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2020 (7) TMI 122 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - Section 31(1) of the Code - CIRP process - extension of CIRP period till 3-1-2019 - HELD THAT - The resolution plan states that upon NCLT Approval Date, an Interim Monitoring Committee will be constituted. The constitution of the Committee is given in para no VIII of the plan. The terms of the plan and its implementation schedule is stated to be 90 days from the approval of the plan by the Adjudicating Authority. The RA will make full and final payment of ₹ 5150 lakhs to secured financial creditor i.e. SBI out of which ₹ 500 lakhs will be deposited at the end of 30 days from the approval of the resolution plan and the balance ₹ 4650 lakhs will be paid in an Escrow Account within 90 days from the approval of the resolution plan. The payment of ₹ 24.43 lakhs to operational creditors is proposed to be made in priority over secured and unsecured financial creditors. Payment of dues to workmen and employees is proposed to be made within 30 days of approval of resolution plan by AA in the manner provided for in Para 11.2 of the Resolution Plan. The requirements under section 31(1) of the Code are satisfied in the present case. In para No. 4 of Form H the RP has certified that the resolution plan complies with all the provisions of the Code and Regulations and does not contravene any of the provisions of the law for the time being in force. The RP has also certified that the resolution applicant New Ram traders has submitted affidavit pursuant to Section 30(1) of the Code confirming its eligibility under section 29A of the Code to submit the resolution plan and the contents of the said affidavit are in order - the decision taken by the financial creditors falls within the ambit of its commercial and banking wisdom and is therefore, not being interfered with. In view of the provisions of Section 30(4) of the Code, we approve the resolution plan submitted by M/s. New Ram Traders as approved by the CoC. The resolution so approved shall be binding on the corporate debtor and its employees, members, creditors including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. Resolution Plan approved - moratorium cease to have effect - RP shall forward all records relating to the conduct of the CIRP and the resolution plan to the Board to be recorded on its database.
Issues Involved:
1. Approval of the resolution plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with Section 30(2) of the Insolvency and Bankruptcy Code, 2016. 3. Directions from the National Company Law Appellate Tribunal (NCLAT) and reconstitution of the Committee of Creditors (CoC). 4. Evaluation and approval process of the resolution plan by the CoC. 5. Compliance with the provisions of the Insolvency and Bankruptcy Code and associated regulations. 6. Binding nature and implementation of the approved resolution plan. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016: The Resolution Professional (RP) filed CA No. 893/2019 seeking approval of the resolution plan dated 25-1-2018, as amended on 18-9-2019, submitted by M/s New Ram Traders. The resolution plan was approved by the CoC with 100% voting share in favor of it, and the RP sought the Tribunal's approval under Section 31(1) of the Code. 2. Compliance with Section 30(2) of the Insolvency and Bankruptcy Code, 2016: The RP confirmed that the resolution plan complied with all provisions of the Code and CIRP Regulations. The plan provided for the payment of insolvency resolution process costs, management of the corporate debtor's affairs, and did not contravene any law. The plan also proposed to pay 2.5% of the admitted amount to operational creditors and 0.1% of the total admitted claim of the Corporate Guarantee. 3. Directions from the National Company Law Appellate Tribunal (NCLAT) and Reconstitution of the Committee of Creditors (CoC): The NCLAT directed the Tribunal not to pass any orders under Section 31 until the final adjudication of Andhra Bank's appeal. The NCLAT reconstituted the CoC to include Andhra Bank and directed the RP to place the approved resolution plan before the reconstituted CoC. 4. Evaluation and Approval Process of the Resolution Plan by the CoC: The CoC initially approved the resolution plan dated 25-1-2018 but rejected it later. After several revisions and deliberations, the final revised resolution plan was submitted on 30-8-2018 and approved by the CoC in its 16th meeting held on 23-9-2019 with 100% voting share. 5. Compliance with the Provisions of the Insolvency and Bankruptcy Code and Associated Regulations: The RP filed compliance certificates and affidavits confirming that the resolution plan met all legal requirements. The RP certified that the plan was feasible, viable, and did not contravene any law. The resolution plan included provisions for its effective implementation, as required under Section 31(1) of the Code. 6. Binding Nature and Implementation of the Approved Resolution Plan: The Tribunal approved the resolution plan submitted by M/s New Ram Traders, making it binding on the corporate debtor and all stakeholders. The moratorium order ceased to have effect, and the RP was directed to forward all records related to the CIRP and resolution plan to the Board. Conclusion: The Tribunal approved the resolution plan submitted by M/s New Ram Traders, as it met all legal requirements and was approved by the CoC with 100% voting share. The plan is binding on all stakeholders, and the moratorium order ceased to have effect. The RP was directed to forward all records to the Board.
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