2018 (11) TMI 249 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - approval by resolution by 100% - modified Resolution Plan - Held that - A modified Resolution Plan was filed on 17/9/2018 along with the original affidavit under section 29A of the I & B Code, 2016 of the Resolution Applicant and Form H . On a screening of Form H it is understood that the Resolution Applicant has complied with the direction, and submitted the modified Resolution Plan. The modified Resolution Plan is in compliance of the provisions of the Code and Regulations which provides provisions for implementation and supervision of the Resolution Plan as well as provisions for the payment of debt to the various stakeholders and to the workmen. Clause 7 of Form H dealt with the distribution of amount provided for the stakeholders under the Resolution Plan. The distribution among the stakeholders not at all under challenge from any corner and therefore, the Resolution Plan, which has been approved by vote share of 100% by the Committee of Creditors in compliance of the provisions of the Code and Regulations and confirms to all the requirements as has been specified in the I & B Code, 2016 is liable to be approved

Issues:
1. Application filed under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process.
2. Appointment and replacement of Resolution Professionals.
3. Conduct of Committee of Creditors meetings.
4. Appointment of valuers, auditors, and forensic auditors.
5. Submission and approval of Resolution Plan.
6. Compliance with provisions of the Insolvency and Bankruptcy Code, 2016.
7. Priority of payment to workmen in the Resolution Plan.

Analysis:

1. The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by an operational creditor for initiating the Corporate Insolvency Resolution Process against the corporate debtor. The application was admitted, and various Resolution Professionals were appointed during the proceedings.

2. The initial Interim Resolution Professional was replaced by a new Resolution Professional appointed by the Committee of Creditors. After subsequent replacements and appointments, the final Resolution Professional submitted the Resolution Plan, which was approved by 100% vote share of the Committee of Creditors.

3. Eleven Committee of Creditors meetings were conducted, with the final Resolution Plan being approved unanimously in the 11th meeting. The Resolution Professional ensured the compliance with all requirements under section 30(2) of the Insolvency and Bankruptcy Code, 2016.

4. Valuers, auditors, and forensic auditors were appointed by the Resolution Professional to assess the corporate debtor's assets and financial situation. Various reports were submitted, including valuation reports and forensic audit reports, to facilitate the Resolution Plan.

5. The Resolution Professional certified compliance with all provisions of the Insolvency and Bankruptcy Code, 2016 and submitted the Resolution Plan for approval. The Resolution Plan included details on how it addressed the interests of all stakeholders in accordance with the Code and Regulations.

6. Upon detailed examination of the Resolution Plan, it was noted that the priority of payment to workmen was overlooked. Consequently, the Resolution Professional was directed to modify the Plan to ensure proper payment to workmen, leading to the submission of a modified Resolution Plan in compliance with the Code and Regulations.

7. The modified Resolution Plan, approved by the Committee of Creditors with 100% vote share, was ultimately approved by the Tribunal. The approved Plan would bind all stakeholders involved, and the revival plan would come into force immediately, ceasing the moratorium order. The Resolution Professional was directed to forward all records to the Insolvency and Bankruptcy Board of India, and the case was disposed of accordingly.

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