2018 (9) TMI 850 - Tri - Insolvency and Bankruptcy

Resolution plan eligibility - corporate insolvency process - meeting the requirement as per the provisions of the Code and Regulation 38(l)(a) of the CIRP Regulation - Held that - Provision in the Resolution Plan can be provided for execution of the conveyance deed by the Corporate Debtor in the name of the Applicant upon fulfilling the final payment and that a deed of conveyance to be executed in the name of the Applicant by the RP and an affidavit to that effect has been filed by the RP. So also a revised plan has been filed by the RP on 2nd August, 2018 incorporating a clause in the Loan Profile for sale of the property to the applicant in CA with in 30 days of approval of the resolution plan. Making the said provision in the Resolution Plan would satisfy the requirement of the claimant. (i) The Resolution Plan of Mr. S. K. Mitra, which is approved by the CoC with 100% voting percentage, is hereby approved under provisions of Section 31(1) of the Insolvency and Bankruptcy Code, 2016, which will be binding on the Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan. (ii) The revival plan of the company in accordance with the approved Resolution Plan shall come into force with immediate effect. (iii) The moratorium order passed under Section 14 shall cease to have effect. (iv) The Resolution Professional shall forward all records relating to the conduct of the Corporate Insolvency Resolution Process and the Resolution Plan to the Insolvency and Bankruptcy Board of India to be recorded on its database. (v) Before parting with, it appears that I have to endorse my Appreciation to the work rendered by the Resolution Professional, Mr. Prabhjit Singh Soni for having a successful resolution process so as to find out a stakeholder having repute to take over the stressed assets of the corporate debtor/ Southern Cooling Towers Pvt. Ltd.

Summary

Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016.
2. Objection by Smt. Rinita Mitra regarding her claim of ?2,47,27,460/-.
3. Objection by a Buyer regarding the execution of the sale deed for a property.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:
The Resolution Professional (RP) filed an application under Section 30(6) read with Section 31 of the Insolvency and Bankruptcy Code, 2016, for the approval of a Resolution Plan. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, Southern Cooling Tower Pvt. Limited, following an application by an Operational Creditor. The Interim Resolution Professional (IRP) was appointed and continued the process as per the Code and Regulations, completing the CIRP within 180 days. The Resolution Plan was submitted on 16-07-2018 and approved by the Committee of Creditors (CoC) with a 100% voting share. The RP confirmed that the plan complied with all mandatory conditions under Regulation 38 of the CIRP Regulations, safeguarding the interests of all stakeholders and providing terms for payment, implementation, and management of the Corporate Debtor. The Tribunal approved the Resolution Plan, finding it met all requirements under the Code and Regulation 38(l)(a) of the CIRP Regulations.

2. Objection by Smt. Rinita Mitra:
Smt. Rinita Mitra filed an application claiming that she lent ?2,47,27,460/- to the Corporate Debtor and that her claim had not been considered by the RP. She submitted her proof of claim in Form "F" on 23-02-2018, which was rejected by the RP. She then submitted another claim in Form "C" on 14-03-2018, which was also rejected. The RP argued that the public announcement calling for claims was made in widely circulated newspapers, and all claims received up to 21-02-2018 were considered. The RP verified her claim with the books of accounts and found no records supporting her claim. The Tribunal found that Smt. Mitra failed to substantiate her claim with adequate proof and that her claim was not found in the financial statements of the Corporate Debtor. The Tribunal dismissed her application, finding the RP and CoC's rejection of her claim to be legal and proper.

3. Objection by a Buyer:
A Buyer filed an application claiming that he had purchased a property from the Corporate Debtor and paid part of the consideration, but the sale deed was not executed due to the initiation of the Resolution Process. The Buyer argued that he should be considered a Financial Creditor under the amended provisions of the Code. The RP filed an affidavit stating that the CoC approved the Memorandum of Understanding for the sale of the property and that the advance amounts would be adjusted at the time of final payment. The Tribunal directed that a provision be made in the Resolution Plan for the execution of the conveyance deed in favor of the Buyer upon fulfilling the final payment. The Tribunal disposed of the Buyer's application accordingly.

Judgment:
The Tribunal approved the Resolution Plan submitted by Mr. S. K. Mitra, finding it met all requirements under the Insolvency and Bankruptcy Code, 2016, and the CIRP Regulations. The Tribunal dismissed Smt. Rinita Mitra's application, finding her claim unsubstantiated. The Tribunal disposed of the Buyer's application by directing the inclusion of a provision in the Resolution Plan for the execution of the conveyance deed. The Tribunal also appreciated the work rendered by the Resolution Professional, Mr. Prabhjit Singh Soni, for successfully completing the resolution process.