2020 (9) TMI 1196 - Tri - Companies Law

Approval of Resolution Plan - section 30(6) of IBC, 2016 read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Process of Corporate Persons) Regulations, 2016 - HELD THAT - On going through the Resolution Plan submitted by M/s. Invent Assets Securitisation and Reconstruction Pvt Ltd which satisfies the threshold approval by 60% voting right of the CoC. 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. Further, in case of non-compliance of this order or withdrawal of Resolution Plan by the Resolution Applicant, the CoC shall forfeit the EMD amount paid by the Resolution Applicant. The Resolution Plan submitted by M/s. Invent Assets Securitisation and Reconstruction Pvt Ltd. is hereby APPROVED - Application allowed.

Summary

Issues Involved:
1. Confirmation and approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code (IBC), 2016.
2. Transfer of the case to the Kochi Bench of NCLT.
3. Appointment and actions undertaken by the Interim Resolution Professional (IRP).
4. Submission and approval process of the Resolution Plan.
5. Background of the Corporate Debtor and Resolution Applicant.
6. Reliefs sought under the Resolution Plan.
7. Financial and operational restructuring of the Corporate Debtor.
8. Implementation and supervision of the Resolution Plan.
9. Directions and orders issued by the Tribunal.

Detailed Analysis:

1. Confirmation and Approval of the Resolution Plan:
The Resolution Professional (RP) filed a Miscellaneous Application under Section 30(6) of the IBC, 2016, read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Process of Corporate Persons) Regulations, 2016, seeking confirmation and approval of the Resolution Plan approved by the Committee of Creditors (CoC) for Palm Lagoon Backwater Resorts Private Limited.

2. Transfer of the Case to Kochi Bench:
The Asset Reconstruction Company (India) Limited (Financial Creditor) initiated the Corporate Insolvency Resolution Process (CIRP) against Palm Lagoon Backwater Resorts Private Limited by filing an application before the NCLT, Chennai Bench. The case was later transferred to the Kochi Bench of NCLT, which has jurisdiction over Kerala and Lakshadweep Union Territory.

3. Appointment and Actions Undertaken by the IRP:
Mr. R. Velu was appointed as the Interim Resolution Professional (IRP) on 20.09.2019. The IRP published the public announcement of CIRP, constituted the Committee of Creditors (CoC), and appointed two valuers to determine the liquidation value of the Corporate Debtor.

4. Submission and Approval Process of the Resolution Plan:
The CoC instructed the Resolution Professional to invite Expressions of Interest (EoIs) from prospective Resolution Applicants. An EoI was received from Invent Assets Securitisation and Reconstruction Private Limited, which submitted a binding resolution plan. The CoC approved the Resolution Plan with 100% voting rights in its eleventh meeting.

5. Background of the Corporate Debtor and Resolution Applicant:
Palm Lagoon Backwater Resorts Private Limited was established in 2002 with the objective of managing lodging houses, hotels, motels, and resorts. Invent Assets Securitisation and Reconstruction Company Private Limited, incorporated in 2003, is engaged in the business of acquiring and resolving non-performing financial assets of banks and financial institutions.

6. Reliefs Sought Under the Resolution Plan:
The Resolution Applicant sought various reliefs, including:
- Approval of the Resolution Plan under Section 31(1) of the IBC.
- Continuation of the Resolution Professional's role until the Resolution Plan is implemented.
- Appointment of a monitoring committee.
- Declaration of certain attachments to the land property as null and void.
- Condone the delay in filing the petition due to COVID-19.

7. Financial and Operational Restructuring of the Corporate Debtor:
The Resolution Plan proposed:
- Upfront payment of CIRP costs.
- Payment of ?87.77 lakhs to creditors within 15 days.
- Issuance of new equity shares to the Resolution Applicant.
- Infusion of funds for the maintenance and operation of the resort.
- Restructuring of the capital by canceling existing shares and issuing new shares to the Resolution Applicant.

8. Implementation and Supervision of the Resolution Plan:
The Tribunal permitted the appointment of a monitoring committee to oversee the implementation of the Resolution Plan. The Resolution Professional was directed to hand over all records, premises, and documents to the Resolution Applicant.

9. Directions and Orders Issued by the Tribunal:
The Tribunal approved the Resolution Plan submitted by Invent Assets Securitisation and Reconstruction Private Limited, making it binding on the Corporate Debtor and other stakeholders. The moratorium imposed under Section 14 ceased to have effect. The Resolution Professional was directed to submit records to the Insolvency and Bankruptcy Board of India and return them to the Resolution Applicant or new promoters. The Tribunal granted liberty to file any Miscellaneous Application if required for the implementation of the Resolution Plan.

Conclusion:
The Tribunal approved the Resolution Plan submitted by Invent Assets Securitisation and Reconstruction Private Limited, ensuring the revival of Palm Lagoon Backwater Resorts Private Limited. The Resolution Plan included financial restructuring, issuance of new equity shares, and infusion of funds for the resort's operation. The Tribunal's order made the Resolution Plan binding on all stakeholders and directed the necessary steps for its implementation.