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2021 (8) TMI 52 - Tri - Insolvency and BankruptcySeeking approval of the Resolution Plan - Section 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In A. 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 (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). In CoC of Essar Steel 2019 (11) TMI 731 - SUPREME COURT the Hon ble Apex Court clearly laid down that the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved. The law thus settled, 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 - Application allowed.
Issues Involved:
1. Approval of the Resolution Plan under Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with the provisions of the Insolvency and Bankruptcy Code and related regulations. 3. Financial terms and distribution of payments to creditors. 4. Implementation and supervision of the Resolution Plan. 5. Compliance with statutory obligations and approvals. Detailed Analysis: 1. Approval of the Resolution Plan: An application was filed by the Resolution Professional (RP) seeking approval of the Resolution Plan submitted by Kerala Industrial Infrastructure Development Corporation (KINFRA). The Corporate Insolvency Resolution Process (CIRP) was initiated against Hindustan Newsprint Limited (HNL), a wholly owned subsidiary of Hindustan Paper Corporation Limited (HPCL). The RP conducted the CIRP in compliance with the Code and framed rules, leading to the submission of the Resolution Plan by KINFRA. 2. Compliance with Provisions of the Code: The RP ensured compliance with the provisions of the Insolvency and Bankruptcy Code, 2016, and the related regulations. The Resolution Plan was scrutinized for compliance with Sections 30(2) and 29A of the Code. The RP submitted Form H under Regulation 39(4), confirming that the Plan meets all the requirements of the Code and the regulations. The Plan was approved by the Committee of Creditors (CoC) with a 92.72% voting share, which is above the required 66%. 3. Financial Terms and Distribution of Payments: The Resolution Plan proposed an upfront payment of INR 14560.17 lakhs to settle the claims of various creditors. The payments were structured as follows: - CIRP Costs: INR 212.40 lakhs. - Financial Creditors: INR 7230.10 lakhs. - Operational Creditors: INR 7097.67 lakhs. - Fees for Monitoring, Documentation, and Implementation: INR 20 lakhs. The Plan provided for the payment of 35.13% of the dues to workmen, trainees, secured financial creditors, and statutory PF claims, and 16.31% to other statutory authorities, employees, and unsecured creditors. The entire payment to operational creditors was to be made within 45 days of the Plan's approval. 4. Implementation and Supervision: The Resolution Plan included the formation of a Monitoring Committee within 14 business days of the NCLT's approval. The Committee, comprising representatives from the Resolution Applicant and the CoC, would oversee the implementation of the Plan. The Plan also outlined the timeline for payments and other actions necessary for the revival of HNL, including capital addition, repairs, and working capital infusion. 5. Compliance with Statutory Obligations and Approvals: The Resolution Plan required amendments to the Memorandum of Association (MoA) and Articles of Association (AoA) and filing with the Registrar of Companies (RoC). The Resolution Applicant was to obtain all necessary approvals under applicable laws for effective implementation. The Tribunal clarified that the approval of the Plan does not waive any statutory obligations of the Corporate Debtor, and any waivers sought in the Plan would be subject to approval by the concerned authorities. Order: The Tribunal approved the Resolution Plan submitted by KINFRA, except for the reliefs and concessions sought under Chapter XIII. The Plan is binding on all stakeholders, including the Central and State Governments. The moratorium under Section 14 of the Code ceased to have effect from the date of the order. The RP was discharged from duties, and the Resolution Applicant was granted access to all records and premises for implementing the Plan. The Monitoring Committee was tasked with supervising the Plan's implementation, and the RP was directed to file status reports before the Tribunal. The application was disposed of with the above directions.
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