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2018 (9) TMI 55 - Tri - Insolvency and BankruptcyCorporate insolvency process - seeking approval of the Resolution Plan - Held that - Resolution Plan has been unanimously approved by the CoC and has been submitted in compliance of Section 30 of the Code for approval. Resolution Professional has confirmed that the Resolution Plan is compliant to sub-section (a) to (f) of Section 30(2) of the Code and also comply Regulation 38 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Besides there is no objection from any stake holders in respect of approval of the resolution Plan. In absence of any discrimination or perverse decision it is not open to the Adjudicating Authority to modify the Plan. Adjudicating Authority is not expected to substitute its view with the unanimous commercial wisdom of the CoC nor should deal with technical complexity and merits of Resolution Plan unless it is found contrary to the express Provisions of law and goes against the public interest. Admittedly the revival of the corporate debtor company would certainly enhance the interest of all the stakeholders and is in the line to achieve the object of the Code. In view of the finding that the resolution plan, as unanimously approved by the CoC, is in accordance with the sub-section 2 of section 30 read with section 31 of the Code and as the Resolution Applicant is not disqualified under Section 29A of the Code and as no infirmity seems to have brought out upon screening of the Resolution Plan; we hereby approve the Resolution Plan under sub-section (1) of section 31 of the Code.
Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with Section 30(2) of the Insolvency and Bankruptcy Code, 2016. 3. Provisions for effective implementation of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. Detailed Analysis: 1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016: The application was filed by the Resolution Professional seeking approval of the Resolution Plan for the corporate debtor, which was duly approved by the Committee of Creditors (CoC). The Resolution Plan was placed on record and reviewed by the Tribunal. The corporate debtor had filed for Corporate Insolvency Resolution Process (CIRP) due to its financial distress and cessation of operations since 2015. 2. Compliance with Section 30(2) of the Insolvency and Bankruptcy Code, 2016: - Payment of Insolvency Resolution Process Costs: The Resolution Plan allocated ?80 Lakhs for CIRP costs, to be paid in priority to other debts, satisfying Section 30(2)(a). - Payment to Operational Creditors: The Plan allocated ?6.16 crores for workers, classified as operational creditors, ensuring compliance with Section 30(2)(b). - Management of Corporate Debtor: The Plan outlined the management structure post-approval, with the Resolution Applicants acquiring 90% ownership and appointing three directors, fulfilling Section 30(2)(c). - Implementation and Supervision: The Plan included a Monitoring Committee for supervision, meeting the requirements of Section 30(2)(d). - Legal Compliance: The Resolution Professional certified that the Plan did not contravene any laws and complied with the Insolvency and Bankruptcy Code and relevant regulations, addressing Section 30(2)(e) and (f). 3. Provisions for Effective Implementation of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016: - Objective and Management: The Resolution Plan aimed to settle liabilities and resume production. The management structure and shareholding details were clearly outlined, ensuring effective implementation. - Monitoring Committee: A Monitoring Committee was established for supervision, ensuring the Plan's effective implementation. - Reliefs and Concessions: The Plan sought various waivers and concessions, which were to be pursued with respective authorities as per legal provisions. - Resolution Professional’s Certification: The Resolution Professional confirmed that the Plan provided for the term, implementation schedule, and management control, and met all legal requirements. Conclusion: The Tribunal found that the Resolution Plan met all the requirements of Section 30(2) and had provisions for effective implementation as mandated by Section 31(1). The Plan was unanimously approved by the CoC, and no objections were raised by stakeholders. The Tribunal approved the Resolution Plan under Section 31(1), declaring it binding on all stakeholders and lifting the moratorium order. The Resolution Professional was directed to forward all records to the Insolvency and Bankruptcy Board of India (IBBI). Orders: - The Resolution Plan is approved and binding on the corporate debtor, its members, employees, creditors, and other stakeholders. - The moratorium order ceases to have effect. - The Resolution Professional shall forward all records to IBBI. The application was disposed of accordingly.
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