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2020 (12) TMI 433 - Tri - IBCApproval of Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It is found that the COC has approved the plan with 91.28% voting in favour of the approval of the plan. More so, the Resolution Applicant fulfils the mandatory contents of the Resolution Plan as provided under Regulation 38 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The Supreme Court in the matter of K. Sashidhar Vs. Indian Overseas Bank Ors. 2019 (2) TMI 1043 - SUPREME COURT has observed that National Company Law Tribunal has no jurisdiction and authority to analyze or evaluate the commercial decision of the Committee of Creditors (CoC) to enquire into the justness of the rejection of the Resolution Plan by the dissenting Financial Creditors. Keeping in view such object behind the enactment of the Code, intention of the Legislature, that the priority is to be given to the resolution than liquidation in the larger interests of the public, workmen, stakeholders and the other employees of the corporate debtors in the interest of justice and in order to achieve the object of the Code and liquidation of a company can be only as a last resort, wherein, all efforts for brining Resolution Plan were failed or it cannot be found workable in the larger public interest. Hence, now the approval of Resolution Plan by this Adjudicating Authority is rule as per the apex court's decision in the matter of K. Sashidhar Vs. Indian Overseas Bank Ors. - On the backdrop of the decision taken by Hon'ble Supreme Court, it is pertinent to note herein that in the instant case, there is no interference with commercial wisdom of CoC with regard to the implementation of the Resolution Plan. The Adjudicating Authority, is 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.
Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with the mandatory contents of the Resolution Plan as per Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 3. Commercial wisdom of the Committee of Creditors (CoC). 4. Concessions, waivers, or exemptions sought by the Resolution Applicant. Detailed Analysis: 1. Approval of the Resolution Plan: The application (IA) No. 178 of 2020 in CP (IB) No. 08 of 2019 was filed by the Resolution Professional (RP) of M/s. Gopala Polyplast Limited under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (IB Code) seeking approval of the Resolution Plan. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 02.05.2019, and the RP was appointed with the consent of 90.40% CoC members. The RP invited Expressions of Interest (EoI) and received two Resolution Plans from Plastene India Limited and Amrut Polymers. After several CoC meetings and negotiations, the Resolution Plan by Plastene India Limited was approved by 91.28% voting in the 9th CoC meeting. 2. Compliance with Regulation 38: The RP confirmed that the Resolution Plan complies with the requirements under Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and Section 30 of the IB Code. The Resolution Plan includes provisions for: - Payment of CIRP costs. - Payment of debts to operational creditors and financial creditors. - Management and implementation of the Plan. - The Resolution Plan also includes an addendum dated 20.07.2020, which was approved in the 11th CoC meeting with 90.34% voting, detailing amendments such as a reduced interest rate and extended repayment terms. 3. Commercial Wisdom of CoC: The Tribunal emphasized that it has no jurisdiction to interfere with the commercial wisdom of the CoC, as per the Supreme Court’s decision in K. Sashidhar Vs. Indian Overseas Bank & Ors. The CoC's decision to approve the Resolution Plan with 91.28% voting is final, and the Tribunal cannot question the commercial rationale behind it. The approval of the Resolution Plan aligns with the legislative intent to prioritize resolution over liquidation in the larger public interest. 4. Concessions, Waivers, or Exemptions: The Tribunal noted that the Resolution Applicant may approach the relevant statutory or competent authorities for any concessions, waivers, or exemptions as per prevailing laws. The approval of the Resolution Plan does not imply automatic waiver of pending legal proceedings, which are subject to the jurisdiction of the respective authorities. The Tribunal clarified that not granting the requested concessions does not hinder the implementation of the Resolution Plan, as the Resolution Applicant has the liberty to seek appropriate reliefs from competent authorities. Conclusion: The Tribunal approved the Resolution Plan, observing that it meets the requirements under Section 30(2) of the IB Code and Regulation 38. The Plan shall come into force immediately and is subject to existing laws and necessary approvals. The Resolution Professional is directed to forward all records to the Insolvency and Bankruptcy Board of India. The application IA 178 of 2020 is allowed with the above observations and directions.
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