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2019 (10) TMI 1475 - Tri - Insolvency and BankruptcySeeking approval of the Resolution Plan - condonation of delay in adoption of the Resolution Plan by the Committee of Creditors - HELD THAT - Section 53 of the Code lists the priorities to be given to the beneficiaries of liquidation value of the assets of the Corporate Debtor. The provisions of Section 53 make it amply clear that Operational Creditors are at the end of the list of beneficiaries as the Secured Financial Creditors have edge over the others. This Adjudicating Authority would like to make it clear to the public at large that approval of the Resolution Plan by NCLT does not mean automatic waiver or abetment of any legal proceedings which are pending by or against the Company/Corporate Debtor as those are the subject matter of the concerned Competent Authorities having their proper/own jurisdiction to pass any appropriate order as the case may be. The Resolution Applicant on approval of the Plan may approach those Competent Authorities/Courts/Legal Forums/Offices - Govt. or Semi Govt./State or Central Govt. for appropriate relief(s) sought for in Chapter 18 Other Reliefs Sought - of the Resolution Plan execution of proceedings against the Corporate Debtor Company for actions occurring on or before the date of approval of the Resolution Plan by this Adjudicating Authority. The approved Resolution Plan shall come into force with immediate effect - Application allowed.
Issues Involved:
1. Approval of the Resolution Plan under Section 30 of the Insolvency and Bankruptcy Code, 2016. 2. Exclusion of certain periods from the Corporate Insolvency Resolution Process (CIRP) duration. 3. Reduction of the claim amount of a Secured Financial Creditor. 4. Compliance of the Resolution Plan with statutory requirements. 5. Payment distribution to various creditors and stakeholders. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan under Section 30 of the Insolvency and Bankruptcy Code, 2016: The Resolution Professional (RP) submitted the Resolution Plan from Safire Technologies Pvt. Ltd. for approval. The plan was initially received within the prescribed time but delayed due to negotiations for upward revision and modifications. The Committee of Creditors (CoC) approved the plan with 90.09% voting. The RP confirmed that the plan met the criteria under Section 30(2) of the IB Code and submitted the Compliance Certificate in Form H. The plan was found to comply with the necessary statutory requirements and was approved by the Adjudicating Authority. 2. Exclusion of certain periods from the Corporate Insolvency Resolution Process (CIRP) duration: The RP filed I.A. No. 160 of 2019 to exclude the period from 31.08.2018 to 22.10.2018 from the CIRP duration. The CIRP was initiated on 26.04.2018 and extended by 90 days on 23.10.2018. The extended period expired on 22.01.2019. The exclusion was sought due to the time consumed in disposing of I.A. No. 340 of 2018. The Adjudicating Authority granted the exclusion of 53 days, citing settled law and precedents from NCLT/NCLAT in ArcelorMittal. 3. Reduction of the claim amount of a Secured Financial Creditor: I.A. No. 402 of 2019 was filed by ARCIL, a Secured Financial Creditor, whose claim was reduced from ?6.05 crores to ?0.79 crores. During the hearing, ARCIL's lawyer stated that they had no further reservations if the Resolution Plan was approved. Consequently, I.A. No. 402 of 2019 was disposed of. 4. Compliance of the Resolution Plan with statutory requirements: The RP provided a detailed table showing compliance with various sections and regulations, including Section 30(2) and Regulation 38 of the IBBI. The plan addressed payment of insolvency resolution process costs, debts of operational creditors, management of the Corporate Debtor, implementation, and supervision of the plan. The RP confirmed that the Resolution Applicant was eligible under Section 29A and that the plan did not contravene any laws. 5. Payment distribution to various creditors and stakeholders: The Resolution Plan proposed a total payment of ?14.21 crores to Secured Financial Creditors, including Axis Bank, IDBI Bank, Bank of Maharashtra, and ARCIL. The plan outlined the payment schedule and distribution among these creditors. No payment was proposed for Unsecured Financial Creditors and related parties. Operational Creditors were to receive no payment, as the liquidation value was presumed insufficient to cover even Secured Financial Creditors. Employees and Workmen were to receive ?28.25 lacs in full settlement. Statutory dues were clarified to be extinguished by the approval of the Resolution Plan. Conclusion: The Adjudicating Authority approved the Resolution Plan, confirming its compliance with Section 30(2) and Section 31 of the IB Code. The plan aimed to maximize the value of assets and balance the interests of all stakeholders. The approval did not imply automatic waiver of any pending legal proceedings, which remained subject to the jurisdiction of competent authorities. The Resolution Plan was to come into immediate effect, subject to existing laws and necessary approvals within one year. The RP was directed to forward all records to the Insolvency and Bankruptcy Board of India. Any pending IAs were deemed infructuous and disposed of.
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