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2020 (3) TMI 1394 - Tri - Insolvency and BankruptcySeeking approval of the Resolution Plan - HELD THAT - This Adjudicating Authority understands and appreciates the purpose and spirits of Insolvency of Bankruptcy Code, 2016 keeping in view, ease of doing business, includes ease of take over and implementation of Resolution Plan, flexibility and finality of all problems. So that Resolution applicant shall focus on implementing the plan, strengthen the company in all spheres. If that space is not provided, if earlier litigations and liability continues, it will only burden and likely to pull down the company. The survival and to succeed in market, needs clean slate. In the tough market scenario, the race and survival of each company is very tough, it is like running a continues marathon race. However, strong the player be, if huge liabilities are on its shoulders, it is not possible to run effectively. The successful resolution plan is fair and equitable and has taken the interest of all the stake holders. All the mandatory regulations are complied with. The Resolution Plan submitted by M/s. Arcelor Mittal India Private Limited, the Resolution Applicant, approved by 100 % of voting in the 8th Committee of Creditor's Meeting held on 06.12.2019 is APPROVED as per Section 31(1) of the Insolvency and Bankruptcy Code, 2016. Accordingly, the same shall be binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, any State Governments, or any local authority, guarantors and other stakeholders - Application allowed.
Issues Involved:
1. Approval of the Resolution Plan under the Insolvency and Bankruptcy Code, 2016. 2. Compliance with mandatory provisions under Section 30(2) and Regulation 38 of the CIRP Regulations. 3. Objections and applications against the approval of the Resolution Plan. 4. Eligibility of the Resolution Applicant under Section 29A of the Insolvency and Bankruptcy Code, 2016. 5. Distribution of payments to creditors and allegations of discrimination. Issue-Wise Detailed Analysis: 1. Approval of the Resolution Plan: The application was filed by the Resolution Professional under Section 30(6) read with Section 31(1) of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan. The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated by an order dated 14.05.2019. The Resolution Plan submitted by M/s. Arcelor Mittal India Private Limited was approved by 100% voting in the 8th Committee of Creditors meeting held on 06.12.2019. 2. Compliance with Mandatory Provisions: The Resolution Plan includes all mandatory contents as laid down under Section 30(2) of the Code and Regulation 38 of the CIRP Regulations. It provides for the payment of Insolvency Resolution Process costs, operational creditors' debts, and dissenting financial creditors' debts. It also includes provisions for the management and control of the Corporate Debtor, implementation and supervision of the plan, and compliance with all relevant laws. 3. Objections and Applications Against Approval: Several applications were filed against the approval of the Resolution Plan, including CA(IB) No. 13/CTB/2020 by an unsuccessful Resolution Applicant, which was withdrawn. SREI Infrastructure Finance Limited, a financial creditor, filed CA(IB) No. 12/CTB/2020 and CA(IB) No. 194/CTB/2019, seeking to reject the Resolution Plan. The objections included allegations of discrimination in the distribution of payments and the inability to continue claims against personal guarantors. 4. Eligibility of the Resolution Applicant: The Resolution Applicant confirmed its eligibility under Section 29A of the Insolvency and Bankruptcy Code, 2016. The Resolution Applicant and its nominees were to hold 100% of the shares of the Corporate Debtor. 5. Distribution of Payments to Creditors: The Resolution Plan proposed equal distribution of principal dues to all financial creditors, which was challenged by SREI Infrastructure Finance Limited as discriminatory. The Tribunal held that equal distribution is "fair and equitable" and does not constitute discrimination. The plan was found to be in compliance with Section 30(2) of the Code and aimed at the maximization of asset value. Conclusion: The Tribunal concluded that the relief sought in CA(IB) No. 194/CTB/2019 and CA(IB) No. 12/CTB/2020 should be rejected. The successful resolution plan was deemed fair and equitable, taking into account the interests of all stakeholders and complying with all mandatory regulations. The Resolution Plan submitted by M/s. Arcelor Mittal India Private Limited was approved as per Section 31(1) of the Insolvency and Bankruptcy Code, 2016, and was binding on all parties involved. The application CA (IB) No. 188/CTB/2019 was allowed, and the Registry was directed to communicate the order to the relevant parties.
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