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2020 (10) TMI 325 - Tri - IBCImplementation of Resolution Plan - incapable of implementation due to default in adhering to the payment schedule - Section 60(5) of I B Code - HELD THAT - The instant IA is also liable to be dismissed in view of the judgment passed by the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Limited 2019 (11) TMI 731 - SUPREME COURT and also the judgment of the Hon ble National Company Law Appellate Tribunal in Santosh Wasant Rao Walokar 2020 (4) TMI 385 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI , as the instant IA was filed only on 06.01.2020 - there are no merit in the instant IA and accordingly the same is dismissed. Violation of Resolution Plan - HELD THAT - The decisions of the Committee of Creditors passed with the required majority percentage as per the Code, are binding on all the stake holders, including the dissenting members of Committee of Creditors, if any. No member of the Committee of Creditors, after a resolution plan was approved by the Committee of Creditors with the required majority percentage, on one ground or other, cannot challenge the said decisions of the Committee of Creditors. It is for the Adjudicating Authority to apply its judicious mind whether a particular plan submitted for its approval is in compliance of the provisions of the Code and the Regulations made thereunder - Application dismissed. Approval of Resolution Plan - HELD THAT - Admittedly, the Applicants have not lent any money to the Corporate Debtor. Therefore, they cannot be treated as the financial creditor of the corporate debtors. Though the claim of the applicant as a secured financial creditor was rejected by the Resolution Professional in 2017, the applicant has not challenged the same. The applicant having given up its right as a financial creditor of the Corporate Debtor by not challenging the rejection of its identical claim by the Resolution Professional, at the appropriate time, cannot now file the instant IA, belatedly, for the same relief. Its submission that it has not challenged the rejection of its claim as a financial creditor under the bona fide belief that its interest could be sufficiently protected and preserved under the LHG Resolution Plan, does not stand to the legal scrutiny - Application dismissed. Approval of Resolution Plan - Section 30(6) read with Section 31 and Section 60(5) of the Code, read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT - With regard to the compliance under Regulation 35A, it is stated that CA No.297/2018 filed under Section 43 and 45 of the Code and application filed under Section 19 of the Code, are pending before this Adjudicating Authority and the same to be continued even after approval of the Resolution Plan - Further, the resolution plan fulfils all the requirements of Regulation 38 and 39 of the CIRP Regulations. A perusal of Regulation 38 would clearly show that by virtue of mandatory contents of resolution plan as discussed in the preceding paragraphs in relation to Section 30 and Section 31 of the Code, the requirement of Regulation 38 also stands fulfilled. Even the requirement of Regulation 39 has been satisfied, as the RP has submitted that the resolution plan of Resolution applicant, as approved by the Committee of Creditors, to this Tribunal along with the compliance certificate in Form H, as per the requirements of Regulation 39(4) of the CIRP Regulations meets all the requirements of the Code and the CIRP Regulations and that the resolution plan has been duly approved by the Committee of Creditors - we accept and approve the Committee of Creditors approved resolution plan of Resolution Applicant-DVI. Validity of the registered lease deed - HELD THAT - Since, all the counsels are ad-idem that this adjudicating authority while exercising its jurisdiction under the provisions of Code, cannot decide the validity of a lease deed, we are of the considered view that there is no necessity for us to go and examine the various contentions of all the parties with regard to the said issue. Further, for the same reason i.e. execution of the registered lease deed even prior to the approval of the resolution plan by the Committee of Creditors, we need not go into the issue whether execution of the instant lease deed was a to be understood as a pre-condition for approval of the resolution plan, though the Plan stated otherwise. In this view of this matter, and for the aforesaid reasons and also in view of our observations at Paragraphs Nos.13(a) (i) and 18 of IA No.225/2020, there is no need to discuss the extensive arguments advanced and judgments relied on by both the sides, on the issues that whether the lease deed dated 28.01.2020, is valid or whether this Adjudicating Authority can compel the applicant to act in a particular manner in respect of the ACE Complex Land property on which it is claiming certain mortgage rights or whether granting of prayers in Section 9 of the Resolution Plan, along with Addendum, would prejudice the rights of the Applicant etc. - Application dismissed.
Issues Involved:
1. Admission and non-admission of claims by the Resolution Professional. 2. Modification of the Resolution Plan. 3. Inclusion of a secured financial creditor in the Committee of Creditors. 4. Approval of the Resolution Plan by the Adjudicating Authority. 5. Rights concerning the mortgaged property (ACE Complex Land). Issue-wise Detailed Analysis: I. Admission and Non-Admission of Claims by the Resolution Professional: - CA 293/2018: An Operational Creditor sought the revision of the liquidation value and admission of its claim. The Resolution Professional admitted part of the claim but rejected the rest due to lack of proof of delivery and inclusion of interest. The Tribunal dismissed the application based on the Supreme Court’s ruling in *Committee of Creditors of Essar Steel India Limited* that all claims must be resolved within the resolution process and cannot be revisited post-approval of the Resolution Plan. - IA No.7/2020: Another claim by M/s Neha Associates was rejected as it was already claimed by IDBI Bank under a vendor financing facility. The Tribunal dismissed the application citing the same precedent from the Essar Steel case. II. Modification of the Resolution Plan: - IA No.222/2020: Corporation Bank, now Union Bank of India, sought modifications to the Resolution Plan concerning compliance with specific regulations and inclusion of additional amounts in its claims. The Tribunal dismissed the application, emphasizing that decisions of the Committee of Creditors (CoC) are binding and cannot be challenged post-approval by the CoC, as per the Code. III. Inclusion of a Secured Financial Creditor in the Committee of Creditors: - IA No.62/2020: Vistra ITCL (India) Limited and others sought inclusion in the CoC as secured financial creditors based on a pledge of shares. The Tribunal dismissed the application, stating that the claim was rejected in 2017 and not challenged timely, and the applicants did not lend money directly to the Corporate Debtor, thus not qualifying as financial creditors under the Code. IV. Approval of the Resolution Plan by the Adjudicating Authority: - IA No.225/2020: The Resolution Professional sought approval of the Resolution Plan submitted by Deccan Value Investors (DVI). The Tribunal examined compliance with the Code and Regulations, including payment of insolvency resolution process costs, treatment of operational creditors, management of the Corporate Debtor post-approval, and implementation mechanisms. The Tribunal approved the Resolution Plan, directing the Resolution Applicant to submit the balance Performance Bank Guarantee and seek Competition Commission of India approval within specified timelines. V. Rights Concerning the Mortgaged Property (ACE Complex Land): - IA No.237/2020: Vistra ITCL (India) Limited sought to protect its rights over the mortgaged ACE Complex Land, challenging the lease deed executed by the Corporate Debtor. The Tribunal did not delve into the validity of the lease deed, stating it was beyond its jurisdiction under the Code. The Tribunal dismissed the application but clarified that it did not express any opinion on the lease deed's validity or the rights over the ACE Complex Land. Conclusion: The Tribunal meticulously addressed each application, adhering to the principles and provisions of the Insolvency and Bankruptcy Code, 2016. It emphasized the binding nature of the CoC's decisions and the necessity to resolve all claims within the resolution process, ensuring the effective implementation of the approved Resolution Plan while maintaining the legal rights of all parties involved.
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