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2021 (7) TMI 144 - Tri - Insolvency and BankruptcySeeking approval of resolution plan - section 30(6) of Insolvency and Bankruptcy Code, 2016 read with Regulation 39(4) of Insolvency 8B Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, r/w. rule 11 of NCLT rules - HELD THAT - In K. Sashidhar v. Indian Overseas Bank Others 2019 (2) TMI 1043 - SUPREME COURT the Hon'ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per Section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority. On receipt of such proposal, the Adjudicating Authority (NCLT) is required to satisfy itself that the resolution plan as approved by CoC meets the requirements specified in Section 30(2). No more and no less. Hon'ble Supreme Court in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta Ors. 2019 (11) TMI 731 - SUPREME COURT the limited judicial review available to AA has to be within the four corners of section 30(2) of the Code. Such review can in no circumstance trespass upon a business decision of the majority of the CoC. As such the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved as held in para 42 of the said judgment. The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39(4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The resolution plan is approved - moratorium shall cease to have effect - application allowed.
Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with mandatory contents of the Resolution Plan under the Code and CIRP Regulations. 3. Reliefs and waivers sought by the Resolution Applicant. 4. Impact on stakeholders, including financial and operational creditors, and employees. 5. Extinguishment of liabilities and statutory obligations. 6. Recommendations for government concessions and grants. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016: The interlocutory application was filed by the Resolution Professional seeking approval of the resolution plan submitted by RV Consulting Services Pvt. Limited (RVCS) and Sagar Power Limited (SPL) for M/s. Panyam Cements and Mineral Industries Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated on 14.05.2020, and the Resolution Plan was approved by the Committee of Creditors (CoC) with a voting share of 97.63%. The plan proposed an amount of INR 100.50 crores, including an upfront payment of INR 90.25 crores to financial creditors and earmarked amounts for operational creditors, CIRP costs, and statutory dues. 2. Compliance with mandatory contents of the Resolution Plan under the Code and CIRP Regulations: The Resolution Professional conducted a thorough compliance check of the Resolution Plan in terms of the Code and Regulations 38 & 39 of the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) Regulations, 2016. The plan met the requirements of Section 30(2) of the Code, including priority payment of CIRP costs, payment to operational creditors, and compliance with Regulation 38. The Resolution Applicant was not ineligible under Section 29A of the Code. 3. Reliefs and waivers sought by the Resolution Applicant: The Resolution Applicant sought certain reliefs and waivers detailed in paras 67 to 104 of the Application. However, the Tribunal was not inclined to grant such concessions or waivers, stating that the Resolution Applicant needed to approach the concerned authorities for permits, which would be considered in accordance with the law. 4. Impact on stakeholders, including financial and operational creditors, and employees: The Resolution Plan proposed payments to financial creditors, operational creditors, and workmen and employees. An amount of INR 5.43 crores was earmarked for workmen and employees, and INR 11.87 lakhs for operational creditors. The plan also included provisions for the infusion of additional capital for capital expenditure and working capital requirements. The Tribunal emphasized the importance of the company's revival for the benefit of workmen and employees, highlighting that liquidation would not fetch even one-third of the projected liquidation value. 5. Extinguishment of liabilities and statutory obligations: The Tribunal clarified that all crystallized and unclaimed liabilities of the Corporate Debtor as on the date of the order would stand extinguished upon approval of the Resolution Plan. The approval of the plan would not waive any statutory obligations, and the Corporate Debtor would need to approach the concerned authorities for necessary approvals. 6. Recommendations for government concessions and grants: The Tribunal recommended that the Government of Andhra Pradesh and the Government of India provide concessions or grants to the Corporate Debtor, considering the area's poverty and unemployment. The revival of the company would provide significant benefits to the local community. Order: The Tribunal approved the Resolution Plan dated 19.05.2021 submitted by RVCS and SPL. It emphasized the necessity of the company's revival for the benefit of secured creditors, workmen, and employees. The moratorium under Section 14 of the Code ceased to have effect from the date of the order. The Applicant was directed to forward all records relating to the CIRP and the Resolution Plan to the IBBI and communicate the order to the Registrar of Companies, Vijayawada.
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