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2019 (11) TMI 1660 - Tri - Insolvency and BankruptcyApproval 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) 2016 - HELD THAT - The Resolution Professional has provided his certificate in Form H under Regulation 39(4) of the CIRP Regulations; the same is duly perused by this Bench. All the compliances have been done by the RP. The two valuers, namely RBSA Advisors and Rakesh Narula Co. have been appointed to assess the Liquidation Value and Fair Market Value of the Corporate Debtor. RBSA Advisors have ascertained the Fair Market Value to be (Rs.) 1379.88 Crore and the Liquidation Value is stated to be (Rs.) 786 Crore. Rakesh Narula Co. have calculated the Fair Market Value to be (Rs.) 1394.54 Crore and Liquidation Value to be (Rs.) 891.96 Crore as per the valuation reports annexed in the Application. It is stated that the average of two Liquidation values is less than the amount being received under the Resolution Plan. Hence, one of the justifications for approval of the Resolution Plan that the Liquidation Value is less compared to the Resolution proposals made in the Resolution Plan is satisfied. 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 Resolution Plan in hand satisfies the minimum threshold of approval by 66% majority of the CoC. The Resolution Applicant is not barred under section 29A of the I B Code to file the resolution plan. 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 Plan as approved by CoC is hereby approved - Applicant allowed.
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. 3. Evaluation and approval of the Resolution Plan by the Committee of Creditors (CoC). 4. Consideration of objections raised by Arcelor Mittal India Private Limited (AMIPL). 5. Compliance with Section 29A of the Insolvency & Bankruptcy Code, 2016. 6. Proposal for payment to Financial Creditors. 7. Proposal for payment to Operational Creditors. 8. Proposal for payment to Employees and Workmen. 9. Implementation and supervision of the Resolution Plan. 10. Request for concessions, reliefs, and dispensations. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan under Section 30(6) of the Insolvency & Bankruptcy Code, 2016: The application was moved by the Resolution Professional invoking Section 30(6) for approval of the Resolution Plan submitted by Royale Partners Investment Fund Limited (RPIFL). The Resolution Plan had the due approval of the CoC and was submitted for the Tribunal's approval under Section 31(1) of the Code. 2. Compliance with the procedural requirements of the Insolvency & Bankruptcy Code, 2016: The Financial Creditor IDBI Bank Ltd. filed a petition against the Corporate Debtor EPC Constructions India Ltd. under Section 7 of the Code. The petition was admitted, and Mr. Abhijit Guhathakurtha was appointed as the Interim Resolution Professional (IRP) and later confirmed as the Resolution Professional (RP). The RP published invitations for Expression of Interest and created a Virtual Data Room for potential resolution applicants. The CoC approved the process document and evaluation criteria for evaluating the Resolution Plans. 3. Evaluation and approval of the Resolution Plan by the Committee of Creditors (CoC): The CoC received two Resolution Plans from RPIFL and AMIPL. The plan from RPIFL was initially rejected due to non-submission of Earnest Money Deposit but was later modified and approved by the CoC with a 73.17% voting share. The Letter of Intent was issued to RPIFL. 4. Consideration of objections raised by Arcelor Mittal India Private Limited (AMIPL): AMIPL filed a miscellaneous application being aggrieved by the CoC's decision to reject its resolution plan. The application was rejected as the CoC found AMIPL's plan unsatisfactory on merits and technicalities. The Tribunal held that the non-furnishing of the approval from CCI was not a bar for the CoC or the RP to consider a resolution plan. 5. Compliance with Section 29A of the Insolvency & Bankruptcy Code, 2016: RPIFL submitted an affidavit confirming its eligibility to submit a Resolution Plan under Section 29A of the Code. The RP also submitted Form H stating that the resolution plan complied with the provisions of the Code. 6. Proposal for payment to Financial Creditors: The Resolution Plan proposed an upfront consideration of INR 420 Crores to be paid to the Financial Creditors within 30 Business Days and a Deferred Consideration in the form of NCDs of a cumulative face value of INR 480 Crores, repayable within five years. 7. Proposal for payment to Operational Creditors: The plan stated that the Liquidation Value payable to the Operational Creditors was expected to be NIL, and therefore, they would not be entitled to receive any payment. The Admitted Workmen and Employees Dues were to be paid out of the infusion by the Resolution Applicant into the SPV/Corporate Debtor. 8. Proposal for payment to Employees and Workmen: The plan provided for the payment of INR 1.74 Crores to Workmen and Employees. Any additional workmen dues admitted until the Approval Date would be paid out of the Upfront Consideration. 9. Implementation and supervision of the Resolution Plan: The plan provided for the management of the Corporate Debtor's affairs and the implementation and supervision of the plan. The RP submitted that the plan dealt with the interests of all stakeholders and provided for the necessary approvals and timelines for implementation. 10. Request for concessions, reliefs, and dispensations: The Resolution Applicant sought various concessions, reliefs, and dispensations, including waivers of past tax dues, exemptions from export obligations, and relief from outstanding statutory dues. The Tribunal granted these reliefs in view of precedents set by other benches, emphasizing the need for successful implementation of the Resolution Plan. Conclusion: The Tribunal approved the Resolution Plan submitted by RPIFL, subject to the conditions and reliefs sought. The plan was found to be compliant with the provisions of the Insolvency & Bankruptcy Code, 2016, and aimed at the revival of the Corporate Debtor. The "Moratorium" imposed under Section 14 ceased to have effect, and the Resolution Professional was directed to hand over all records to the Resolution Applicant.
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