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2024 (1) TMI 402 - AT - Insolvency and BankruptcyApproval of Resolution plan - payments to related parties - discrimination in Resolution Plan - HELD THAT - Related parties cannot claim entitlement of any amount in the plan and cannot claim any discrimination with regard to payments to unrelated unsecured Financial Creditors. Respondent has rightly placed reliance on the judgment of the Hon ble Supreme Court in M.K. Rajagopalan vs. Dr. Periasamy Palani Gounder and Anr.- 2023 (5) TMI 344 - SUPREME COURT where Hon ble Supreme Court had occasion to consider the provisions of the IBC specially the payments to related parties and discrimination in the Resolution Plan. In relation to related party, it was held by the Hon ble Supreme Court that there is no provision in the Code which mandates that related party should be paid in parity with unrelated party. It is also relevant to notice that submission which is advanced by the Appellant is with regard to discrimination in payments to the workers and employees. No workers and employees have any grievance nor any workers and employees is dissatisfied with the payments made under the plan to them nor have they come in Appeal. Plan has been approved with 82.40% vote shares of the CoC - view of the Adjudicating Authority also confirmed that there is no non-compliance of Section 30(2) of the IBC. Thus, no grounds have been made out to interfere with the impugned order which have been challenged in these Appeals - Both the Appeals are dismissed.
Issues Involved:
1. Validity of the Resolution Plan under Section 53 and Section 30(2)(b) of the IBC. 2. Discrimination in payments to related and unrelated parties. 3. Treatment of workers and employees under the Resolution Plan. 4. Rejection of financial claims by the Resolution Professional. 5. Compliance with Section 25FF of the Industrial Disputes Act, 1947. Summary: Issue 1: Validity of the Resolution Plan under Section 53 and Section 30(2)(b) of the IBC The Appellant argued that the Resolution Plan's disbursement based on security interest, rather than vote shares of the Financial Creditor, violates Section 53. The Tribunal held that since the Appellant is a related party, it is not entitled to any distribution. The Tribunal found no violation of Section 30(2) of the IBC in the approved Resolution Plan. Issue 2: Discrimination in payments to related and unrelated parties The Appellant claimed discrimination as related parties were not proposed any payment. The Tribunal cited the Supreme Court judgment in "M.K. Rajagopalan vs. Dr. Periasamy Palani Gounder and Anr.- 2023 SCC OnLine SC 574," which held that there is no provision in the IBC mandating parity in payments between related and unrelated parties. The Tribunal upheld the commercial wisdom of the CoC in determining payment distribution. Issue 3: Treatment of workers and employees under the Resolution Plan The Appellant contended that workers and employees were improperly grouped with Operational Creditors, contrary to Section 30(2)(b) and Section 53 of the IBC. The Tribunal noted that no workers or employees had raised grievances or appealed, and the plan provided sufficient funds to clear their dues. The Tribunal found no violation in the treatment of workers and employees under the plan. Issue 4: Rejection of financial claims by the Resolution Professional The Appellant, "Kesoram Industries Limited,' claimed their financial claim was wrongly rejected by the new Resolution Professional. The Tribunal noted that this issue had been separately addressed in Company Appeal (AT) (Insolvency) No. 1467 of 2023, which was dismissed. Therefore, the Appellant's challenge to the Resolution Plan was not upheld. Issue 5: Compliance with Section 25FF of the Industrial Disputes Act, 1947 The Appellant argued that the transfer of the tyre undertaking violated Section 25FF of the Industrial Disputes Act, 1947. The Tribunal found no applicability of this section as the employees of the Corporate Debtor were continued, and no workers or employees had raised this issue. Conclusion: The Tribunal dismissed both appeals, upholding the Adjudicating Authority's orders and the approved Resolution Plan. The Tribunal found no grounds to interfere with the impugned orders, concluding that the appeals lacked merit.
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