2019 (11) TMI 1694 - Tri - Insolvency and Bankruptcy

Seeking approval of the Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016, read with Regulation 39(4) of the IBBI (Insolvency Resolution Process of Corporate Person) Regulations 2016 - HELD THAT - By virtue of mandatory contents of resolution plan, the same is in accordance with Section 30 and 31 of the Code, and also complies with the requirement of the Regulations 38 and 39 of CIRP Regulations. On perusal of the resolution plan, this Bench being satisfied with the valuation given by the registered valuers, estimation of turnover during the resolution period, repayment schedule to the creditors both secured and unsecured and the approval of resolution plan as approved by the CoC with 100% voting, approves the resolution plan with a condition that the Resolution Applicant shall make the additional payment towards non-moving statutory liability as undertaken. The Resolution Applicant in its resolution plan, has dealt with interests of all stakeholders of the Corporate Debtor, including the Financial Creditors, the Operational Creditors and the CIRP cost - the resolution plan has necessary provisions for its effective implementation. Resolution plan approved - application allowed.

Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016.
2. Reconsideration of voting by a CoC member.
3. Appointment and actions of the Interim Resolution Professional (IRP) and Resolution Professional (RP).
4. Valuation of assets and invitation for bids.
5. Submission and evaluation of the Resolution Plan.
6. Payment terms to stakeholders including secured and unsecured financial creditors, operational creditors, workmen, employees, farmers, and statutory dues.
7. Security for payment to farmers.
8. Compliance with the provisions of the Insolvency and Bankruptcy Code and CIRP Regulations.
9. Implementation and supervision of the Resolution Plan.
10. Discharge of the Resolution Professional from duties.

Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed by the Resolution Professional under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan, which was approved by the Committee of Creditors (CoC) with 71.32% voting initially and later unanimously after reconsideration by one member.

2. Reconsideration of Voting by a CoC Member:
After the Ninth CoC meeting, a CoC member, M/s ED & F Man Commodities India Pvt. Ltd., reconsidered their decision and changed their vote from 'descent' to 'ascent', leading to unanimous approval of the Resolution Plan.

3. Appointment and Actions of IRP and RP:
The Corporate Debtor was put under Insolvency Resolution Process by an order dated 22.02.2019, appointing Mr. Vishram Narayan Panchpor as the IRP, who was later replaced by the applicant as the RP. The RP issued public announcements, invited claims, and appointed valuers for asset valuation.

4. Valuation of Assets and Invitation for Bids:
The RP appointed two registered valuers and published an Expression of Interest (EOI) for inviting prospective bids. Only one bid was received from M/s Shri Dutt India Private Limited, which was shared with the CoC after obtaining a confidentiality undertaking.

5. Submission and Evaluation of the Resolution Plan:
The draft Request for Resolution Plan (RFRP) was approved by the CoC, and the Resolution Applicant submitted a Performance Bank Guarantee and the Resolution Plan, which was evaluated by the Resolution Process Advisor. The plan was presented in the Seventh CoC meeting, and after further improvements, it was approved in the Ninth meeting.

6. Payment Terms to Stakeholders:
The Resolution Plan provided detailed payment terms to various stakeholders, including secured financial creditors, unsecured financial creditors, operational creditors, workmen, employees, farmers, and statutory dues. Specific terms and timelines were outlined for each category.

7. Security for Payment to Farmers:
The plan included a cash component and allotment of cumulative preference shares for farmers. The Tribunal emphasized timely and fair compensation for farmers and suggested additional security measures. The Resolution Applicant proposed bank guarantees to secure payments to farmers, ensuring their interests are protected.

8. Compliance with Provisions of IBC and CIRP Regulations:
The Resolution Plan complied with Sections 30 and 31 of the Insolvency and Bankruptcy Code and Regulations 38 and 39 of CIRP Regulations. It addressed the cause of default, feasibility, viability, and effective implementation.

9. Implementation and Supervision of the Resolution Plan:
The management and control of the Corporate Debtor would be handed over to the Resolution Applicant's Board of Directors. A core committee was formed to supervise the implementation, including representatives from various stakeholders.

10. Discharge of the Resolution Professional:
Upon approval of the Resolution Plan, the RP was discharged from duties, and the records were to be submitted to the Insolvency and Bankruptcy Board of India. The moratorium granted at the time of admission was vacated.

Conclusion:
The Tribunal approved the Resolution Plan with modifications, emphasizing fair compensation to farmers and compliance with legal requirements. The plan is binding on all stakeholders, and the RP was discharged from duties upon approval.

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