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2019 (11) TMI 1414 - Tri - Insolvency and BankruptcyApproval of Resolution Plan of the Corporate Debtor approved by the CoC - HELD THAT - The RP complies with all the provisions of the Insolvency Bankruptcy Code, 2016 and the CIRP Regulations, 2016 and does not contravene any of the provisions of the law, for the time being in force. The affidavit, in compliance of Section 29(A) of the Code, has also been submitted by the successful bidder, Fortis Chemicals Ltd., in compliance of Section 30(1) of the Code. The corporate debtor company was not a going concern when the CIRP has been initiated. As per the report it is understood that the successful resolution applicant has undertaken to run the plant within 6 months from the date of approval of the resolution plan by this AA after taking immediate steps for repair and maintenance of plant. There is no justifiable reason to interfere with the selection of the Resolution Applicant by the CoC with majority vote share - the resolution plan of the corporate debtor approved by the CoC by 95.15% vote share is liable to be approved.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP). 2. Evaluation and approval of Resolution Plans. 3. Objections to the Evaluation Process. 4. Compliance with Insolvency and Bankruptcy Code (IBC) provisions. Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The application (CP(IB) No. 1439/KB/2018) was filed by an Operational Creditor, an ex-employee of the Corporate Debtor (M/s. Alex Green Energy Pvt. Ltd.), claiming unpaid operational debt of ?10,00,800/-. The Corporate Debtor, engaged in solar power generation, was unable to pay its debts due to operational disruptions caused by a storm. The application was allowed, initiating the CIRP and appointing Mr. Surya Kant Satapathy as the Interim Resolution Professional (IRP). 2. Evaluation and Approval of Resolution Plans: The IRP continued the CIRP process, issuing public announcements and inviting Expressions of Interest (EOI). Six Resolution Plans were received and evaluated. The top three Resolution Applicants were called for negotiation, with Fortis Chemicals Private Limited emerging as the highest bidder with a bid of ?11.07 Crores. The Committee of Creditors (CoC) approved the Resolution Plan of Fortis Chemicals Pvt. Ltd. with 95.15% voting share. 3. Objections to the Evaluation Process: Kundan Care Products Ltd., ranked as H6, objected to the approval of the Resolution Plan on two grounds: - The RP skipped Step-III of the evaluation process, denying the applicant an opportunity to present and negotiate their plan. - The process was not transparent, as only the H1 bidder was called for negotiation. The tribunal found these objections devoid of merit. Step-III was optional and at the discretion of the CoC, which chose to proceed with Step-IV, negotiating with the top three Resolution Applicants. The tribunal also noted that Kundan Care Products Ltd. had sufficient opportunities to participate and revise their bids but failed to do so timely and effectively. 4. Compliance with Insolvency and Bankruptcy Code (IBC) Provisions: The tribunal emphasized the importance of adhering to the statutory period of 270 days for the CIRP and the commercial decisions of the CoC. The tribunal cited the Supreme Court's rulings in K. Sashidhar v. Indian Overseas Bank and the Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, which limited judicial review to ensuring compliance with the IBC and protecting the interests of stakeholders. Conclusion: The tribunal dismissed the application of Kundan Care Products Ltd. and approved the Resolution Plan of Fortis Chemicals Pvt. Ltd., which complied with all provisions of the IBC and CIRP regulations. The moratorium order ceased, and the RP was directed to forward all records to the Insolvency and Bankruptcy Board of India. The case CP(IB) No. 1439/KB/2018 was disposed of accordingly.
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