2017 (12) TMI 336 - Tri - Insolvency and Bankruptcy

Corporate insolvency procedure - Held that - The Operational Creditor who has initiated this Insolvency Proceeding has also sent mail to the Corporate Debtor for closing the Insolvency Proceeding. Other operational creditors whose claim was submitted to the resolution professional, i.e. Poonam Enterprises Pvt. Ltd. has also settled the matter with the corporate debtor and accepted the post-dated cheques on account of the settlement of dues to the corporate debtor. Therefore, it is clear that operational creditors claim has been settled with the corporate debtor and financial creditor Punjab National Bank itself has certified that accounts of the corporate debtor are classified in their books of accounts as a standard asset. So, in this condition it is clear that no debt is outstanding as on today on the corporate debtor and Committee of Creditors with 100% own shares has made a recommendation for closing the Insolvency Proceedings. Given the resolution passed by Committee of Creditors Resolution Plan submitted by the Resolution Professional deserves to be accepted. The Resolution Plan submitted by Shri Arun Kumar Gupta as approved by the Committee on Creditors is at this moment accepted, and insolvency proceeding is closed accordingly.

Summary

Issues:
1. Approval of Resolution Plan under Section 30(4) of the Insolvency and Bankruptcy Code, 2016.
2. Closure of Corporate Insolvency Resolution Process.
3. Financial and operational status of the Corporate Debtor.
4. Settlement of claims by operational creditors.
5. Certification by financial creditor regarding the standard asset status of the Corporate Debtor.

Issue 1: Approval of Resolution Plan under Section 30(4) of the Insolvency and Bankruptcy Code, 2016:
The Operational Creditor filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, which was admitted. The Insolvency Resolution Professional submitted a Progress Report stating that only one claim from a Financial Creditor, Punjab National Bank (PNB), was received, along with claims from operational creditors, which were settled. The Resolution Plan presented by the Corporate Debtor's CEO was detailed, showcasing financial strength and future cash flow projections. The Committee of Creditors, with Punjab National Bank holding 100% voting share, approved the Resolution Plan without modifications. The Resolution Professional confirmed no other Resolution Plan was received, and stakeholders' interests were safeguarded.

Issue 2: Closure of Corporate Insolvency Resolution Process:
The Committee of Creditors resolved to recommend closing the Corporate Insolvency Resolution Process for the Corporate Debtor. The Resolution Plan was certified by the Resolution Professional and Punjab National Bank, ensuring compliance with the Insolvency and Bankruptcy Code, 2016, and related regulations. The Resolution Plan's approval by the National Company Law Tribunal, Kolkata, was deemed binding on all stakeholders involved.

Issue 3: Financial and operational status of the Corporate Debtor:
The Committee analyzed the Corporate Debtor's financial position, concluding it was stable with no imminent insolvency risk. The Resolution Plan detailed the Corporate Debtor's financial and operational strength, assuring creditors' dues would be settled without default. The current management was to continue overseeing the business, with Punjab National Bank supervising the Resolution Plan's implementation for the next 12 months.

Issue 4: Settlement of claims by operational creditors:
Operational creditors, including Parker Hannifin India Pvt. Ltd. and Poonam Enterprise, settled their claims to satisfaction. The Resolution Professional received communications from operational creditors expressing no objection to closing the insolvency proceedings, indicating settlements reached. The Resolution Plan ensured all operational creditors, even those with acknowledged debts, would be paid in the normal course of business.

Issue 5: Certification by financial creditor regarding the standard asset status of the Corporate Debtor:
Punjab National Bank, the sole financial creditor with a 100% share in the Committee of Creditors, certified the Corporate Debtor's account as a standard asset with no defaults. The Resolution Plan's acceptance was supported by the financial creditor's certification and settlements reached with operational creditors, leading to the Committee's recommendation for closing the Insolvency Proceedings.

In conclusion, the Resolution Plan submitted by the Resolution Professional was approved, and the Corporate Insolvency Resolution Process was closed based on the Committee of Creditors' resolution and the financial and operational stability of the Corporate Debtor.