2021 (3) TMI 250 - Tri - Insolvency and Bankruptcy

Approval of Resolution plan - fresh claim of outstanding FRP dues of farmers who has supplied sugarcane to the corporate debtor - whether the outstanding dues of the factory be returned/refunded and/or adjusted towards the future bill cycles of the Applicant? - HELD THAT - The attached plots are the property of the Corporate Debtor and were mentioned in the valuation report - It is to be noted that when the resolution plan is approved the resolution applicant takes over all the assets of the Corporate Debtor and is liable to make payment to the Financial Creditors, Operational Creditors etc. as agreed in the resolution plan which has been approved by the CoC and subsequently final seal of approval is given by this Tribunal as provided under Section 31 of the Code. Once that process is over, the resolution applicant cannot be saddled with any kind of new liability apart from the agreed payment to the stakeholders in the Resolution Plan. The resolution applicant is deemed to have taken over all the assets of the Corporate Debtor including the above said plots of land on which the R1 created a charge for non-payment of FRP. In the resolution plan, approved by this Bench the Resolution Applicant has agreed to pay sum of ₹ 2 Crores to the farmers over a period of time. Hence, charge created by the R1 on the initiation of Revenue Recovery Proceedings has to be set aside - Application disposed off.

Summary

Issues:
1. Application by the Successful Resolution Applicant seeking reliefs regarding removal of entries on 7/12 Extracts and refund of outstanding dues.
2. Admission of Insolvency and Bankruptcy Petition against the Corporate Debtor.
3. Approval of Resolution Plan by the Tribunal.
4. Non-payment of Fair Remunerative Price (FRP) by the Corporate Debtor.
5. Issuance of Revenue Recovery Certificate (RRC) against the Corporate Debtor.
6. Submission of claims by farmers for arrears of FRP.
7. Details of the Resolution Plan approved by the CoC.
8. Intimation to District Collector for removal of charge created against the Corporate Debtor.
9. Letter addressed by R1 to R3 regarding RRC action and payment to farmers.
10. Valuation report of the attached plots belonging to the Corporate Debtor.
11. Liability of the resolution applicant post-approval of the resolution plan.
12. Setting aside the charge created by R1 and R3 on the properties.

Analysis:

1. The Successful Resolution Applicant filed an Application seeking directions for the removal of entries on 7/12 Extracts of the Corporate Debtor and refund of outstanding dues. The Applicant withdrew one prayer temporarily due to pending document submission.

2. The Tribunal noted the admission of an Insolvency and Bankruptcy Petition against the Corporate Debtor by Union Bank of India, leading to the initiation of the Corporate Insolvency Resolution Process.

3. Approval of the Resolution Plan by the Tribunal signified the completion of the Corporate Insolvency Resolution Process as per Section 31 of the Code, validating the Resolution Applicant's status.

4. The Applicant highlighted the Corporate Debtor's failure to pay Fair Remunerative Price (FRP) to farmers, amounting to significant outstanding dues.

5. Revenue Recovery Certificates (RRC) were issued against the Corporate Debtor for unpaid FRP dues, leading to the creation of a charge on specific plots of land owned by the Corporate Debtor.

6. Farmers lodged claims for arrears of FRP, prompting legal actions and directions from authorities to address the payment discrepancies.

7. Detailed breakdown of the Resolution Plan approved by the Committee of Creditors (CoC) showcased the proposed payments to various stakeholders, including farmers' claims.

8. Communication with the District Collector aimed at removing charges on the Corporate Debtor's properties, emphasizing the Resolution Plan's implementation.

9. Correspondence between relevant parties regarding the RRC action, highlighting the Resolution Applicant's commitment to pay farmers in installments.

10. Evaluation of the attached plots belonging to the Corporate Debtor confirmed their ownership and inclusion in the Resolution Plan.

11. Post-approval of the Resolution Plan, the Resolution Applicant assumed liabilities as per the agreed terms, ensuring compliance with the approved plan.

12. The Tribunal directed the release of charges created by authorities on the Corporate Debtor's properties, emphasizing the Resolution Applicant's responsibility post-approval of the plan.