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2021 (2) TMI 162 - AT - Insolvency and BankruptcyApproval of Resolution plan - Appeal has been filed primarily on the basis that the Resolution Plan was approved after deducting part of the claim of the Appellant and the Resolution Plan was approved by the Adjudicating Authority without taking into account effect of 2019 Amendment to IBC (Insolvency and Bankruptcy Code 2016) - HELD THAT - In view provisions of amended Section 30(1)(2)(ii) and read the same with Section 53(1) of IBC with paragraphs 2 and 3 of the Affidavit filed by the Resolution Professional is material. The Resolution Professional has accepted that the average value of the secured asset of the Appellant is 12.86 Crores and has given his calculation in para 3 of the Affidavit that even if the amended Section was to be applied the figure arrived at under Section 53 (1) for the Appellant would be 8.60 Crores. It is claimed that this has been provided in the Resolution Plan. The challenge put up by the Appellant to the Resolution Plan with regard to provisions made for the Appellant in the Resolution Plan even if looked at from the alternative angle considering the amended provisions of Section 30 of IBC would not survive.
Issues Involved:
1. Reduction of Appellant's claim and voting share in the Committee of Creditors (COC). 2. Approval of the Resolution Plan by the Adjudicating Authority without considering the 2019 Amendment to the Insolvency and Bankruptcy Code (IBC). Issue-wise Detailed Analysis: 1. Reduction of Appellant's Claim and Voting Share in the COC: The Appellant filed Company Appeal (AT) (Ins) No.552 of 2019 against the order dated 25th April 2019, which dismissed I.A. 665 of 2018 and I.A. 52 of 2019. The Appellant's claim was reduced, and their voting share in the COC was decreased. The Appellant, a non-banking financial company, entered into multiple loan agreements with the Corporate Debtor and its group companies. A Loan-cum-Hypothecation Agreement dated 22nd September 2016 rescheduled and restructured the total dues to ?23.50 Crores, with ?10 Crores to be repaid in cash and ?13.50 Crores to be paid by issuing 52 Lakhs equity shares. The Appellant claimed these shares were held as security. However, the Adjudicating Authority found that the shares were transferred to the Appellant's demat account, making the Appellant the absolute owner. Consequently, the Resolution Professional (RP) was justified in reducing the claim by ?10.40 Crores, the value of the shares. The Adjudicating Authority dismissed the Appellant's applications, and the appeal was also dismissed, finding no error in the reduction of the claim and voting share. 2. Approval of the Resolution Plan Without Considering the 2019 Amendment to IBC: The Appellant filed Company Appeal (AT) (Ins) No.976 of 2019 against the approval of the Resolution Plan by the Adjudicating Authority on 31st July 2019. The Appellant argued that the Resolution Plan was approved without considering the 2019 Amendment to IBC, which entitles dissenting financial creditors to a minimum amount equivalent to the liquidation value. The Appellant claimed the average liquidation value of its securities was ?12.98 Crores, but only ?8.64 Crores was approved. The Resolution Professional confirmed that the average liquidation value of the secured assets was ?12.86 Crores. However, under the amended Section 30(2)(b)(ii) of IBC, the Appellant was entitled to ?8.60 Crores, which was provided in the Resolution Plan. The Tribunal found no substance in the challenge to the Resolution Plan but ordered that the Appellant be paid ?8.60 Crores on priority. Conclusion: The appeals were disposed of with the Tribunal upholding the reduction of the Appellant's claim and voting share and partially allowing the second appeal to ensure the Appellant is paid ?8.60 Crores on priority under the approved Resolution Plan.
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