2021 (2) TMI 1379 - Tri - Insolvency and Bankruptcy

Seeking initiation of CIRP against the corporate debtor - Compliance with requirements of the Code and Regulations made thereunder or not - Whether the requirements of the Code and Regulations made thereunder, have been complied with or not? - HELD THAT - The successful resolution applicants confirmed by way of their respective affidavits (Annexure A-45) that they are not disqualified under Section 29A of the Code to submit a resolution plan or under any other law applicable, which further shows that the resolution plan conforms to the provisions of the law for the time being in force and did not contravene any such provision. The RP in the Form H referred above, has certified the same - the resolution plan fulfills all the requirements of Regulation 38 and 39 of the CIRP Regulations. A perusal of Regulation 38 would clearly show that by virtue of mandatory contents of resolution plan as discussed in the preceding paragraphs in relation to Section 30 and Section 31 of the Code, the requirement of Regulation 38 also stands fulfilled. Even the requirement of Regulation 39 has been satisfied, as the RP has submitted that the resolution plan of Resolution applicant, as approved by the Committee of Creditors, to this Tribunal along with the compliance certificate in Form H, as per the requirements of Regulation 39(4) of the CIRP Regulations meets all the requirements of the Code and the CIRP Regulations and that the resolution plan has been duly approved by the Committee of Creditors. The Resolution plan is accepted. Seeking impleadment of the applicant - seeking approval of the resolution plan, on the ground that its rights are likely to be affected by the resolution plan approved by the COC, as it may prescribe the scaling down of the amounts to be paid to the operational creditors, including the applicant - HELD THAT - The resolution plan dated 19.08.2020 along with addendum dated 30.09.2020, as approved by the COC satisfies all the requirements of the Code and Regulations made thereunder, no further orders are required in the instant application and accordingly, the same is dismissed. Applications disposed off.

Summary

Issues Involved:
1. Initiation and continuation of Corporate Insolvency Resolution Process (CIRP)
2. Compliance with the Insolvency and Bankruptcy Code (IBC) and related regulations
3. Approval and implementation of the resolution plan
4. Impleadment applications by operational creditors

Summary:

1. Initiation and Continuation of CIRP:
The State Bank of India filed CP (IB) No. 114/Chd/Pb/2017 u/s 7 of the Code for initiating CIRP against SEL Manufacturing Company Limited. The Tribunal admitted the petition on 11.04.2018 and declared a moratorium. The corporate debtor challenged this order, but the Hon'ble High Court and the Supreme Court did not grant a stay. The IRP was appointed, and despite various legal challenges, the CIRP continued, with periods of stay being excluded from the CIRP timeline.

2. Compliance with IBC and Related Regulations:
The Tribunal examined the resolution plan in light of mandatory requirements u/s 30(2) of the Code. The plan provided for:
- Payment of insolvency resolution process costs in priority (Section 30(2)(a)).
- Payments to operational creditors as per Section 30(2)(b).
- Management of the corporate debtor post-approval (Section 30(2)(c)).
- Implementation and supervision mechanisms (Section 30(2)(d)).
- Compliance with existing laws (Section 30(2)(e)).
The RP certified compliance with all relevant regulations, including Regulation 39(4) of the CIRP Regulations.

3. Approval and Implementation of the Resolution Plan:
The resolution plan submitted by the Consortium of ARR ESS Industries Private Limited and Leading Edge Commercial FZE was approved by the Committee of Creditors (COC) with a 96.90% majority. The Tribunal found that the plan met all statutory requirements and did not contravene any laws. The plan was binding on all stakeholders, and the moratorium order ceased to have effect. The RP was directed to forward all CIRP records to IBBI.

4. Impleadment Applications by Operational Creditors:
IA No. 772/2020 and IA No. 773/2020 were filed by operational creditors seeking impleadment in IA No. 703/2020. Both applications were dismissed as the Tribunal found that the approved resolution plan satisfied all requirements of the Code and Regulations, rendering further orders unnecessary.

Orders:
- The resolution plan was approved and made binding on all stakeholders.
- The moratorium order ceased to have effect.
- The RP was instructed to forward CIRP records to IBBI.
- IA No. 703/2020 was disposed of, and IA Nos. 772/2020 & 773/2020 were dismissed.