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2020 (10) TMI 583 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - Implementation of various actions proposed to be taken pursuant to this Resolution Plan - direction that this Resolution Plan shall be binding on the Company together with its employees, members, Creditors (including any assignees and successors), guarantors and all other stakeholders affected by the Resolution Plan and that accordingly, the approval of such employees, members, Creditors, guarantors and other stakeholders (including any Governmental Authorities) shall not be separately required to be undertaken, whether before or after the Vesting Date. HELD THAT - Section 30(6) of the Code enjoins the resolution professional to submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority. Section 31 of the Code deals with the approval of the resolution plan by the Adjudicating Authority, if it is satisfied that the resolution plan as approved by the committee of creditors under section 30(4) meets the requirements as referred to in section 30(2) - Thus, before approving the Resolution plan, it is the duty of the Adjudicating Authority that it should satisfy itself that the Resolution plan as approved by the COC meets the requirements as referred to in subsection (2) of Section 30. The RP has complied with the code in terms of Section 30(2)(a) to 30(2)(f) and Regulations 38(1), 38(l)(a), 38(2)(a), 38(2)(b), 38(2)(c) 38(3) of CIRP regulations - The identity of the Resolution Applicants have been duly verified by the RP and affidavit as per section 30(1) of the Code has been obtained from the Resolution Applicants stating that they are not ineligible U/s 29A of the IB Code, 2016. The Plan also provides for keeping the Company as a going concern and operate in its normal course of business upon implementation of Resolution Plan. There is no objection filed by any other person in this regard. The Resolution Plan includes a statement under regulation 38(1A) of the CIRP Regulations as to how it has dealt with the interest of the stake -holders in compliance with the Code and Regulations thereunder - It is also evident that the Resolution Plan placed before this Adjudicating Authority, was approved by the Committee of Creditors in the CoC meeting held on 31.08.2019 with 100% votes cast in favour of Approval of Resolution Plan. Resolution plan approved.
Issues Involved:
1. Approval of the Resolution Plan. 2. Binding Nature of the Resolution Plan. 3. Extinguishment of Liabilities. 4. Compliance with Legal Provisions. 5. Constitution of Monitoring Committee. 6. Filing with Registrar of Companies (ROC). 7. Tax Liabilities. 8. Termination of Employment Contracts. 9. Ceasing of Moratorium Order. 10. Incidental, Consequential, and Supplemental Matters. 11. Financial Proposal and Distribution. 12. Treatment of Ongoing Litigation and Violations. 13. Interests of Stakeholders. 14. Other Terms and Conditions. 15. Reliefs and Concessions. Detailed Analysis: 1. Approval of the Resolution Plan: The Tribunal considered an interlocutory application filed by the Resolution Professional (RP) under sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016, along with relevant regulations and rules. The RP sought approval of the Resolution Plan submitted by the consortium of M/s. Terapanth Foods Limited and M/s. Rav's Steels Private Limited. 2. Binding Nature of the Resolution Plan: The RP requested an order to make the Resolution Plan binding on the Company, its employees, members, creditors, guarantors, and all other stakeholders. This includes government authorities, without needing separate approvals for implementation actions proposed in the Resolution Plan. 3. Extinguishment of Liabilities: The RP sought an order for the extinguishment of all liabilities of the Company, including inquiries, investigations, or proceedings related to any claims or demands against the Corporate Debtor for periods before the Vesting Date. 4. Compliance with Legal Provisions: The RP confirmed that the Resolution Plan complies with the interests of all stakeholders and adheres to the Insolvency and Bankruptcy Code, 2016. The Tribunal verified that the plan conforms to sections 30(2) and 31 of the Code, ensuring it does not contravene any existing laws. 5. Constitution of Monitoring Committee: An order was sought for the constitution of a Monitoring Committee to oversee the implementation of the Resolution Plan. 6. Filing with Registrar of Companies (ROC): The RP requested an order directing the Company to file a certified copy of the Tribunal's order electronically with the ROC, Hyderabad, for registration. 7. Tax Liabilities: The RP sought a declaration that neither the Resolution Applicant nor the Company would be liable for any taxes arising from actions taken to implement the Resolution Plan. 8. Termination of Employment Contracts: An order was requested to terminate all contracts of employment or consultancy with existing shareholders or their relatives, effective from the NCLT Approval Date. 9. Ceasing of Moratorium Order: The RP requested that the moratorium order under section 14 cease to have effect from the date of approval of the Resolution Plan, and that all records related to the insolvency resolution process be forwarded to the Board. 10. Incidental, Consequential, and Supplemental Matters: The RP sought orders for incidental, consequential, and supplemental matters to ensure the effective implementation of the Resolution Plan, including directions for government authorities to expedite necessary actions. 11. Financial Proposal and Distribution: The Resolution Plan proposed an infusion of INR 34.5 Crores for various purposes, including payment to financial creditors, operational creditors, and CIRP expenses. The plan detailed the distribution of amounts to various stakeholders and emphasized the priority of operational creditors over financial creditors. 12. Treatment of Ongoing Litigation and Violations: The RP sought waivers for all non-compliances and ongoing litigations against the Corporate Debtor, including tax and duty benefit schemes. The plan proposed that all such issues be deemed settled upon approval of the Resolution Plan. 13. Interests of Stakeholders: The Resolution Plan aimed to revive the Corporate Debtor as a going concern, contributing to employment and income generation. The plan focused on operational excellence to preserve the economic value of the Corporate Debtor's assets. 14. Other Terms and Conditions: The RP outlined various terms and conditions, including the binding effect of the Resolution Plan, timelines for implementation, and the handling of company assets. The plan also included provisions for the appointment of new directors and the termination of existing professionals. 15. Reliefs and Concessions: The RP requested several reliefs and concessions from government authorities, including exemptions from stamp duty, taxes, and penalties. The plan also sought waivers for non-compliances and contingent liabilities. Tribunal's Decision: The Tribunal approved the Resolution Plan, confirming its compliance with sections 30(2) and 31 of the Insolvency and Bankruptcy Code, 2016. The plan was deemed binding on all stakeholders, and the RP was directed to supervise its implementation. The moratorium order ceased to have effect, and the RP was instructed to forward all records to the IBBI. The Tribunal clarified that any statutory obligations or liabilities arising from the approved Resolution Plan must be dealt with by the appropriate authorities as per relevant laws.
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