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2022 (2) TMI 1254 - Tri - Insolvency and BankruptcySeeking approval of Resolution Plan - Section 30(6) of Insolvency and Bankruptcy Code 2016 - HELD THAT - From the catena of judgments rendered by the Supreme Court on the scope of approval of the Resolution Plan it is amply made clear that only limited judicial review is available for the Adjudicating Authority under Section 30(2) and Section 31 of IBC 2016 and this Adjudicating Authority cannot venture into the commercial aspects of the decisions taken by the Committee of Creditors - reliance can be placed in the case of K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS 2019 (2) TMI 1043 - SUPREME COURT . It is also satisfying that the Resolution Plan is in accordance with sections 30 and 31 of IBC 2016. Thus the Resolution Plan is hereby approved and is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under section 14 of IBC 2016 shall not have any effect henceforth. In case of non-compliance of this order or withdrawal of Resolution Plan the performance guarantee amount already paid by the Resolution Applicant shall stand forfeited in addition to the Resolution Applicant being liable for any other action as per law. Application allowed.
Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016). 2. Objections to the Resolution Plan by various parties, including the Resolution Professional (RP) of Regen Infrastructure Services Private Limited (RISPL), customers of RISPL, and other creditors. 3. Compliance with the procedural aspects and mandatory requirements under IBC, 2016. 4. Reliefs and concessions sought by the Resolution Applicant in the Resolution Plan. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan: The application under adjudication was filed by the Resolution Professional for the Corporate Debtor, seeking approval of the Resolution Plan submitted by Renew Power Services Limited. The Resolution Plan was approved by the Committee of Creditors (CoC) in its 13th meeting held on 03.04.2021 with a 94.08% voting share. 2. Objections to the Resolution Plan: a) Objections by RP of RISPL: - The RP of RISPL argued that the proposed Resolution Plan is prejudicial to public interest and against well-settled principles of law, potentially destroying the business of RISPL, a subsidiary of RPPL. - The RP emphasized that the businesses of RPPL and RISPL are intertwined and inter-connected, and the Resolution Plan could negatively impact RISPL's operations, employees, and customers. - Specific objections included the potential termination of business operations, revocation of intellectual property rights, and adverse effects on public customers and employees. b) Objections by Customers of RPPL: - Customers claimed to be Operational Creditors and argued that they were not given proper representation in the CoC meetings as required under Section 24(3) of IBC, 2016. - They raised concerns about the lack of transparency regarding the subsidiaries of the Corporate Debtor and the treatment of cash accruals and profits earned during the Corporate Insolvency Resolution Process (CIRP). - They also objected to the retrenchment process of workmen and the publication of the Expression of Interest (EOI) in Form G. c) Objections by TVH Energy Resources Pvt. Ltd.: - TVH Energy, an Operational Creditor of RISPL, argued that the Resolution Plan proposes to sever ties with subsidiaries, undermining long-standing contractual obligations and potentially pushing them into CIRP. - They contended that the Resolution Plan does not maximize the value of group assets and treats the Resolution Process as a mode of acquisition and asset sale, rather than ensuring the Corporate Debtor remains a going concern. 3. Compliance with Procedural Aspects and Mandatory Requirements: - The RP filed the Compliance Certificate in Form H, indicating that the fair value and liquidation value of the Corporate Debtor were Rs. 189,38,04,819/- and Rs. 137,12,08,408/-, respectively. - The Resolution Plan complied with the mandatory requirements under Section 30(2) of IBC, 2016, including payment of insolvency and resolution costs, repayment of debts to Operational Creditors, and management of the Corporate Debtor's affairs post-approval. - The CoC approved the Resolution Plan with a 94.08% voting share, fulfilling the requirement of Section 30(4) of IBC, 2016. 4. Reliefs and Concessions Sought by the Resolution Applicant: - The Resolution Applicant sought various reliefs and concessions, including the continuation of business continuity contracts, termination of certain customer contracts, and immunity from actions and penalties for non-compliance with applicable laws. - The Tribunal granted these reliefs subject to the provisions of IBC, 2016, and other applicable laws. Findings of the Tribunal: - The Tribunal dismissed the objections raised by the Operational Creditors, noting that they lacked locus standi as they were customers and not creditors of RPPL or RISPL. - The Tribunal also dismissed the objections raised by the RP of RISPL, reiterating its earlier decision that consolidation of CIRP for RPPL and RISPL was not warranted. - The Tribunal found that the Resolution Plan complied with the requirements of IBC, 2016, and approved it, making it binding on the Corporate Debtor and other stakeholders. - The Tribunal emphasized that its role was limited to ensuring compliance with Section 30(2) of IBC, 2016, and it could not interfere with the commercial wisdom of the CoC. Conclusion: The Tribunal approved the Resolution Plan submitted by Renew Power Services Limited, dismissing the objections raised by various parties. The Resolution Plan complied with the mandatory requirements under IBC, 2016, and the reliefs and concessions sought by the Resolution Applicant were granted, subject to applicable laws. The Tribunal reiterated the limited scope of its judicial review, emphasizing the commercial wisdom of the CoC in approving the Resolution Plan.
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