2021 (9) TMI 1353 - Tri - Insolvency and Bankruptcy

Seeking revision of timelines for payment to various creditors - issuance of NOC to the Resolution Applicant so that it can transfer the existing shares of the CD in its favour - direction to members of the Monitoring Agency to provide support to the applicant to reconstitute the Board of the Directors of the Corporate Debtor in order to expedite the implementation of the approved Resolution Plan - seeking direction for the smooth implementation of the Resolution Plan by all concerned - HELD THAT - At this stage, this Adjudicating Authority cannot be compelled to direct the financial creditors to negotiate a modification to the Resolution Plan. This is in line with the decision of the Hon'ble Supreme Court dated 23.02.2021 in Committee of Creditors of Amtek Auto v Dinkar T Venkatasubramaniam 2021 (2) TMI 1051 - SUPREME COURT , Evert taking the case of the successful resolution applicant at its highest, it can only explain that part of the resolution plan which deals with generation of revenues from the use of the corporate debtor's diagnostic equipment. It does not explain why the successful resolution applicant did not bring in the funds from external sources to revamp the corporate debtor as per the resolution plan. This only goes to show that the successful resolution applicant is hedging its bets. The present application is only to reagitate practically the same issues which were once considered by this Adjudicating Authority and orders passed on 12.04.2021., directing the successful resolution applicant to make the outstanding payments under the approved resolution plan by 30.06.2021. The conduct of the successful resolution applicant is completely lacking in bona fides . It is an attempt to arm-twist the Adjudicating Authority into acceding to its request for a direction to the financial creditors to what would practically be a renegotiation of the terms of the resolution plan. This Adjudicating Authority is of the view that although the Resolution Applicant has grossly failed in meeting its commitments in respect of implementation of the Resolution Plan, liquidation is the last resort when all other available options fail in the CIRP. In the interest of all the stakeholders and also the implementation of the Resolution Plan, after considering all the facts and circumstances of the case, this Adjudicating Authority allows one last opportunity to the Resolution Applicant to fulfil all its commitment and financial obligations stated in the Resolution Plan by 31.10.2021 failing which actions as may be deemed appropriate as per law, shall be taken - Resolution Applicant is directed to submit a Weekly Progress Report in implementation of the Resolution Plan in the Registry. Application disposed off.

Summary

Issues Involved:
1. Revision of payment timelines to creditors.
2. Issuance of NOC by Axis Bank for share transfer.
3. Support from the Monitoring Agency for reconstitution of the Board of Directors.
4. Smooth implementation of the Resolution Plan.
5. Ex-parte ad interim order for maintaining status quo.

Issue-wise Detailed Analysis:

1. Revision of Payment Timelines to Creditors:
The Resolution Applicant, Tricounty Premier Hearing Services Inc., sought to revise the payment timelines to various creditors as per the approved Resolution Plan. The applicant highlighted the delays in payments and requested an extension. The Tribunal acknowledged the applicant’s efforts but noted significant lapses and non-compliance with previous orders. Despite the pandemic, the default occurred before its onset. The Tribunal granted a final extension till 31.10.2021 for the Resolution Applicant to meet its commitments.

2. Issuance of NOC by Axis Bank for Share Transfer:
The Resolution Applicant requested Axis Bank to issue a No Objection Certificate (NOC) to facilitate the transfer of shares of the Corporate Debtor. The shares were in dematerialized form and pledged with Axis Bank. The Tribunal recognized the necessity of the NOC for the transfer but did not issue a specific directive to Axis Bank within this order.

3. Support from the Monitoring Agency for Reconstitution of the Board of Directors:
The applicant sought support from the Monitoring Agency to reconstitute the Board of Directors of the Corporate Debtor. The Tribunal acknowledged the applicant’s efforts to appoint new directors but noted the "ACTIVE Non-Complaint" status of the Corporate Debtor, which hindered the process. The Tribunal directed all stakeholders to cooperate fully with the Resolution Applicant to ensure successful implementation of the Resolution Plan.

4. Smooth Implementation of the Resolution Plan:
The applicant requested directions for the smooth implementation of the Resolution Plan. The Tribunal noted the applicant’s partial compliance and efforts, including payments made towards CIRP costs and other dues. However, the Tribunal emphasized the applicant’s failure to meet the financial obligations fully and directed the Resolution Applicant to submit weekly progress reports on the implementation of the Resolution Plan.

5. Ex-parte ad interim order for maintaining status quo:
The applicant sought an ex-parte ad interim order to maintain the status quo regarding the Corporate Debtor during the pendency of the application. The Tribunal did not explicitly address this request in the final order, focusing instead on the extension and compliance requirements.

Conclusion:
The Tribunal granted a final extension to the Resolution Applicant till 31.10.2021 to fulfill all commitments under the Resolution Plan. The Resolution Applicant was directed to submit weekly progress reports, and all stakeholders were instructed to cooperate fully. The Tribunal emphasized that liquidation would be considered only as a last resort if the Resolution Applicant failed to comply. The connected matters were kept in abeyance and scheduled for consideration on 01.11.2021.