2022 (1) TMI 1292 - Tri - Insolvency and Bankruptcy

Approval of the Resolution Plan - section 30(6) read with section 31(1) of the Insolvency and Bankruptcy Code, 2016 and regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) - HELD THAT - The Resolution Plan has been approved with 100% voting share. As per the CoC, the plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the plan effective after approval by this Bench. The Resolution Plan is in accordance with sections 30 and 31 of the IBC and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. No circumstances exist that militate against grant of approval for the Resolution Plan. As far as the question of granting time to comply with the statutory obligations/seeking sanctions from governmental authorities is concerned, the Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code. The resolution is approved - Resolution Plan as approved is binding on the Corporate Debtor and other stakeholders involved so that the revival of the Corporate Debtor can come into force with immediate effect - moratorium shall cease to have effect. Application allowed.

Summary

Issues Involved:
1. Approval of the Resolution Plan under Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016.
2. Constitution of the Committee of Creditors (CoC).
3. Collation of claims from creditors.
4. Compliance with statutory provisions.
5. Details of the Resolution Plan and Payment Schedule.
6. Management, implementation, and reliefs as per the Resolution Plan.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed by the Resolution Professional (RP) of Hail Tea Limited under Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan. Initially, the Resolution Professional noted unequal payments to Operational Creditors, prompting the Successful Resolution Applicant (SRA) to file an affidavit proposing equal proportionate payments. The revised Resolution Plan was subsequently approved by the CoC.

2. Constitution of Committee of Creditors (CoC):
The Interim Resolution Professional (IRP) made a public announcement and called for claims from creditors. The CoC was constituted with five Financial Creditors, with only UCO Bank having voting rights. A total of eight CoC meetings were held during the CIRP period.

3. Collation of Claims:
The claims from financial and operational creditors were collated, with the admitted amounts being ?14,43,30,743 for Secured Financial Creditors, ?7,44,95,600 for Financial Creditors (related party), and ?3,63,50,932 for Operational Creditors.

4. Compliance with Statutory Provisions:
The RP issued invitations for Expressions of Interest (EoI) twice, receiving five EoIs in response. Three resolution plans were received, and the CoC approved the plan of M. Sharma with 100% voting share. The RP filed a Compliance Certificate in Form ‘H’, ensuring adherence to the Code and CIRP Regulations.

5. Details of the Resolution Plan and Payment Schedule:
The Resolution Plan proposed payments to various creditors, including ?35,00,000 for CIRP Costs, ?10,00,00,000 for Secured Financial Creditors, and amounts for Operational Creditors, Employees, and Workmen. The total proposed payment was ?12,71,35,402.

6. Management, Implementation, and Reliefs:
The Resolution Plan included clauses for the management of the Corporate Debtor post-resolution, implementation and supervision, and reliefs sought by the Resolution Applicant. The Tribunal granted some reliefs, such as relinquishment of liabilities to related parties and contingent liabilities to be paid from the Applicant’s investment. However, it did not grant waivers for guarantees provided by Directors/Third Parties.

Conclusion:
The Tribunal approved the Resolution Plan dated 03.11.2020, revised on 10.09.2021, as it complied with Sections 30 and 31 of the IBC and Regulations 38 and 39 of the CIRP Regulations. The plan is binding on the Corporate Debtor and other stakeholders. The moratorium under Section 14 ceased, and the RP was discharged from duties, with the Resolution Applicant gaining access to the Corporate Debtor’s records and premises. The Resolution Applicant was directed to comply with statutory obligations within one year. The application was disposed of accordingly.