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2020 (2) TMI 1533 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - Coc has already approved the plan - interference with the commercial wisdom of CoC - HELD THAT - It is noticed that in the plan, provision is made of certain sum of money to pay the operational debts. We make it clear that while making distribution of the said amount, the Monitoring Committee shall observe provisions of section 53 of IBC and will pay the amount in proportionate to each of the operational creditors. We also make it clear that in case, the RP/Monitoring Committee receives some contribution from the directors of the corporate debtor or from related parties upon conclusion of enquiry of sections 43, 45, 50 and 60 of IBC, that amount shall be paid to each creditor in proportionate of its dues. In this case, the CoC has approved the plan. We do not wish to challenge CoC's commercial wisdom used while approving the plan. If we to do so, then we will be leaving with no option but to pass order of liquidation of the corporate debtor and such order would be in conflict with object of the Code, i.e. Resolution is the first and liquidation is later. Resolution Professional has certified that the plan does not contravene any provisions of law. Upon our perusal of the resolution plan, we are also of the considered opinion that the plan does not contravene any provisions of law for the time being in force - the Resolution Plan of M/s. EDCL Infrastructure Ltd., which is approved by the CoC with more than 74% voting share is hereby approved under provisions of section 31(1) of the Insolvency Bankruptcy Code, 2016, which will be binding on the Corporate Debtor- M/s. Tantia Constructions Ltd., its employees, members, creditors, coordinators and other stakeholders involved in the Resolution Plan. The plan is approved.
Issues:
1. Application under section 7 of the Insolvency & Bankruptcy Code, 2016 by State Bank of India against M/s. Tantia Constructions Limited for default in payment. 2. Admission of Corporate Debtor in Corporate Insolvency Resolution Process (CIRP) and appointment of Interim Resolution Professional. 3. Submission and approval of resolution plan by Committee of Creditors (CoC). 4. Examination of resolution plan by the Tribunal under section 31 of the I&B Code. 5. Compliance of resolution plan with the requirements of section 30(2) of the I&B Code. 6. Approval of the resolution plan by the Tribunal. Issue 1: Application under section 7 of the Insolvency & Bankruptcy Code The State Bank of India filed an application against M/s. Tantia Constructions Limited for defaulting on a financial debt, leading to the initiation of Corporate Insolvency Resolution Process (CIRP) under section 7 of the Insolvency & Bankruptcy Code, 2016. Issue 2: Admission of Corporate Debtor in CIRP Following the application, the Corporate Debtor was admitted into CIRP, and an Interim Resolution Professional was appointed to oversee the process. The Interim Resolution Professional called for creditors to submit their claims, leading to the formation of the Committee of Creditors (CoC). Issue 3: Submission and Approval of Resolution Plan After receiving claims from creditors, the CoC held meetings to discuss and approve a resolution plan submitted by EDCL Infrastructure Ltd. The plan was approved by 74.34% votes of the CoC, and the Tribunal was presented with the plan for approval under section 31(a) of the I&B Code. Issue 4: Examination of Resolution Plan by the Tribunal The Tribunal examined the resolution plan in light of the provisions of section 30(2) of the I&B Code, ensuring compliance with requirements such as payment of resolution process costs, debt of operational creditors, management modalities, and legal conformity. Issue 5: Compliance with Section 30(2) Requirements The Tribunal found that the resolution plan adequately addressed the requirements of section 30(2) of the I&B Code, including provisions for payment of operational debts, management post-approval, and adherence to legal provisions and regulations. Issue 6: Approval of the Resolution Plan Considering the CoC's approval and commercial wisdom, the Tribunal approved the resolution plan of EDCL Infrastructure Ltd. for M/s. Tantia Constructions Ltd., as it met the necessary legal criteria and did not contravene any provisions of the law. In conclusion, the Tribunal approved the resolution plan submitted by EDCL Infrastructure Ltd., which was endorsed by the CoC, ensuring compliance with the Insolvency & Bankruptcy Code provisions and securing the revival of the company, M/s. Tantia Constructions Ltd. The Tribunal appreciated the efforts of the Resolution Professional in facilitating the approval of the plan, marking a significant step towards resolving the insolvency proceedings.
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