2022 (5) TMI 16 - Tri - Insolvency and Bankruptcy

Seeking issuance of no-objection certificate for transfer of the premises - extension of time for making payment by the application under the resolution plan approved - directions to compute the time to make the payment under the Resolution plan on and from the date of the order to be passed - HELD THAT - Even though the upfront payment of ₹ 5.0 Cr was made as per the plan, the SRA was not able to make the requisite payment as per the plan due to intervention by Pandemic and also due to the fact that two units of the business of the corporate debtor were not handed over to him by the IMC. The payment plan got further derailed due to holding back of the NOC by the financial creditors/IMC - In terms of the approved resolution plan attached with the application, it is seen that the SRA had proposed to dispose of non-business assets of the CD in accordance with Regulation 37(a) (d) of the CIRP regulations, and had stated that the same may be used for payment of the Resolution amount proposed under the plan. The Applicant had at least twice written to Respondent Nos. 2 and 3 dated 24.03.2021 and 20.09.2021 seeking NOC for 'sale of the asset but the respondent did not issue the same. Had this NOC been issued on time the remaining proceeds of the plan could have been met from the sale of the assets which were otherwise provided for in the resolution plan. Further whereas IMC had extended the time for payment till 11.03.2021 as depicted in the minutes of the 4th meeting of the IMC, still on 22.02.2021, chose to file I.A. No. 252/2021 before this Tribunal for proceeding with the liquidation of the corporate debtor and pursued the application despite receiving sizeable payments in March 2021, thus showing their disinterest in putting the Corporate Debtor back on its feet in accordance with the approved resolution plan. Application allowed.

Summary

Issues:
Interlocutory Application under section 60 (5) of the Insolvency and Bankruptcy Code, 2016 for various reliefs including issuance of a no-objection certificate and facilitation of premises transfer.

Detailed Analysis:

1. Facts of the Case: The Corporate Insolvency Resolution Process (CIRP) of a company was initiated, and the Resolution Plan submitted by a Successful Resolution Applicant was approved by the CoC. However, due to payment delays by the Successful Resolution Applicant, the matter was recommended for liquidation.

2. Applicant's Submissions: The Applicant sought the issuance of a no-objection certificate for the sale of non-business assets of the Corporate Debtor, as per the Resolution Plan. The Applicant alleged that the Respondents acted unfairly by delaying the issuance of the required certificate.

3. Respondent's Submissions: The Respondents did not file a reply affidavit but mentioned during hearings that approvals from competent authorities were pending for the sale of properties proposed by the Applicant.

4. Court's Analysis and Finding: The Court noted that despite an upfront payment, delays occurred in further payments due to various reasons, including the pandemic and non-handover of business units. The Court found that the IMC did not properly facilitate the Resolution Plan implementation.

5. Court's Order: The Court directed the financial creditors to issue a clear no-objection certificate as per the Resolution Plan. The Successful Resolution Applicant was instructed to implement the plan diligently within six weeks. The IMC was tasked with supervising the plan's implementation and filing a status report. The Court clarified that personal guarantors could be pursued for recovery, but not the properties being disposed of under the Resolution Plan.

6. Conclusion: The application was allowed, and specific directions were given to ensure the effective implementation of the Resolution Plan. The Court emphasized the importance of timely actions and compliance with the approved plan to avoid further delays or liquidation proceedings.