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2021 (11) TMI 949 - Tri - Insolvency and BankruptcySeeking approval of Resolution Plan - section 30(6), 31 and 60 (5) of the Insolvency and Bankruptcy Code, 2016 (Code) read with Rule 11 of the National Company Law Tribunal - HELD THAT - 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. The same needs to be approved. The resolution plan is approved - application allowed.
Issues Involved:
1. Approval of the Resolution Plan under sections 30(6), 31, and 60(5) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with the procedural requirements of the Insolvency and Bankruptcy Code, 2016. 3. Evaluation of the fairness and feasibility of the Resolution Plan. 4. Distribution of the Resolution Amount among various stakeholders. 5. Adherence to legal and regulatory provisions. Detailed Analysis: 1. Approval of the Resolution Plan: The application was filed by the Resolution Professional (RP) seeking approval of the Resolution Plan for Globecon Commercial Services Private Limited under sections 30(6), 31, and 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC). The Resolution Plan was approved by the requisite majority of the Committee of Creditors (CoC) and submitted for approval by the Adjudicating Authority. 2. Compliance with Procedural Requirements: The Corporate Insolvency Resolution Process (CIRP) was initiated by Hangji Global Limited, an Operational Creditor, and admitted on 25.01.2021. Public announcements were made, and the first CoC meeting was held on 23rd February 2021, where the Interim Resolution Professional (IRP) was confirmed as the RP. Subsequent CoC meetings were held to discuss and approve various procedural steps, including the appointment of valuers and transaction auditors, and the publication of Form G for inviting Expressions of Interest (EOI). 3. Evaluation of the Fairness and Feasibility of the Resolution Plan: The Resolution Plan submitted by Hangji Global Limited proposed a total financial proposal of ?40 Lakhs for the full and final settlement of all liabilities. The plan included detailed provisions for the payment of CIRP costs, distribution to Financial Creditors, Operational Creditors, Government Creditors, and other stakeholders. The plan also proposed a fresh fund infusion of ?10 Lakhs as working capital within 12 months from the closing date. The liquidation value and fair value of the Corporate Debtor's assets were also considered, with the fair value being ?1,17,38,350 and the liquidation value being ?23,21,238. 4. Distribution of the Resolution Amount: The Resolution Amount was proposed to be distributed as follows: - Payment of CIRP Costs in full. - Upfront cash payment to Unrelated Financial Creditors within 30 days. - No payment to Related Financial Creditors. - Payment to Operational Creditors on a pro-rata basis. - Payment to Government Creditors on a pro-rata basis. - Transfer of existing equity shares to the Resolution Applicant for a nominal consideration. - Infusion of ?10 Lakhs as working capital. 5. Adherence to Legal and Regulatory Provisions: The Resolution Plan was examined for compliance with Section 30(2) of the IBC, which mandates the payment of CIRP costs, operational creditors' dues, and management of the Corporate Debtor's affairs post-approval. The plan also adhered to the requirements specified by the Board and did not contravene any legal provisions. The RP provided a compliance certificate in "Form H" confirming adherence to the Code and Regulations. Observations of the Adjudicating Authority: The Adjudicating Authority observed that the Resolution Plan met the requirements of Section 30(2) of the IBC and Regulations 37, 38, 38(1A), and 39(4). The plan was approved by the CoC with 100% votes and was found to be in order. The authority emphasized that its role was limited to ensuring compliance with Section 30(2) and could not modify the plan approved by the CoC. Order: The application was allowed, and the Resolution Plan was approved, becoming effective from the date of the order. The plan is binding on all stakeholders, including the Corporate Debtor, its employees, creditors, and government authorities. The moratorium under Section 14 of the Code ceased to have effect. The RP was directed to supervise the implementation of the plan and report the status to the Adjudicating Authority periodically. The RP was also instructed to forward all records to the Insolvency and Bankruptcy Board of India (IBBI) and send certified copies of the order to the CoC and the Resolution Applicant. Conclusion: The Resolution Plan for Globecon Commercial Services Private Limited was approved after thorough scrutiny, ensuring compliance with the IBC and related regulations. The plan proposed a fair distribution of the Resolution Amount among various stakeholders and included provisions for the management and supervision of the Corporate Debtor post-approval. The Adjudicating Authority's decision was guided by the principles of fairness, feasibility, and adherence to legal provisions.
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