2019 (9) TMI 710 - Tri - Insolvency and Bankruptcy

Admissibility of petition - Initiation of Corporate Insolvency Resolution Process - Corporate Debtor in accordance with Section 22 of the Code by the Committee of Creditors - approval of Resolution plan - HELD THAT - Section 53 of the Code lists the priorities to be given to the beneficiaries, of liquidation value of the assets of the Corporate Debtor. The provisions of Section 53 make it amply clear that Operational Creditors are at the end of the list of beneficiaries as the Secured Financial Creditors have edge over the others - It would also be pertinent to mention here that Operational Creditors have no locus standi as far as approval of the Resolution Plan by the CoC is concerned. As per Section 24(3)(C), they are not eligible to attend and vote at the meetings of CoC if they are holding less than 10% of the total debt. It is found that the Resolution Plan confirms to the criteria as provided under clauses (a) to (f) in section 30(2) of the Code and the CoC approved the Resolution Plan by 69.08 per cent majority of voting share. The Resolution Plan also confirms to such other requirements as may be specified by the Board - On perusal of the Resolution Plan, it is found that it meets the requirement of Section 31 r/w Section 30(2) of the Code as well as Section 29A of the Code. Therefore, the present application IA 236 of 2019 is allowed with following observations. The Resolution Applicant has sought certain reliefs and waivers. However, the Resolution Applicant under Section 6, Part V of the Resolution Plan has stated that any relief(s) requested to be granted by the NCLT to the Resolution Applicant shall not be construed as condition for the implementation of this Resolution Plan. This Adjudicating Authority is of the considered view that these are the matters related with the concerned competent authorities, hence the Resolution Applicant may approach those competent authorities for relief(s) and waivers sought by them, for their consideration - The Resolution Applicant has liberty to approach this Adjudicating Authority for appropriate directions/clarifications, as the case may be, in case there is any hindrance in the effective implementation of the Resolution Plan, in accordance with law. The Adjudicating Authority, are of the considered opinion and also being satisfied that the Resolution Plan as approved by the Committee of Creditors (CoC) meets the requirements as referred to under section 30(2) of the Code - application allowed

Summary

Issues Involved:
1. Approval of the Resolution Plan.
2. Compliance with the Insolvency and Bankruptcy Code, 2016 and related regulations.
3. Objections by the dissenting financial creditor.
4. Reliefs and waivers sought by the Resolution Applicant.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed by the Resolution Professional under Section 30(6) read with Section 31(1) of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan for the Corporate Debtor. The Tribunal noted that the Resolution Plan was approved by the Committee of Creditors (CoC) with a 69.08% voting share. The Resolution Plan submitted by Adani Power Limited was identified as the best plan and was approved by the CoC. The Tribunal confirmed that the Resolution Plan met the requirements of Section 31 r/w Section 30(2) of the Code and Section 29A of the Code.

2. Compliance with the Insolvency and Bankruptcy Code, 2016 and Related Regulations:
The Tribunal examined the compliance of the Resolution Plan with mandatory requirements under the Code and CIR Regulations. The Resolution Professional provided a detailed table showing compliance with Sections 25(2)(h), 29A, 30(1), 30(2), 30(4), 31(1), Regulation 35A, and Regulation 38 of the CIR Regulations. The Tribunal found that the Resolution Plan conformed to the criteria under clauses (a) to (f) in Section 30(2) of the Code and was approved by the requisite majority of the CoC.

3. Objections by the Dissenting Financial Creditor:
Corporation Bank, holding 3.12% voting share, objected to the approval of the Resolution Plan, arguing that it did not meet the requirements of Section 30(2) of the IBC, was undervalued, and failed to maximize the value of the Corporate Debtor's assets. The Tribunal noted that the objections were not raised timely and emphasized the importance of time-bound resolution in bankruptcy proceedings. The Tribunal referenced the Supreme Court's decision in K. Sashidhar v. Indian Overseas Bank, which upheld the commercial wisdom of the CoC. Consequently, the objections of Corporation Bank were deemed not maintainable.

4. Reliefs and Waivers Sought by the Resolution Applicant:
The Resolution Applicant sought various reliefs and waivers, which the Tribunal reviewed carefully. It was noted that certain reliefs were clarificatory, stating that the Resolution Applicant would not be liable for financial obligations prior to the Effective Date. For other reliefs, the Tribunal directed the Resolution Applicant to approach the concerned competent authorities. The Tribunal emphasized the importance of cooperation from these authorities to facilitate the effective implementation of the Resolution Plan.

Additional Directions:
The Tribunal ordered that the approved Resolution Plan shall come into force immediately and directed the Resolution Applicant to obtain necessary approvals within one year. The Resolution Professional was instructed to forward all records related to the insolvency resolution process to the Insolvency and Bankruptcy Board of India.

Conclusion:
The Tribunal allowed the application and approved the Resolution Plan, confirming that it met all necessary legal requirements and was in the best interest of all stakeholders. The Resolution Applicant was granted liberty to seek further directions if needed for effective implementation of the plan.