2021 (11) TMI 1037 - Tri - Insolvency and Bankruptcy

Seeking for approval of the Resolution Plan - Section 30(6) and Section 31 of the Insolvency, and Bankruptcy Code, 2016 read with Regulation 39 (4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT - In compliance of Regulation 38(1 A) of the CIRP Regulations, it has been set out in the Resolution Plan, that the Plan operates in best interest of all the stakeholders, as the Financial Creditors are being paid the best optimum value attributed to them and employment opportunities will be generated once the full-fledged operations of the Corporate Debtor starts - All the taxes, liabilities or obligations payable to, claims, assessments, counter claims, etc., shall stand irrevocably waived on the Resolution Plan being approved by the Tribunal. The Resolution Plan submitted by the Resolution Applicant is found to be meeting all the requirements of the IBC, 2016 and more importantly Section 30 (2) of the IBC Code and Regulation 38 (1A) and applicable CIRP Regulations. It does not contravene any of the provisions of law. It caters to the interest of all the Stakeholders. In K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS 2019 (2) TMI 1043 - SUPREME COURT the Hon'ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon'ble Court observed that the role of the NCLT is 'no more and no less'. The Hon'ble Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan as approved by the requisite percent of voting share of financial creditors. The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39 (4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved - Application allowed.

Summary

Issues:
Approval of the Resolution Plan under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39 (4) of the IBBI Regulations.

Detailed Analysis:

1. The Resolution Professional (RP) was appointed by the Tribunal and filed an application seeking approval of the Resolution Plan under relevant sections of the Insolvency and Bankruptcy Code, along with the necessary regulations.

2. The RP took charge of the Corporate Debtor's management and control after visiting the manufacturing plant and office. Despite multiple extensions granted for submission of Expression of Interest (EoI), no EoI was received by the specified dates.

3. The RP received requests for further extensions from interested parties, leading to modifications in the submission deadlines and processes as per the decisions of the Committee of Creditors (CoC).

4. The Resolution Applicant submitted the Plan after several revisions, with modifications approved by the CoC in various meetings, including adjustments in performance security terms.

5. The Resolution Plan was evaluated and approved by the CoC in a meeting, with specific discussions on the requirements of the CIRP Regulations and the interests of stakeholders.

6. The approved Resolution Plan outlined detailed financial proposals, settlement amounts, payment schedules, and operational terms, including the transfer of management control to the Resolution Applicant.

7. The Resolution Plan addressed various aspects such as settlement of creditors, operational details, liabilities release clauses, and compliance with applicable regulations to ensure stakeholder interests were safeguarded.

8. The judgment referenced legal precedents to emphasize the limited scope of judicial review in approving Resolution Plans once approved by the CoC, highlighting the adherence to statutory requirements and non-contravention of relevant provisions.

9. The Tribunal approved the Resolution Plan, making it binding on all relevant parties, directing necessary amendments to the Memorandum and Articles of Association, and lifting the moratorium under the Insolvency and Bankruptcy Code.

10. The Applicant was tasked with overseeing the Plan's implementation, providing regular updates to the Tribunal, forwarding records to the regulatory body, and notifying all concerned parties about the Order's approval, thereby concluding the matter.

This detailed analysis covers the key aspects and legal considerations involved in the judgment regarding the approval of the Resolution Plan under the specified sections and regulations of the Insolvency and Bankruptcy Code, 2016.