2018 (9) TMI 1395 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - Resolution Plan approval - Held that - An affidavit swearing that the resolution applicant is not disqualified as per the amended section 29A of the I & B Code has been annexed. The Resolution Professional also certified that the Resolution Applicant is not ineligible to submit a Resolution Plan under Section 29A of the I & B Code. The mandatory disclosure seen enclosed. Workmen dues and employees dues agreed to be paid within 30 days of the date of approval of the Resolution Plan. No infirmity seems to have brought out upon screening of the Resolution Plan and, therefore, the Resolution Plan submitted being meets all the requirement to be satisfied under Section 30(2) of the I & B Code the Adjudicating Authority has no other alternative other than to approve the Resolution Plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stake holders involved in the Resolution Plan. (i)The Resolution Plan of Shri Ram Residency Private Limited, which is approved by the CoC with 99.67 voting percentage, is hereby approved under provisions of sub-section (1) of Section 31 of the Insolvency and Bankruptcy Code, 2016, which will be binding on the Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan. (ii) The revival plan of the company in accordance with the approved Resolution Plan shall come into force with immediate effect. (iii) The moratorium order passed under Section 14 shall cease to have effect. (iv) The Resolution Professional shall forward all records relating to the conduct of the Corporate Insolvency Resolution Process and the Resolution Plan to the Insolvency and Bankruptcy Board of India to be recorded on its database.

Issues:
Approval of Resolution Plan under I & B Code, 2016

Detailed Analysis:
1. Background: The case involved an application filed under Section 30(6) read with Section 31 of the Insolvency and Bankruptcy Code, 2016 (I & B Code) for the approval of a Resolution Plan approved by the Committee of Creditors (CoC) with a substantial vote share.

2. Admission of C.P.: The Adjudicating Authority admitted the Corporate Petition filed by the financial creditor under Section 7 of the I & B Code, appointing an Interim Resolution Professional (IRP) subsequently.

3. Corporate Insolvency Resolution Process (CIRP): The IRP diligently conducted the CIRP, inviting claims from creditors, constituting the CoC, and overseeing the submission and evaluation of Resolution Plans by interested parties.

4. Resolution Plan Evaluation: Out of the entities expressing interest, two were rejected under Section 29A, some withdrew, and others did not participate. Ultimately, two Resolution Plans were considered, with the plan of the H-l bidder receiving approval by the CoC.

5. Legal Challenge: A legal challenge arose from the H-2 bidder regarding the selection process, leading to a series of legal proceedings culminating in a ruling by the National Company Law Appellate Tribunal (NCLAT) upholding the CoC's decision.

6. Approval Process: Following the NCLAT's decision, the CoC convened meetings to finalize the Resolution Plan, which was eventually approved by a significant majority of financial creditors.

7. Judicial Review: The Resolution Professional and other parties submitted arguments supporting the approval of the Resolution Plan within the statutory timeline, citing relevant legal precedents and compliance with procedural requirements.

8. Resolution Plan Details: The Resolution Plan submitted by Shri Ram Residency Private Limited, a subsidiary of a Real Estate Developer, was thoroughly examined, indicating the applicant's capability to manage the stressed assets of the corporate debtor effectively.

9. Approval Decision: The Adjudicating Authority approved the Resolution Plan, binding all stakeholders involved, with specific observations regarding statutory liabilities and exemptions sought by the Resolution Applicant.

10. Final Orders: The Adjudicating Authority issued orders approving the Resolution Plan, directing the immediate implementation of the revival plan, lifting the moratorium, and transferring relevant records to the Insolvency and Bankruptcy Board of India.

In conclusion, the judgment addressed the approval of a Resolution Plan under the I & B Code, emphasizing compliance with legal procedures, stakeholder interests, and the financial viability of the proposed plan.

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