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2021 (1) TMI 610 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - Section 31(1) of the Code - seeking appointment of RP to monitor the implementation of the scheme - HELD THAT - Section 30(6) of the Code enjoins the resolution professional to submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority. Section 31 of the Code deals with the approval of the resolution plan by the Adjudicating Authority, if it is satisfied that the resolution plan as approved by the committee of creditors under section 30(4) meets the requirements as referred to in section 30(2) - Thus, before approving the Resolution plan, it is the duty of the Adjudicating Authority that it should satisfy itself that the Resolution plan as approved by the CoC meets the requirements as referred to in sub-section (2) of Section 30. In terms of Regulation 27 of CIRP Regulations, Fair value and Liquidation value was ascertained through two registered valuers, and the same stands at ₹ 109.18 Crores and ₹ 96.92 Crores respectively. The total Resolution Plan value of ₹ 98.15 Crores is higher than the liquidation value - RP has complied with the code in terms of Section 30(2)(a) to 30 (2) (f) and Regulations 38(1), 38(1)(a), 38(2)(a), 38(2)(b), 38(2)(c) 38(3) of CIRP regulations. The 'Resolution Plan' filed with the Application meets the requirements of Section 30(2) of the code, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. The 'Resolution Plan' is also not in contravention of any of the provisions of Section 29A. Hence, this Adjudicating Authority is satisfied that the Resolution Plan is in accordance with Law - While approving the 'Resolution Plan', it is clarified that the Resolution Applicant shall pursuant to the Resolution Plan approved under Sub-Section (1) of Section 31 of the I B Code, 2016, obtain all the necessary approvals as may be required under any law for the time being in force within the period as provided for in such law. This Adjudicating Authority orders for the Constitution of Monitoring Committee consisting of Mr TSN Raja, RP, representatives nominated by the Financial Creditors and the Resolution Applicant to supervise the implementation of the Resolution Plan and further Resolution Professional is directed to file status of implementation of Resolution Plan before this Adjudicating Authority from time to time - approved 'Resolution Plan' shall become effective from the date of passing of this Order. Application allowed.
Issues Involved:
1. Approval of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code (IBC), 2016. 2. Appointment of the Resolution Professional (RP) to monitor the implementation of the Resolution Plan. 3. Compliance with Section 30(2) of the IBC, 2016. 4. Voting and approval by the Committee of Creditors (CoC). 5. Adherence to legal provisions and regulations. 6. Constitution of Monitoring Committee. 7. Effectiveness of the Resolution Plan and cessation of moratorium. Detailed Analysis: 1. Approval of the Resolution Plan under Section 31(1) of the IBC, 2016: The application sought approval for the Resolution Plan of M/s Kamini Metalliks Private Limited. The Corporate Debtor was admitted for Corporate Insolvency Resolution Process (CIRP) on 13.04.2018, and the Resolution Professional (RP) received three resolution proposals. After evaluations, M/s Kamini Metalliks Pvt Ltd was declared H1 and improved their offer to ?98.15 Crores. The liquidation value of the Corporate Debtor's estate was ?72 Crores, and the CoC, with 100% majority, recommended the Resolution Plan for approval. The Adjudicating Authority approved the Resolution Plan as it met the requirements under Section 30(2) of the IBC, 2016. 2. Appointment of the RP to monitor the implementation of the Resolution Plan: The application requested the appointment of the RP to monitor the implementation of the Resolution Plan. The Adjudicating Authority ordered the constitution of a Monitoring Committee consisting of the RP, representatives nominated by the Financial Creditors, and the Resolution Applicant to supervise the implementation. The RP was directed to file the status of implementation before the Adjudicating Authority from time to time. 3. Compliance with Section 30(2) of the IBC, 2016: The Resolution Plan was examined to ensure compliance with Section 30(2) of the IBC, 2016, which includes provisions for payment of insolvency resolution process costs, debts of operational creditors, management of the Corporate Debtor's affairs, implementation and supervision of the plan, and adherence to legal provisions. The RP confirmed compliance with these requirements and submitted the necessary affidavit under Section 30(1) of the Code. 4. Voting and approval by the CoC: The CoC approved the Resolution Plan with a 100% majority vote in its 15th meeting held on 21.02.2019. The voting was conducted as per the provisions of the Code, and the RP submitted the approved plan to the Adjudicating Authority. The Supreme Court in K Sashidhar Vs. Indian Overseas Bank emphasized that the Adjudicating Authority must ensure the plan meets Section 30(2) requirements once approved by the requisite voting share of financial creditors. 5. Adherence to legal provisions and regulations: The Resolution Plan was scrutinized for compliance with the IBC, 2016, and CIRP regulations. The plan provided for the payment of CIRP costs, repayment of operational creditors' debts, management of the Corporate Debtor's affairs, and appointment of a Monitoring Committee. The plan did not contravene any legal provisions and conformed to the requirements specified by the Board. 6. Constitution of Monitoring Committee: The Adjudicating Authority ordered the constitution of a Monitoring Committee to supervise the implementation of the Resolution Plan. The committee includes the RP, representatives of the Financial Creditors, and the Resolution Applicant. 7. Effectiveness of the Resolution Plan and cessation of moratorium: The approved Resolution Plan became effective from the date of the order. The moratorium under Section 14 of the IBC, 2016 ceased to have effect from the date of the order. The RP was directed to forward all records related to the CIRP and the Resolution Plan to the Insolvency and Bankruptcy Board of India (IBBI) and send a copy of the order to the participants and the Resolution Applicant. Conclusion: The application bearing IA No. 173/2019 was allowed, and the Resolution Plan of M/s Kamini Metalliks Private Limited was approved. The RP was appointed to monitor the implementation, and a Monitoring Committee was constituted. The plan complied with all legal requirements and regulations, and the moratorium ceased from the date of the order.
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