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2019 (11) TMI 1593 - Tri - IBCApproval of Resolution Plan - Section 30(6) of the Insolvency Bankruptcy Code, 2016 read with Regulation 39(4) of the Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT - The Resolution Plan in hand satisfies the minimum threshold of approval by 66% majority of the CoC. Hence, as per the CoC, the plan stands the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the plan effective after approval by this Bench. The Resolution Applicant has sought extinguishment of all claims along with abatement of any related legal proceeding including criminal proceedings. Furthermore, the Resolution Applicant seeks waiver of outstanding statutory dues and other claims as on the date of approval of the Resolution Plan. The exemption is also sought from the statutory dues of the Central Board of Direct Taxes (CBDT) and under the Stamps Act, from the levy of stamp duty and fees applicable in relation to this plan and its implementation - The relief sought is hereby allowed by this Bench in view of the judgement of the respected Coordinate Bench at Chandigarh and Chennai in the matter of State Bank of India V. MOR Farms Private Limited 2018 (6) TMI 1586 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH where it was held that There is no haircut for the payment obligations to the operational creditor and as they are to be paid their dues in the normal course of business. Even the past employees of the corporate debtor will continue to be engaged by the Resolution Applicant without having recourse to termination of their services and shall be paid as per the existing agreement with them. The initial amount of ₹45 lacs stands already deposited by the Resolution Applicant. The Resolution Applicant, who will step into the shoes of Corporate Debtor subsequent to approval of Resolution Plan by the Bench, shall not be held responsible for any outstanding statutory dues and other claims for the period before commencement of CIRP - The Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under section 14 shall cease to have any effect henceforth. The Resolution Professional shall submit the records collected during the commencement of the Proceedings to the Insolvency Bankruptcy Board of India for their record and also return to the Resolution Applicant or New Promoters. The directions embodied and period of implementation provided hereinabove shall be effective from the date of receipt of this Order.
Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency & Bankruptcy Code, 2016. 2. Compliance with the procedural requirements of the Insolvency & Bankruptcy Code, 2016 and related regulations. 3. Treatment of claims from financial and operational creditors. 4. Implementation and supervision of the Resolution Plan. 5. Waiver of statutory dues and other claims. 6. Extinguishment of claims and abatement of legal proceedings. 7. Approval of the addendum to the Resolution Plan. Issue-Wise Detailed Analysis: 1. Approval of the Resolution Plan: An application was moved by the Resolution Professional for the approval of a Resolution Plan under Section 30(6) of the Insolvency & Bankruptcy Code, 2016. The Tribunal approved the Resolution Plan submitted by the Successful Resolution Applicant, which was approved by 84.36% of the Committee of Creditors (CoC). 2. Compliance with Procedural Requirements: The Tribunal noted that all procedural requirements under the Insolvency & Bankruptcy Code, 2016, and related regulations were complied with. This included the constitution of the Committee of Creditors, public announcements, and the submission of claims by creditors. The Resolution Professional also prepared an Information Memorandum and appointed valuers to determine the Fair Value and Liquidation Value of the Corporate Debtor. 3. Treatment of Claims: The Resolution Plan provided a detailed treatment of claims from various categories of creditors: - Financial Creditors: Claims admitted amounted to ?17,28,28,11,914. The plan proposed payments to non-related financial creditors and minimal payments to related financial creditors. - Operational Creditors: Claims admitted amounted to ?7,90,16,89,100. Full payment was proposed to non-related operational creditors, while related party operational creditors were to receive minimal payments. - Workmen and Employees: Claims admitted amounted to ?1,14,95,484, with full payment proposed. - Statutory Liabilities: No payments were proposed for unadmitted statutory creditors. 4. Implementation and Supervision: The Resolution Plan included detailed steps for implementation and supervision: - Incorporation of BidCo: A special purpose vehicle to be formed for implementing the plan. - Reconstitution of Share Capital: The plan proposed a reduction and consolidation of share capital. - Merger of BidCo with Corporate Debtor: The plan included a reverse merger. - Issuance of Optionally Convertible Debentures (OCDs): To the Resolution Applicant. - Delisting of Corporate Debtor: Steps for delisting from stock exchanges were outlined. - Monitoring Committee: A committee was to be formed to supervise the implementation until the transfer date. 5. Waiver of Statutory Dues and Other Claims: The Tribunal allowed the waiver of outstanding statutory dues and other claims, referencing judgments from other benches which supported such waivers to facilitate the successful implementation of the Resolution Plan. 6. Extinguishment of Claims and Abatement of Legal Proceedings: The Tribunal approved the extinguishment of all claims and the abatement of related legal proceedings, including criminal proceedings, to ensure that the Resolution Applicant is not held responsible for any outstanding dues or claims for the period before the commencement of the Corporate Insolvency Resolution Process (CIRP). 7. Approval of Addendum to the Resolution Plan: An addendum to the Resolution Plan dated February 16, 2019, was submitted and accepted by the CoC. This addendum addressed certain aspects of the plan, including the treatment of claims from Connect Residuary Pvt Ltd and the implementation schedule. Conclusion: The Tribunal approved the Resolution Plan, including the addendum, noting that it complied with all procedural requirements and provided a feasible and viable solution for the revival of the Corporate Debtor. The plan included provisions for the treatment of various creditor claims, implementation steps, and supervision mechanisms. The Tribunal also granted waivers for statutory dues and extinguished all pre-CIRP claims and legal proceedings. The Resolution Professional was directed to hand over all records and premises to the Resolution Applicant to finalize the further line of action.
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