2019 (12) TMI 1595 - Tri - Insolvency and Bankruptcy

Approval of Resolution Plan - section 31(1) of the IBC, 2016 - discharge or provide immunity from all the liabilities/Disputes/proceedings/penalties/suits/attachments/cases whether civil or criminal filed against the Corporate Debtor whether accounted/known or not on payment of the agreed consideration by Resolution Applicant - approval for waiver of Cost of transfer if any payable under respective statues - HELD THAT - Section 30(6) of the Code enjoins the resolution professional to submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority. Section 31 of the Code deals with the approval of the resolution plan by the Adjudicating Authority, if it is satisfied that the resolution plan as approved by the committee of creditors under section 30(4) meets the requirements as referred to in section 30(2) - the Resolution Plan includes a statement under regulation 38(lA) of the CIRP Regulations as to how it has dealt with the interest of the stakeholders in compliance with the Code and Regulations thereunder. The 'Resolution Plan' filed with the Application meets the requirements of Section 30(2) of the I B Code, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. The 'Resolution Plan' is also not in contravention of any of the provisions of Section 29A. Hence, this Adjudicating Authority is satisfied that the Resolution Plan is in accordance with Law - the Resolution Plan approved shall not construe any waiver to any statutory obligations/liabilities arising out of the approved Resolution Plan and same shall be dealt in accordance with the appropriate Authorities as per relevant Laws. Application disposed off.

Summary

Issues Involved:
1. Approval of the Resolution Plan under Section 31(1) of the IBC, 2016.
2. Discharge or immunity from liabilities for the Corporate Debtor.
3. Waiver of cost of transfer related to Shares, Immovable, and Movable properties.
4. Compliance with legal and procedural requirements under the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Approval of the Resolution Plan under Section 31(1) of the IBC, 2016:
The Tribunal considered the application for approval of the Resolution Plan, which was approved by the Committee of Creditors (CoC) with 100% voting rights. The Resolution Plan outlined payments to stakeholders, including Insolvency Resolution Process Costs, Workmen dues, Operational Creditors, Secured Financial Creditors, and Statutory Dues. The plan proposed a phased payment schedule and detailed the management and control of the Corporate Debtor during the implementation period. The Tribunal observed that the Resolution Plan met the requirements of Section 30(2) of the IBC, 2016, and Regulations 37, 38, 38(1A), and 39(4) of the IBBI (CIRP) Regulations, 2016. The plan was found to be in accordance with the law and was approved, making it binding on all stakeholders.

2. Discharge or immunity from liabilities for the Corporate Debtor:
The Resolution Plan included provisions for the discharge or immunity from all liabilities, disputes, proceedings, penalties, suits, attachments, and cases against the Corporate Debtor upon payment of the agreed consideration by the Resolution Applicant. The Tribunal noted that upon approval of the Plan, any and all rights and entitlements of actual or potential creditors over the Corporate Debtor would be permanently extinguished. However, it clarified that the approved Resolution Plan shall not constitute any waiver of statutory obligations/liabilities, which must be dealt with by the appropriate authorities as per relevant laws.

3. Waiver of cost of transfer related to Shares, Immovable, and Movable properties:
The Resolution Plan sought approval for the waiver of costs related to the transfer of shares, immovable, and movable properties of the Corporate Debtor in favor of the Resolution Applicant. The Tribunal did not explicitly address this request in the final judgment, implying that such waivers would be subject to approval by the concerned authorities as per relevant laws.

4. Compliance with legal and procedural requirements under the Insolvency and Bankruptcy Code, 2016:
The Tribunal examined the compliance of the Resolution Plan with the legal and procedural requirements under the IBC, 2016. The Resolution Professional confirmed that the plan adhered to all provisions of the law, including Section 30(2)(a) to 30(2)(f) of the IBC, 2016, and Regulations 38(1), 38(1)(a), 38(2)(a), 38(2)(b), 38(2)(c), and 38(3) of the CIRP Regulations. The identity of the Resolution Applicants was verified, and an affidavit under Section 30(1) was obtained, confirming their eligibility under Section 29A of the IBC, 2016. The CoC approved the plan unanimously, considering its feasibility and viability. The Tribunal also referenced the Supreme Court's judgment in K Sashidhar Vs. Indian Overseas Bank & Others, emphasizing that the adjudicating authority's discretion is limited to ensuring compliance with Section 30(2).

Conclusion:
The Tribunal approved the Resolution Plan, finding it compliant with the IBC, 2016, and CIRP Regulations. The plan is binding on all stakeholders and does not waive statutory obligations, which must be addressed by relevant authorities. The moratorium under Section 14 of the IBC, 2016, ceased to have effect from the date of the order. The Resolution Professional was directed to supervise the implementation of the plan and report to the Tribunal periodically.