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2021 (1) TMI 1245 - Tri - Companies LawSeeking approval of the Resolution plan - revival of the Corporate Debtor - HELD THAT - The facts and circumstances, clearly established that the revised Resolution Plan dated 03.08.2020 submitted by Koncept Shelters, Resolution Applicant, was approved by the Committee of Creditors for Fortuna Buildcon (India) Pvt Ltd. It also provides for the appointment of a Monitoring committee consisting of the Applicant, two representatives from the secured Financial Creditors and one representative of the Resolution Applicant to effectively supervise the implementation of the plan from the date of approval date. The Applicant has filed Form H and also an affidavit by confirming all the requisite procedure under the extant provisions of law have been followed. It is settled position of law that Tribunal cannot interfere the commercial wisdom of COC in taking decision to approve the Resolution plan, unless arbitrary exercise of power is alleged to have been resorted to. The Promoter of Corporate Debtor has also participated in the Resolution process and its Resolution plan has been rejected by COC. The Resolution Plan in question is in compliance with the object and extant provisions of Code and the rules made there under, and thus it is fit to be approved under Section 31(1) of the IBC, 2016. Petition disposed off.
Issues Involved:
1. Approval of the Resolution Plan under Sections 30(6), 31, and 60 of the I&B Code, 2016. 2. Compliance with the I&B Code and CIRP Regulations. 3. Voting and approval by the Committee of Creditors (COC). 4. Rejection of the Resolution Plan submitted by the Corporate Debtor. 5. Implementation and supervision of the approved Resolution Plan. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan under Sections 30(6), 31, and 60 of the I&B Code, 2016: The application was filed by the Resolution Professional (RP) seeking approval for the Resolution Plan submitted by Koncept Shelters. The RP requested that the plan be declared binding on the Corporate Debtor and its stakeholders, including employees, members, creditors, and authorities. 2. Compliance with the I&B Code and CIRP Regulations: The RP followed the necessary procedures under the I&B Code and CIRP Regulations, including issuing public announcements, preparing a list of creditors, and inviting expressions of interest (EOI). The RP ensured that the Resolution Plan complied with all provisions of the I&B Code and did not contravene any laws. The RP also verified the eligibility of the Resolution Applicant under Section 29A of the Code. 3. Voting and approval by the Committee of Creditors (COC): The COC approved the Resolution Plan submitted by Koncept Shelters with a 95.07% positive vote. The plan was discussed and modified as per the COC's suggestions before being put to vote. The homebuyers, as part of the COC, also cast their votes, with 96.56% approving the plan. The RP conducted the voting process in compliance with Regulation 26 of the CIRP Regulations. 4. Rejection of the Resolution Plan submitted by the Corporate Debtor: The Corporate Debtor submitted a combined resolution plan for itself and two other group companies, which was rejected by the COC. The COC found the plan non-compliant with the Code and expressed concerns about the Corporate Debtor's eligibility under Section 29A. The COC voted overwhelmingly (98.12%) to reject the Corporate Debtor's plan. 5. Implementation and supervision of the approved Resolution Plan: The approved Resolution Plan included provisions for the management of the Corporate Debtor after approval, effective implementation, and supervision. A Monitoring Committee was proposed to oversee the implementation, comprising the RP, representatives from secured financial creditors, and a representative of the Resolution Applicant. The plan also detailed the manner of fulfilling obligations to secured financial creditors, homebuyers, and other stakeholders. Conclusion: The Tribunal approved the Resolution Plan submitted by Koncept Shelters, declaring it binding on all stakeholders. The moratorium imposed earlier ceased to have effect, and the RP was directed to hand over management control to the Resolution Applicant. The Tribunal emphasized that it could not interfere with the COC's commercial wisdom unless there was an arbitrary exercise of power. The application filed by the Corporate Debtor against the rejection of its plan was dismissed. The Tribunal concluded that the approved Resolution Plan complied with the I&B Code and CIRP Regulations, ensuring the revival of the Corporate Debtor and maximization of asset value while addressing creditors' interests.
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