2021 (2) TMI 255 - Tri - Insolvency and Bankruptcy

Seeking approval of the Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The Resolution Applicants on the persuasion of this Bench agreed to increase the payment from ₹ 2,00,000/- to ₹ 10,00,000/- against the actual liability with respect to workmen employees. Accordingly, the Representative of Resolution Applicants, during the hearing, agreed to increase the amount payable to workmen employees to ₹ 10,00,000 (from ₹ 2,00,000). The Resolution Applicant has sought certain reliefs, concessions, waivers. We however are not inclined to grant such concessions or waivers. The Resolution Applicant needs to approach the authorities concerned for permits, if required (such as licenses, renewal of license, electricity connection etc.), and same will be considered by the authorities in accordance with law. The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39(4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law - Application allowed.

Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016.
2. Constitution and functioning of the Committee of Creditors (CoC).
3. Compliance with the Insolvency and Bankruptcy Code and related regulations.
4. Financial terms and payment schedule of the Resolution Plan.
5. Management and control of the Corporate Debtor post-approval.
6. Performance security and reliefs sought by the Resolution Applicants.
7. Compliance with mandatory contents of the Resolution Plan under the Code and CIRP Regulations.
8. Reliefs, concessions, and waivers sought by the Resolution Applicants.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016:
The Application was filed by the Resolution Professional seeking approval of the Resolution Plan submitted by Constantia Corporate Shared Services Private Limited and Alfa Buildhome Private Limited. The Tribunal approved the Resolution Plan as it met the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A), and 39(4) of the Regulations.

2. Constitution and functioning of the Committee of Creditors (CoC):
The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was ordered on 07.06.2019, and the Applicant was appointed as the Interim Resolution Professional (IRP). The CoC was constituted after verification of claims from the creditors. The CoC confirmed the Applicant as the Resolution Professional (RP) in its first meeting on 09.07.2019. The CoC approved the Resolution Plan with a voting share of 92.46%.

3. Compliance with the Insolvency and Bankruptcy Code and related regulations:
The Applicant published a public announcement inviting claims from creditors and constituted the CoC. The CIRP period was extended by 90 days up to 03.03.2020. Two sets of registered valuers were appointed to determine the 'fair value' and 'liquidation value' of the Corporate Debtor. The Resolution Plan was found to be in compliance with the Code and Regulations.

4. Financial terms and payment schedule of the Resolution Plan:
The Resolution Plan included a detailed payment schedule and financial terms. The total contribution as per the Resolution Plan was ?32.28 Crore, including the settlement of Resolution Debt and CIRP cost aggregating to ?11.50 Crore and an additional ?20.78 Crore for setting up a new cement depot. The payment schedule was clearly outlined with specific time periods for the infusion of funds.

5. Management and control of the Corporate Debtor post-approval:
The management and control of the business of the Corporate Debtor were to be with the Resolution Applicants and the management appointed by them. A Monitoring Committee was proposed to oversee the implementation of the Plan after the effective date until the closing date.

6. Performance security and reliefs sought by the Resolution Applicants:
The Resolution Applicants provided a Bank Guarantee of ?1,00,00,000/- issued by State Bank of India. The Tribunal did not grant the reliefs, concessions, and waivers sought by the Resolution Applicants, directing them to approach the concerned authorities for necessary permits and approvals.

7. Compliance with mandatory contents of the Resolution Plan under the Code and CIRP Regulations:
The Resolution Plan provided for the payment of CIRP cost in full and in priority, payment to operational creditors, and treatment of dissenting financial creditors in compliance with Regulation 38. The Applicant confirmed that the plan considered the interests of all stakeholders and was in compliance with the Code and Regulations.

8. Reliefs, concessions, and waivers sought by the Resolution Applicants:
The Tribunal did not grant the requested reliefs, concessions, and waivers, directing the Resolution Applicants to seek necessary approvals from the appropriate authorities. The approval of the Resolution Plan was not construed as a waiver of any statutory obligations of the Corporate Debtor.

Order:
The Tribunal allowed the Application and approved the Resolution Plan, making it effective from the date of the order. The Plan was binding on all stakeholders, including the Corporate Debtor, its employees, members, creditors, and government authorities. The moratorium under Section 14 of the Code ceased to have effect from the date of the order. The Applicant was directed to supervise the implementation of the Resolution Plan and file periodic status reports. All records relating to the CIRP and the Resolution Plan were to be forwarded to the IBBI.

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