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2021 (4) TMI 673 - Tri - IBCApproval of the Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In K.Sashidhar v. Indian Overseas Bank Others 2019 (2) TMI 1043 - SUPREME COURT the Hon ble Apex Court held that if the CoC had approved the Resolution Plan with requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon ble Court observed that the role of the NCLT is no more and no less . The Hon ble Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan as approved by the requisite percent of voting share of financial creditors. Even in that enquiry, the grounds on which the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2) when the Resolution Plan does not conform to the stated requirements. In CoC of Essar Steel 2019 (11) TMI 731 - SUPREME COURT the Hon ble Apex Court clearly laid down that the Adjudicating Authority would not have power to modify the Resolution Plan which the CoC in their commercial wisdom have approved. The Resolution Plan as approved by the CoC under Section 30(4) of the Code meets the requirements of Section 30(2) of the Code and Regulations 37 to 39 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. Compliance with the Insolvency and Bankruptcy Code and CIRP Regulations. 3. Financial terms and payment schedule of the Resolution Plan. 4. Management and control of the Corporate Debtor post-approval. 5. Waivers of liabilities and general reliefs sought by the Resolution Applicant. 6. Role and limitations of the Adjudicating Authority (NCLT). 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 the Successful Resolution Applicants. The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated upon admission of a Petition under Section 9 by this Bench by order dated 30.08.2019. The Resolution Plan was discussed and approved by the Committee of Creditors (CoC) with 100% voting share. 2. Compliance with the Insolvency and Bankruptcy Code and CIRP Regulations: The Resolution Plan was checked for compliance with the Code and Regulations, specifically Regulations 38 and 39 of the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) Regulations, 2016. The Applicant submitted Form H under Regulation 39(4) and confirmed that the Plan is in compliance with the provisions of the Code and the Regulations. The Plan also confirmed that the Resolution Applicant is not ineligible under Section 29A of the Code. 3. Financial terms and payment schedule of the Resolution Plan: The Resolution Plan proposed a total payment of ?1500 Lakhs for the resolution of the Corporate Debtor, funded through secured loans, equity, or unsecured loans. The payment schedule detailed the disbursement of funds within 12 months, including priority payment of CIRP costs, financial creditors, employees and workmen dues, and operational creditors. The Plan provided for the extinguishment of existing share capital and infusion of fresh share capital by the Resolution Applicant. 4. Management and control of the Corporate Debtor post-approval: The Board of Directors of the Corporate Debtor will consist of Mr. Rajabhau B. Shinde and Mrs. Pratibha R. Shinde. The Resolution Applicant proposed to retain all human resources and key managerial personnel of the Corporate Debtor. A mechanism for supervision and implementation of the Resolution Plan was proposed, including the formation of a monitoring committee. 5. Waivers of liabilities and general reliefs sought by the Resolution Applicant: The Resolution Applicant sought waivers of liabilities under the Companies Act, FEMA, Labour Laws, and other statutory dues. It was clarified that the Resolution Applicant is liable to make payments as per the Resolution Plan up to ?15 Crores only. General reliefs and concessions were sought, but the Applicant needs to approach the concerned authorities for necessary permits and licenses. 6. Role and limitations of the Adjudicating Authority (NCLT): The NCLT's role is limited to ensuring that the Resolution Plan meets the requirements specified in Section 30(2) of the Code. The Tribunal referred to the Supreme Court's rulings in the cases of Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta and K. Sashidhar v. Indian Overseas Bank, which emphasize that the Adjudicating Authority cannot modify the Resolution Plan approved by the CoC in their commercial wisdom. The Tribunal's discretion is limited to scrutinizing the Plan within the parameters of Section 30(2) of the Code. Order: (i) The Resolution Plan submitted by Mr. Rajabhau B. Shinde and Mrs. Prathibha R. Shinde is approved and binding on all stakeholders. (ii) The Memorandum of Association and Articles of Association of the Corporate Debtor shall be amended accordingly. (iii) No creditors of the erstwhile Corporate Debtor can claim anything other than the liabilities referred to in the Resolution Plan. (iv) The moratorium under Section 14 of the Code shall cease to have effect. (v) The Applicant shall supervise the implementation of the Resolution Plan and file periodical status reports. (vi) The Applicant shall forward all records relating to the conduct of the CIRP and the Resolution Plan to the IBBI. (vii) The Applicant shall send a certified copy of this Order to the CoC and the Resolution Applicant for compliance.
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