2021 (3) TMI 503 - Tri - Insolvency and Bankruptcy

Approval of Resolution Plan - sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) read with regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) - HELD THAT - The resolution professional has examined the resolution plan and has found it to be in compliance with section 30(2) of the IBC read with regulation 38 of the CIRP Regulations - The resolution plan approved by the committee of creditors meets the requirements laid down in various clauses of section 29A and section 30(2). As per the list of the company as mentioned in information memorandum of the company, total claims filed by the financial creditors of the company amount to INR 126.57 crores out of which claims aggregating to INR 126.57 crores have been verified and admitted for the purpose of CIRP by the resolution professional - This Bench directs the RP to act as the monitoring agency and thus appointed RP as monitoring agency to monitor and supervise the implementation of the resolution plan and the remuneration of the monitoring agency shall be on ₹ 1,50,000 plus taxes and out of pocket expenses at actual. The resolution applicant is allowed to remove and/or substitute the monitoring agency with prior approval of this Adjudicating Authority if the monitoring agency is unable to satisfactorily perform its responsibilities or breaches terms of its appointment - the resolution plan submitted by M/s. Marinaindia Traexim P. Ltd. is found in conformity of section 30(2) of the Code and the same is approved. Resolution plan approved.

Summary

Issues Involved:
1. Approval of the resolution plan under Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with Section 30(2) of the Insolvency and Bankruptcy Code, 2016.
3. Compliance with Regulations 38 and 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
4. Appointment and role of the monitoring agency.
5. Binding nature of the approved resolution plan and cessation of the moratorium order.

Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed under Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking approval of the resolution plan submitted by M/s. Marinaindia Traexim Pvt. Ltd. The corporate insolvency resolution process (CIRP) was initiated on September 12, 2019, and the resolution plan was put to vote and passed with 100% voting rights by the Committee of Creditors (CoC).

2. Compliance with Section 30(2) of the IBC:
The resolution professional examined the resolution plan and found it to be in compliance with Section 30(2) of the IBC, which mandates that the plan should:
- Provide for the payment of insolvency resolution process costs in priority to the repayment of other debts.
- Ensure the repayment of debts of operational creditors in a manner not less than what they would receive in liquidation.
- Provide for the management of the corporate debtor's affairs post-approval.
- Include implementation and supervision mechanisms.
- Not contravene any laws in force.
- Meet other requirements specified by the Board.

The resolution professional certified that the resolution plan submitted by M/s. Marinaindia Traexim Pvt. Ltd. met all these requirements and was approved by the CoC with a 100% voting share.

3. Compliance with Regulations 38 and 39 of the CIRP Regulations:
The resolution plan also met the requirements of Regulations 38 and 39 of the CIRP Regulations, which include:
- Giving priority to the payment of operational creditors over financial creditors.
- Including a statement on how the interests of all stakeholders are dealt with.
- Providing a term and implementation schedule for the plan.
- Ensuring the management and control of the corporate debtor's business during the term.
- Demonstrating feasibility and viability.
- Including provisions for necessary approvals and timelines.

The resolution applicant proposed a total amount of ?13 crores for distribution among financial creditors, with ?3.25 crores to be paid upfront within 30 days of plan approval and the remaining ?9.75 crores within 90 days.

4. Appointment and Role of the Monitoring Agency:
The Bench directed the resolution professional to act as the monitoring agency to supervise the implementation of the resolution plan, with a remuneration of ?1,50,000 plus taxes and out-of-pocket expenses. The resolution applicant is allowed to remove or substitute the monitoring agency with prior approval if it fails to perform satisfactorily.

5. Binding Nature of the Approved Resolution Plan and Cessation of Moratorium:
The approved resolution plan is binding on the corporate debtor, its employees, members, creditors, guarantors, and other stakeholders. With the approval of the resolution plan, the moratorium order under Section 14 of the IBC ceases to have effect. The resolution professional is directed to forward all records related to the CIRP and the resolution plan to the Insolvency and Bankruptcy Board of India (IBBI) for database recording.

Conclusion:
The resolution plan submitted by M/s. Marinaindia Traexim Pvt. Ltd. was found to be in conformity with Section 30(2) of the IBC and was approved. The application I.A. No. 150 of 2020 was disposed of accordingly.