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2019 (9) TMI 675 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - default in repayment of Debt - funding of Resolution Plan - HELD THAT - Resolution plan is approved subject to that the dissenting FC even though a related party shall be paid the principal amount due and as agreed before this Tribunal by the Resolution applicant before payment is made to the equity shareholders as contemplated under the resolution plan - Further in relation to the transactions as brought to the notice of this Tribunal by Ld. RP in CA No. 58 of 2018 cannot be easily brushed aside and if true cannot be also condoned and hence OBC being the sole financial creditor in the CoC and being part of the Monitoring Agency shall cause a detailed investigation to be made, transaction wise of the Corporate Debtor and bring to the notice of this Tribunal factoring the reply of the Corporate Debtor and all the respondents of any acts of the nature of transactions brought forth by the RP in the above said application. The implementing and supervision authority shall have also the authority to bring to the notice of this Tribunal any deviation from the resolution plan including in relation to the losses, which may have occasioned due to the conduct of the promotors of the Corporate Debtor prior to the initiation of the CIRP as against it - The moratorium imposed under Section 14 shall cease to have any effect henceforth.
Issues Involved:
1. Approval of the resolution plan under Section 30(6) and Section 31 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016. 2. Claims and objections raised by the Financial Creditor against the resolution plan. 3. Preferential and other transactions under Sections 43, 45, 50, and 66 of the Insolvency and Bankruptcy Code, 2016. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan: The application was filed by the Resolution Professional (RP) of the Corporate Debtor for approval of the resolution plan under Section 30(6) and Section 31 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The process began with the appointment of the Interim Resolution Professional (IRP) and the constitution of the Committee of Creditors (CoC) with Oriental Bank of Commerce (OBC) as the sole member having 100% voting share. The CoC approved the resolution plan in its 9th meeting held on 30.01.2019. The salient features of the resolution plan included payments to various creditors, including CIRP costs, operational creditors, secured financial creditors, and unsecured financial creditors. The RP confirmed that the resolution applicant met the eligibility criteria and provided an affidavit confirming their eligibility under Section 29A of the IBC, 2016. 2. Claims and Objections Raised by the Financial Creditor: The Financial Creditor filed IA No. 57/JPR/2019 and IA No. 58/JPR/2019, expressing grievances that their claim was not admitted in full by the RP. The RP responded that despite repeated requests, no evidence was provided for the agreed rate of interest claimed by the Financial Creditor. The RP justified the non-admission of the interest claim as it was beyond the three-year period under the Limitation Act applicable to IBC, 2016. The Tribunal noted that the related parties being Financial Creditors were categorized and dealt with uniformly in the resolution plan without discrimination, and their objections were dismissed. 3. Preferential and Other Transactions: The RP filed IA No. 58/JPR/2018, bringing to the notice of the Tribunal about transactions under Sections 43, 45, 50, and 66 of the IBC, 2016. The RP did not press for the application’s disposal seriously, and the CoC, considering commercial wisdom, approved the resolution plan despite the alleged transactions. The Tribunal directed the Monitoring Agency, including OBC, to investigate these transactions and report back within three months. The decision on IA No. 58/JPR/2018 was kept in abeyance pending this investigation. Conclusion: The Tribunal approved the resolution plan with specific directions: 1. The dissenting Financial Creditor, although a related party, shall be paid the principal amount due before payments to equity shareholders. 2. OBC, as part of the Monitoring Agency, shall investigate the transactions brought forth by the RP. 3. The implementing and supervision authority shall report any deviation from the resolution plan. 4. The moratorium under Section 14 shall cease to have any effect. 5. All records collected by the RP during the CIRP shall be handed over to the Monitoring Agency and subsequently to the Resolution Applicant. All applications, including IA No. 44/JPR/2019, were disposed of accordingly.
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