2021 (10) TMI 1036 - Tri - Insolvency and Bankruptcy

Seeking approval of Resolution Plan - section 30(6) and 31 of the IBC, 2016 read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT - The resolution plan is for the amount of ₹ 96.50 crores, which is to be paid in 150 days from the date of approval of Resolution Plan by this Adjudicating Authority and all the funds shall be sourced by the Resolution applicant through its internal sources which includes the working capital and through its FDR of ₹ 30,50,00,000/- with Yes Bank in the name of the Group Companies and the balance amount will be paid through the internal resources of the company - the resolution plan, as approved by the CoC, is found in accordance with the sub-section 2 of Section 30 read with Section 31 of the Code, thus the Resolution Plan under sub-section (1) of Section 31 of the Code is approved. The Resolution Applicant is allowed to remove and/or substitute the Monitoring Agency with prior approval of this Adjudicating Authority if the Monitoring Agency is unable to satisfactorily perform its responsibilities or breaches terms of its appointment. The resolution plan, as approved by the CoC, is found in accordance with the sub-section 2 of Section 30 read with Section 31 of the Code - the scheme is approved - application allowed.

Issues Involved:
1. Approval of the Resolution Plan.
2. Compliance with IBC and CIRP Regulations.
3. Evaluation and consideration of Resolution Plans by CoC.
4. Liquidation consideration.
5. Voting and approval process by CoC.
6. Performance Bank Guarantee and financial arrangements.
7. Monitoring and implementation of the Resolution Plan.

Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed by the Resolution Professional (RP) under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code (IBC), 2016, along with Regulation 39(4) of the CIRP Regulations, seeking approval of the Resolution Plan submitted by IM+ Capitals Limited for Fedders Electric & Engineering Limited ("Corporate Debtor"). The Resolution Plan, approved by the Committee of Creditors (CoC) with a 74.61% voting share, was placed on record.

2. Compliance with IBC and CIRP Regulations:
The RP verified and confirmed that the Resolution Plan complies with Section 30(2) of the IBC and Regulation 38 of the CIRP Regulations. The RP also submitted a compliance certificate in Form-H, certifying the eligibility of the Resolution Applicant under Section 29A of the Code and the feasibility and viability of the Resolution Plan.

3. Evaluation and consideration of Resolution Plans by CoC:
Initially, four Resolution Plans were submitted by different PRAs. After discussions and negotiations in multiple CoC meetings, only IM+ Capitals Limited's Resolution Plan was considered for approval. The CoC evaluated the plans based on the Request for Resolution Plan (RFRP) and the evaluation matrix. Shiva Consultants Private Limited's plan was rejected due to non-fulfillment of conditions laid down in the RFRP.

4. Liquidation consideration:
In the 24th CoC meeting, the possibility of liquidation was discussed due to uncertainty in the approval of the Resolution Plan. However, the CoC continued to negotiate and finalize the Resolution Plan with IM+ Capitals Limited.

5. Voting and approval process by CoC:
The final Resolution Plan was put up for e-voting by the CoC members, resulting in approval by 74.61% of the CoC. Some members, including Punjab National Bank, Central Bank of India, ICICI Bank, and Toyota Financial Services Pvt. Ltd., dissented. Despite the dissent, the Resolution Plan attained the requisite majority as stipulated under Section 30(4) of the IBC.

6. Performance Bank Guarantee and financial arrangements:
IM+ Capitals Limited submitted a performance bank guarantee of INR 9.65 crores. The Resolution Plan involved payment of INR 96.50 crores within 150 days from the approval date, sourced through internal resources and working capital.

7. Monitoring and implementation of the Resolution Plan:
A Monitoring Agency comprising representatives from the Financial Creditors, Successful Resolution Applicant, and the Resolution Professional was confirmed to supervise the implementation of the Resolution Plan. The Resolution Applicant was allowed to remove or substitute the Monitoring Agency with prior approval if necessary.

Conclusion:
The Tribunal approved the Resolution Plan under Section 31(1) of the IBC, declaring it binding on all stakeholders. The moratorium order ceased to have effect from the date of the order. The RP was directed to forward all CIRP records to the IBBI. The approved Resolution Plan became effective immediately, and the application was disposed of accordingly.

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