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2020 (10) TMI 161 - Tri - Insolvency and BankruptcySanction of resolution plan - Sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT - The corporate debtor was incorporated on 10.12.1969 and as discussed above, the CIRP proceedings were initiated by order delivered on 13.02.2019. The present application is filed for approval of the resolution plan submitted by M/s.Haldiram Snacks Private Limited. The approval has been sought under the provisions of Section 31(1) of the Code. It is observed that the total admitted claim due to Operational Creditors (including workmen) is ₹ 3.53 crores but as the liquidation value i.e. ₹ 122.87 crores, is not sufficient to cover the dues of Financial Creditors, therefore, nothing is paid to be operational Creditors. Since, the Liquidation Value for the Operational Creditors is Zero, the resolution plan proposes to settle the 100% of the admitted Operational Creditors (including Workmen Employee and Statutory Dues) at Zero. Therefore, the amount to be distributed between operational creditors in the event of liquidation, if distributed in order of priority in Section 53(1) of the Code would be NIL. Further, there are no dissenting financial creditors as the resolution plan has been approved by 100% voting share of the Financial Creditors. Also it is stated in para 5.5 (ii) of the plan that Dissenting Financial Creditors shall be paid in accordance with Section 30(2) of the IBC provided that such payment shall not be made in priority to Financial Creditors who vote in favour of the plan. Hence, Section 30(2)(b) of the Act stands complied with. Requirements of Regulation 39(4) of the Regulations - HELD THAT - It is observed that in the 10th meeting of CoC held on 04.11.2019, approval was given for obtaining 50% of the performance security in the form of Demand Draft and remaining 50% in the form of Bank Guarantee from the resolution applicant. It is submitted that as per the requirement of performance security, the Performance Guarantee has been provided in the way of Bank Draft for ₹ 11,50,00,000/- and remaining in the form of unconditional Bank Guarantee for ₹ 11,50,00,000 both favouring the Financial Creditor. A copy of Demand Draft and Unconditional Bank Guarantee is annexed as Annexure A-3 (Colly).It is thereby submitted that the requirements of performance security under Regulation 39(4) of the Regulations read with 36B(4A) of the Regulations are complied with. The resolution plan submitted by Haldiram Snacks Private Limited as approved by the CoC, is approved - moratorium shall cease to have effect.
Issues Involved:
1. Approval of the resolution plan under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with the Insolvency and Bankruptcy Code and relevant regulations. 3. Voting and decision-making by the Committee of Creditors (CoC). 4. Distribution of claims among creditors. 5. Effective implementation of the resolution plan. Detailed Analysis: 1. Approval of the Resolution Plan: The Resolution Professional (RP) filed CA No.1033/2019 seeking sanction of the resolution plan as approved by the CoC on 04.11.2019 under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016. The application was filed for the approval of the resolution plan submitted by M/s. Haldiram Snacks Private Limited. 2. Compliance with the Insolvency and Bankruptcy Code and Relevant Regulations: The RP ensured compliance with the Code and Regulations throughout the Corporate Insolvency Resolution Process (CIRP). The RP constituted the CoC as per Section 21 of the Code and appointed two registered valuers to determine the fair and liquidation value of the corporate debtor. The RP also made public announcements to invite claims and expressions of interest (EOI) from prospective resolution applicants, and the process was conducted in accordance with the stipulated regulations. 3. Voting and Decision-Making by the Committee of Creditors (CoC): The CoC, constituted as per Section 21 of the Code, played a crucial role in the approval process. The CoC approved the resolution plan in the 10th meeting held on 04.11.2019 by a 100% voting share in favor of the plan submitted by Haldiram Snacks Private Limited. The CoC exercised its commercial wisdom in approving the plan, considering the feasibility and viability of the resolution plan. 4. Distribution of Claims Among Creditors: The resolution plan provided for the payment of insolvency resolution process costs, debts of operational creditors, and the management of the corporate debtor's affairs. The total admitted claim due to operational creditors was ?3.53 crores, but since the liquidation value was insufficient to cover the financial creditors' dues, nothing was paid to the operational creditors. The plan proposed to settle 100% of the admitted operational creditors at zero, as the liquidation value for operational creditors was nil. 5. Effective Implementation of the Resolution Plan: The resolution plan included provisions for its effective implementation. A Monitoring Agency and Turnaround Experts were to be constituted upon the NCLT Approval Date. The plan stated that the corporate debtor would be managed by the Monitoring Agency and Turnaround Experts, with the RP acting as the Monitoring Professional until the plan's payments were made. The plan also included a detailed implementation schedule and provisions for management and supervision. Conclusion: The Tribunal approved the resolution plan submitted by Haldiram Snacks Private Limited, as it met the requirements under Sections 30(2) and 31(1) of the Code. The resolution plan was binding on the corporate debtor and its employees, members, creditors, guarantors, and other stakeholders. The moratorium order passed on 13.02.2019 ceased to have effect, and the RP was directed to forward all records relating to the CIRP and the resolution plan to the Board for database recording. CA No. 1033/2019 was disposed of accordingly.
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