2021 (6) TMI 840 - Tri - IBC

Approval 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 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 and 38 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 provisions of the Insolvency and Bankruptcy Code and CIRP Regulations.
3. Financial terms and distribution of funds under the Resolution Plan.
4. Means of funds and performance security.
5. Management and supervision of the Corporate Debtor post-approval.
6. Reliefs, concessions, and waivers sought by the Successful Resolution Applicant (SRA).
7. Clerical errors in the Resolution Plan and their rectification.

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 Dr. Bharat Agrawal in consortium with M/s Theta Labs Private Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated by an order dated 14.08.2019, and the Resolution Plan was approved by the Committee of Creditors (CoC) with 96.84% voting share on 04.09.2020.

2. Compliance with the provisions of the Insolvency and Bankruptcy Code and CIRP Regulations:

The Applicant conducted a thorough compliance check of the Resolution Plan in terms of the Code and Regulations 38 and 39 of the CIRP Regulations. The Plan is in compliance with the provisions of the Code and the Regulations, and the Resolution Applicant is not barred under Section 29A of the Code. The Plan meets the requirements of Section 30(2) of the Code, including the payment of CIRP costs, prioritization of Operational Creditors, management of the Corporate Debtor, implementation and supervision of the Plan, and compliance with all legal provisions.

3. Financial terms and distribution of funds under the Resolution Plan:

The total consideration in the plan is ?1283.39 lakh. The distribution includes payments to Secured Financial Creditors, Unsecured Financial Creditors, and Operational Creditors. The Plan prioritizes the payment of CIRP costs and Operational Creditors over Financial Creditors, as per the legal requirements. The detailed financial terms and the allocation of funds are provided in the judgment.

4. Means of funds and performance security:

The Resolution Plan amount is funded by internal accruals and funds to be raised from banks/NBFCs. The SRA provided an Earnest Money Deposit (EMD) of ?50,00,000/- and a Fixed Deposit of ?3 Crores as performance security. The Plan also includes an in-principle sanction letter from Bank of Baroda for additional funding.

5. Management and supervision of the Corporate Debtor post-approval:

The management of the Corporate Debtor will be handled by professionals nominated by the SRA. A Monitoring Agency will be constituted for supervision, consisting of the Applicant (RP), one member of CoC, and one Nominee of the SRA. The reconstituted Board of Directors will take charge on the completion date.

6. Reliefs, concessions, and waivers sought by the Successful Resolution Applicant (SRA):

The SRA sought certain reliefs, concessions, and waivers as detailed in Clause 16 of the Resolution Plan. The Tribunal referred to the observation of the Hon’ble Supreme Court in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors. regarding the treatment of undecided claims and the importance of providing a "fresh slate" to the successful resolution applicant.

7. Clerical errors in the Resolution Plan and their rectification:

The Applicant identified and rectified clerical errors in the Resolution Plan, including incorrect dates, names, and GSTN details. The Tribunal ordered the corrections accordingly.

Conclusion:

The Tribunal, satisfied with the compliance of the Resolution Plan with the provisions of the Code and Regulations, approved the Resolution Plan submitted by Dr. Bharat Agrawal in consortium with M/s Theta Labs Private Limited. The Plan is binding on the Corporate Debtor, its employees, members, creditors, and other stakeholders. The moratorium under Section 14 of the Code ceased to have effect from the date of the order. The Applicant is tasked with supervising the implementation of the Resolution Plan and filing periodic status reports. The Tribunal also directed the necessary amendments to the Memorandum of Association and Articles of Association and required the Applicant to forward all records to the IBBI.

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