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2024 (9) TMI 324 - Tri - Insolvency and BankruptcyApplication filed by the Applicant Under Section 60(5) (c) of the Insolvency and Bankruptcy Rules 2016 read with Rule 11 of NCLT Rules 2016 - Capital Structure Related/Share Issuance/ ROC - Financial Creditors - Operational Creditors - Legal/ Litigations - Taxation. Capital Structure Related/Share Issuance/ ROC Related - HELD THAT - A direction may be issued that on the Transfer Date the entire existing Equity Shares and Preference Shares issued by the Corporate Debtor (held by the erstwhile Promoters Group as well as Captive Customers) shall stand cancelled without any further act or deed (Capital Reduction) - A direction may be issued that on the Transfer Date the Corporate Debtor may issue new shares worth INR 10, 00, 000/- (Indian Rupees Ten Lacs only) (100, 000 equity shares @ Rs. 10 each (Rupee Ten each) which will be issued and allotted to Innopark (India) Private Limited and its nominees - Post the infusion of Rs. 10, 00, 000 (Indian Rupees Ten Lacs only) towards Equity Shares allotment a direction may be issued that the Bidder may be permitted to structure the balance amount of INR 1, 36, 44, 000/- (Indian Rupees One Crore Thirty-Six Lacs Forty-Four Thousand only) by way of Optionally Convertible Debentures/Non-Convertibles Debentures/Secured Term Loan or such other instrument as may be decided from time to time with terms and conditions as mutually agreed between the Bidder and the Corporate Debtor. Financial Creditors - HELD THAT - All accrued or unpaid interest including penal interest claim fee commissions charges etc. in relation to the financial debt of the Corporate Debtor arising for any period until the Transfer Date shall stand permanently extinguished and the Corporate Debtor or the Bidder shall at no point of time be directly or indirectly held responsible or liable in relation thereto - Other than amount received by the Liquidator from the Bidder which is distributable under Section 53 of IBC all other dues including claims or demands made by or liabilities or obligations owed or payable to (including any demand for any loss or damages principal interest compound interest penal interest liquidated damages notional or crystalized mark to mark losses on derivatives including claims under existing outstanding Bank Guarantees or Corporate Guarantees (whether claimed or not) or claims under existing outstanding Letter of Credits and other charges already accrued accruing or in connection with any third party claims) any actual or potential financial creditors of the Corporate Debtor or in connection with any debt of the Corporate Debtor (including those arising out of any contractual liability such as corporate guarantee pledge shortfall undertaking or similar instruments issued by Corporate Debtor to secure loans taken by its subsidiaries or associate company or any other person and any transaction in derivatives) whether admitted or not due or contingent asserted or un-asserted crystalized or un-crystalized known or unknown disputed or undisputed present or future whether or not set out in the audited financial statements or the list of stakeholders in relation to any period prior to the Transfer Date shall on and from the Transfer Date stand permanently extinguished by virtue of the order of the Adjudicating Authority and the Corporate Debtor or the Bidder shall at no point of time be directly or indirectly held responsible or liable in relation thereto. Operational Creditors - HELD THAT - The requests regarding settlement of liabilities towards Operational Creditors/Statutory Dues upon distribution of proceeds under Section 53 of the IBC extinguishment of demands interest and penalty charges up to the Transfer Date and waiver of past present or future claims related to operational creditors intercorporate loans and non-convertible debentures granted. Legal/Litigations - HELD THAT - The Bidder hereby reiterate that from the Transfer Date all the liabilities litigations proceedings of whatever nature in relation to liabilities or obligations owed or payable to any creditor of the Corporate Debtor including those relating to direct or indirect taxation or of any other nature in respect of the issues claims etc. pertaining to the period prior to the Transfer Date shall cease and the Corporate Debtor and Bidder shall not be prosecuted or liable for any civil or any other consequence including penalty arising from any such offence. Further no action shall be taken against any property of the Corporate Debtor and/or the Bidder in relation to an offence committed prior to the Transfer Date upon change in control of the Corporate Debtor in favour of the Bidder. Taxation - HELD THAT - A direction be issued that the Corporate Debtor and the Bidder shall not be liable for from all Taxes levies fees transfer charges transfer premiums surcharges interests penal charges and any such other levies that arise from or relate to the Acquisition since payment of these amounts may make the Acquisition unviable. Income tax authorities to allow representation of the case/appeal for the different financial years without any additional burden on the Corporate Debtor and/or Bidder for the income tax notices/ demands/ penalties/ assessments/ adjustments of the accumulated losses (including but not limited to additions/ adjustments under Transfer Pricing under the Income Tax Act 1961) up to the Transfer Date where the Corporate Debtor failed to represent the case effectively. Such representation/ appeal should not be treated as time barred - On and from the Transfer Date any debit or credit being the balancing figure shall be adjusted by the Corporate Debtor in the capital/other reserve at its sole discretion and the same shall be deemed to be in compliance with the applicable accounting standards without any tax implications on the Corporate Debtor upon such adjustment. Petition allowed in part.
Issues Involved:
1. Capital Structure Related/Share Issuance/ROC Related 2. Financial Creditors' Claims Related 3. Operational Creditors 4. Legal/Litigations 5. Taxation 6. General Reliefs Issue-wise Detailed Analysis: 1. Capital Structure Related/Share Issuance/ROC Related: The Applicant sought directions for the cancellation of existing equity and preference shares of the Corporate Debtor without further actions, issuance of new shares worth INR 10,00,000 to Innopark (India) Private Limited and its nominees, and the structuring of the balance amount through various financial instruments. Additionally, the Applicant requested the extinguishment of past liabilities, penalties, and fees related to non-compliance with the Companies Act up to the Transfer Date. The court granted these requests. 2. Financial Creditors' Claims Related: The Applicant requested the extinguishment of all accrued or unpaid interest, claims, fees, commissions, and charges related to the financial debt of the Corporate Debtor up to the Transfer Date. They also sought the release of charges over all assets of the Corporate Debtor upon payment of the Consideration and the upgrade of the Corporate Debtor's account to "Standard Category" from NPA. The court granted these requests, including the issuance of No-objection Certificates for charge satisfaction and regularization of accounts. 3. Operational Creditors: The Applicant sought the settlement of liabilities towards Operational Creditors/Statutory Dues upon distribution of proceeds under Section 53 of the IBC, extinguishment of demands, interest, and penalty charges up to the Transfer Date, and waiver of past, present, or future claims related to operational creditors, intercorporate loans, and non-convertible debentures. The court granted these requests. 4. Legal/Litigations: The Applicant requested that the Corporate Debtor's liability for offenses committed before the issuance of the Sale Certificate under the liquidation process cease and that no action be taken against the Corporate Debtor's property for such offenses. They also sought the cessation of liabilities, litigations, and proceedings related to the period before the Transfer Date. The court granted these requests. 5. Taxation: The Applicant sought exemption from all taxes, levies, fees, transfer charges, and other such levies arising from or related to the Acquisition. They requested the completion and closure of all tax assessments, proceedings, and demands for periods prior to the Transfer Date and the waiver of any tax liabilities. The court directed the Applicant to approach the concerned authorities for decisions as per prevailing law, rules, and regulations. 6. General Reliefs: The Applicant sought directions to ensure that no consents, licenses, approvals, rights, entitlements, benefits, and privileges granted to the Corporate Debtor be terminated due to the initiation of insolvency/liquidation or change of control. They also requested the continuation of existing consents and licenses and the availability of additional licenses and consents required for running the business as a going concern. The court granted these requests, ensuring the rights of the Corporate Debtor to recover amounts due from other creditors. Conclusion: The court partly allowed the application, granting most of the reliefs and directions sought by the Applicant, with specific directions for the Applicant to approach concerned authorities regarding taxation issues. The application was disposed of accordingly.
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