2022 (7) TMI 299 - Tri - Insolvency and Bankruptcy

Seeking approval of a Resolution Plan in respect of Sri Balaji Forest Products Private Limited - approval of the resolution plan by the Committee of Creditors, already done - Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016 read with regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT - The Resolution Plan has been approved with 93.46% voting share. As per the CoC, the plan meets the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the plan effective after approval by this Bench - On perusal of the documents on record, it is also satisfying that the Resolution Plan is in accordance with sections 30 and 31 of the IBC and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Seeking grant of time to comply with the statutory obligations/seeking sanctions from governmental authorities - HELD THAT - The Resolution Applicant is directed to do the same within one year as prescribed under section 31(4) of the Code - In case of non-compliance of this order or withdrawal of Resolution Plan, the CoC shall invoke the Performance Bank Guarantee furnished by the Resolution Applicant. The Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect - Moratorium imposed under section 14 shall cease to have effect from the date of this order - Application allowed.

Summary

Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with CIRP Regulations and IBC provisions.
3. Objections raised by stakeholders.
4. Reliefs and concessions sought by the Successful Resolution Applicant.
5. Implementation and supervision of the Resolution Plan.

Detailed Analysis:

1. Approval of the Resolution Plan:
The application was filed under Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016, seeking approval of the Resolution Plan for Sri Balaji Forest Products Private Limited. The Resolution Plan was approved by the Committee of Creditors (CoC) with a 93.46% voting share, meeting the requirements for being viable and feasible for the revival of the Corporate Debtor.

2. Compliance with CIRP Regulations and IBC Provisions:
The Resolution Professional (RP) complied with various provisions of the IBC and CIRP Regulations. Public announcements were made, and claims were invited from creditors. The RP appointed valuers to determine the fair market value and liquidation value of the Corporate Debtor's assets. The Resolution Plan adhered to the mandatory contents as specified under Regulation 38 and 39 of the CIRP Regulations, ensuring priority payment to operational creditors and addressing the interests of all stakeholders.

3. Objections Raised by Stakeholders:
One objection was raised by Sri Balaji Logs Private Limited regarding ingress and egress rights, arguing that there was no recorded agreement and that it was an encroachment. The tribunal found that the approach road was essential for accessing the Corporate Debtor's premises and granted the Successful Resolution Applicant the right of way. Additionally, the inclusion of the property of the suspended board of directors and guarantors in the Resolution Plan was contested. The tribunal upheld the inclusion, citing the Vanguard Credit & Holdings Pvt. Ltd. case and the binding nature of the approved Resolution Plan on all stakeholders, including guarantors.

4. Reliefs and Concessions Sought by the Successful Resolution Applicant:
The Successful Resolution Applicant sought various reliefs and concessions, including exemptions from taxes, renewal of licenses, waiver of past non-compliances, and extinguishment of liabilities not part of the Resolution Plan. The tribunal granted these reliefs, subject to compliance with applicable laws and regulations. Specific reliefs included exemptions from stamp duty, renewal of pollution control consents, and regularization of accounts by the Reserve Bank of India.

5. Implementation and Supervision of the Resolution Plan:
The tribunal directed the Successful Resolution Applicant to comply with statutory obligations and seek necessary sanctions from governmental authorities within one year. The RP was instructed to hand over all records and premises to the Resolution Applicant for the commencement of operations. The tribunal also provided for the formation of a Monitoring Committee comprising secured financial creditors and the Chairman to facilitate the implementation of the Resolution Plan.

Findings:
The tribunal found that the Resolution Plan complied with sections 30 and 31 of the IBC and regulations 38 and 39 of the CIRP Regulations. The plan was deemed viable and feasible for the revival of the Corporate Debtor. The tribunal approved the Resolution Plan, making it binding on the Corporate Debtor and all stakeholders. The moratorium imposed under section 14 ceased to have effect from the date of the order.

Conclusion:
The Resolution Plan for Sri Balaji Forest Products Private Limited was approved, subject to the observations made in the order. The RP was discharged from duties, and the Successful Resolution Applicant was granted access to all necessary records and premises to finalize the further line of action required for starting operations. The tribunal provided liberty for any application required in connection with the implementation of the Resolution Plan.