the Corporate Debtor, M/s. ILC Industries Limited, submitted by Karatagi Refineries Private Limited. The Resolution Plan was approved by the Committee of Creditors (CoC) in their meeting held on 16th December 2019. 2. Compliance with the Insolvency and Bankruptcy Code (IBC) and related regulations: The Resolution Professional confirmed compliance with Section 30(2) of the Code, ensuring that the Resolution Plan: - Provides for the payment of insolvency resolution process costs. - Provides for the payment of debts of operational creditors. - Manages the affairs of the Corporate Debtor post-approval. - Implements and supervises the Resolution Plan. - Does not contravene any provisions of the law. - Conforms to other requirements specified by the Board. The Resolution Professional filed a Compliance Certificate in Form-H under Regulation 39(4) of the IBBI Regulations, 2016, confirming that the Resolution Plan meets all necessary conditions. 3. Management and control of the Corporate Debtor post-approval: The Resolution Plan specifies that upon approval by the Adjudicating Authority: - The Resolution Professional will manage and control the company until the settlement date. - The Board of Directors will be reconstituted at the option of the Resolution Applicant. - Existing authorizations for operating bank accounts will be withdrawn and modified. - A Management Committee will oversee the implementation of the Plan, comprising the Resolution Professional, members chosen by the applicant, and representatives of Financial Creditors. 4. Payment to creditors and stakeholders under the Resolution Plan: The Resolution Plan outlines the payment structure for various creditors: - Pragati Gramin Bank (secured financial creditor) will receive 100% of its claim. - TMSCCL and Mineral Embassy (unsecured financial creditors) will receive 25% of their claims. - Operational creditors will receive 1% of their admitted claims over three years. - Equity shareholders will face a 100% sacrifice, reducing their share capital to NIL. 5. Implementation and supervision of the Resolution Plan: The Plan provides a detailed implementation schedule and supervision mechanism: - The Resolution Professional will open a new bank account for the company to manage payments and deposits. - The Management Committee will monitor the implementation of the Plan until all payouts are made. - The term of the Plan is defined as Implementation Day plus 300 days. 6. Reliefs and concessions sought by the Resolution Applicant: The Resolution Applicant sought various reliefs and concessions, including: - Exemption from penal provisions of multiple tax acts. - Acceptance of reduced payments by financial creditors and operational creditors. - Withdrawal of existing attachments/recovery proceedings against the Corporate Debtor and its Directors. - Waiver of penalties, damages, and interest on tax arrears. Conclusion: The Tribunal, after examining all the conditions and compliance with the IBC, 2016, and related regulations, approved the Resolution Plan submitted by Karatagi Refineries Private Limited. The Resolution Plan was deemed to be in accordance with the law and binding on all stakeholders, including creditors and government authorities. The moratorium imposed earlier ceased, and the management control was directed to be handed over to the Resolution Applicant. The Resolution Professional was instructed to forward all records to the Board and the Resolution Applicant was given liberty to seek clarifications if needed during the implementation of the Plan.
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