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2020 (10) TMI 1305 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - Sections 31 (1), 60 (5), of the Insolvency and Bankruptcy Code, 2016, R/w Regulation 39 of the Insolvency and Bankruptcy Board of India (CIRP) Regulations, 2016 - HELD THAT - All necessary compliances are made - Resolution Applicant has submitted an Affidavit stating that he is not disqualified under the provisions of Section 29A. The Resolution Plan provides payment of the CIRP Cost, in priority to the payment of other creditors (secured or unsecured), operational creditors, and workmen for employees on approval of the Plan by CoC. The CIRP Cost shall be included in the price offered for the other stakeholders. The payment of CIRP cost shall be made to the Resolution Professional within 30 days from the date of approval of the Resolution Plan by this Authority - The Resolution Plan provides for the payment of ₹ 50 Lakhs to the Operational Creditor - there is no dissenting Financial Creditor. The Resolution Plan provides for reconstitution of the board of the Corporate Debtor for managing its affairs. The Resolution Plan provides that the implementation of the plan shall be jointly supervised by the Monitoring Committee - The Resolution Plan fulfils all the condition prescribed under Regulation 38(3) - the Resolution Applicant has paid 5% of the Resolution Plan amount through Demand Draft - As per the CoC, not required. The Resolution Plan is hereby approved which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors, statutory authorities and other stakeholders involved in the Resolution Plan including the Resolution Applicant - While approving the Resolution Plan, as mentioned above, it is clarified that the Resolution Applicant shall pursuant to the Resolution Plan approved under Section 31(1) of the IBC, 2016, obtain all the necessary approval as may be required under any law for the time being in force within a period of one year from the date of approval of the Resolution Plan by this authority or within such period as provided for under such law - the order of moratorium passed by this Adjudicating Authority under Section 14 of the IBC, 2016 shall cease to have effect from the date of passing of this Order. Application allowed.
Issues Involved:
1. Approval of the Resolution Plan under Sections 31(1) and 60(5) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with the Insolvency and Bankruptcy Code, 2016, and relevant regulations. 3. Distribution of payment to creditors. 4. Evaluation of the Resolution Plan against liquidation value. 5. CIRP costs and their prioritization. 6. Implementation and supervision of the Resolution Plan. 7. Concessions and waivers requested by the Resolution Applicant. 8. Compliance with Section 29A of the IBC. 9. Compliance with Section 30(2) of the IBC and relevant regulations. Detailed Analysis: 1. Approval of the Resolution Plan: The Resolution Professional, Mr. Manish Agarwal, submitted the Resolution Plan approved by the Committee of Creditors (CoC) and sought its approval under Sections 31(1) and 60(5) of the IBC, 2016, read with Regulation 39 of the CIRP Regulations, 2016. The Tribunal approved the Resolution Plan, making it binding on all stakeholders, including the Corporate Debtor, its employees, members, creditors, and statutory authorities. 2. Compliance with IBC and Relevant Regulations: The Resolution Plan was evaluated for compliance with Section 30(2) of the IBC, 2016, and relevant regulations. The Resolution Professional confirmed that the Plan met all requisite conditions, including the submission of Form-H and evidence of receipt of performance security. 3. Distribution of Payment to Creditors: The Resolution Plan proposed a total payment of ?4.5 Crore, with ?4 Crore allocated to the Financial Creditor (SASF - IDBI Bank Ltd) and ?50 Lakhs to the Operational Creditor (Noida SEZ). These payments were to be made within 30 days of the Plan's approval. 4. Evaluation Against Liquidation Value: The Resolution Plan offered ?4.5 Crore, which exceeded the Liquidation Value of ?4.25 Crores but was below the Average Fair Value of ?6.10 Crores. The Tribunal noted that the amount offered was more than the Liquidation Value, thus satisfying one of the critical requirements. 5. CIRP Costs and Prioritization: The Resolution Plan provided for the full payment of CIRP costs in priority to all other creditors. These costs were to be paid within 30 days of the Plan's approval. 6. Implementation and Supervision: The Plan outlined the formation of a Monitoring Committee comprising representatives from the Financial Creditor, the Resolution Applicant, and the Resolution Professional. This committee was tasked with supervising the implementation of the Plan. 7. Concessions and Waivers: The Plan included various concessions and waivers, such as the withdrawal of all inquiries, investigations, and proceedings related to the Corporate Debtor. It also allowed the Corporate Debtor to carry forward accumulated business losses and unabsorbed depreciation. 8. Compliance with Section 29A of the IBC: The Resolution Applicant submitted an affidavit confirming that neither they nor any connected person was disqualified under Section 29A of the IBC. The Tribunal verified this compliance as part of the approval process. 9. Compliance with Section 30(2) of the IBC and Relevant Regulations: The Resolution Plan complied with all the requirements set out in Section 30(2) of the IBC and relevant regulations. This included the payment of CIRP costs, addressing the interests of all stakeholders, and ensuring the Plan's feasibility and viability. Conclusion: The Tribunal approved the Resolution Plan submitted by the Resolution Professional, making it binding on all involved parties. The moratorium order ceased to have effect from the date of this Order, and the Resolution Professional was directed to forward all records to the IBBI. The approved Resolution Plan became effective immediately, and the Resolution Professional was instructed to send a copy of the Order to all participants and the Resolution Applicant.
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