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2018 (9) TMI 429

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..... - - - Dated:- 13-3-2018 - Shri Jinan K. R., Member (Judicial) For The Financial Creditor : Ms. Prerna Choudhary, Ranjit Chowdhary, For The Resolution Professional : Amitra Basu, Abhijit Sankar, Aniruddha Roy, Avishek Guha, S.K. Shahrukh Raja, Wrishik Ganguly, Advs. Arun Gupta, FCA, Sanjay Chatterjee, Adv. Jay Saha, Sr. Adv., Ms. Sonali Mukhopadhyay And Debjit Roy For The Resolution Applicant : Samar Roy, Anirban Roy, Debraj Saha, And Debangshu Dinda, Advocate ORDER Per Shri Jinan K. R., Member (J). 1. This is an application filed by the Punjab National Bank/Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code 2016 (in short I B Code) for initiating Corporate Insolvency Resolution Process (in short CIRP) in respect of Divyajyoti Sponge Iron Ltd. / Corporate Debtor. The above application was admitted by this adjudicating authority vide order dated 23rd August, 2017. By admitting this application Mr. Arun Kumar Gupta was appointed as an Interim Resolution Professional (IRP in short) and subsequently he was appointed as Resolution Professional vide order dated 24.10.2017. The period of 180 days for submitting a resolution pla .....

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..... days and pass an order for investigations into the process of approval of resolution plan. 5. One another application CA (IB) No.205/KB/ 2018, was filed by Mr. Prakash Jain of Simplex Credits and Industries Ltd raising objections that the expression of interest submitted by him was not accepted by the resolution professional citing delay in submission and that resolution professional accepted other applicants plan even after there was delay in the submission by such parties and therefore there is discrimination in rejecting his plan. Upon the said allegations he prays for issuing directions to the Resolution Professional to accept the expression of interest of the resolution applicant and to further direct him to make over the Information Memorandum to the CoC and prayed for extension of the period of CIRP for re consideration of the Resolution Plan by the CoC. 6. Heard the Ld. Counsels appearing on the side of the Resolution Professional, Ld. Pr. C.S. appearing for the Resolution Applicant in CA No.172/KB/2018, CA No 205 /KB/ 2018, Ld. Counsel for the workmen and Financial Creditors and perused the records along with the plan submitted by the Resolution Professional dated 19 .....

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..... In the meeting held on 14.02.2018 two resolution plans were finally considered by the CoC out of the four resolution plans submitted by the Resolution Professional. After due deliberation the Plan submitted by CP Ispat Private Limited and Pearls Dealers Pvt. Ltd. was put to vote. The Plan of CP Ispat Private Limited has been approved with 100% voting share and the Resolution Plan submitted by Pearl Dealers Private Ltd ( Omkara Group) was rejected by the Committee of Creditors upon the following reasons:- The Committee felt that accepting any plan after the cut off date of 2.2.2018 would amount to getting into an endless negotiation process with resolution applicants and would also compromise on the sanctity of the whole resolution process which was being conducted in a fool proof manner, and also that such new revised documents had not been considered for voting by the internal approving committees of the financial creditors. 13. The CA (IB) No.205/KB /2018 came up for consideration before this Bench subsequent to the final hearing of the Resolution Plan approved by the CoC. On a careful reading of the report of the resolution professional what I understood is that the Resol .....

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..... allegation also levelled against the Resolution Professional. It is good to read the allegations in the words of the complainant Resolution Applicant in CA No.172/KB/2018. It reads as follows:- Para (e) It is submitted that thereafter the Resolution Professional again contacted the Director of the Resolution Applicant and informed that the Resolution Professional had shared our bid amount with another Resolution Applicant and thereafter another bid was submitted by that Resolution Applicant increasing the amount by ₹ 25 lakhs approx. and hence the decision has been changed. It is submitted that such a process is completely unfair, illegal, malafide and in violation of the Code and ethics in letter and spirit. 17. Ld. Pr. C.S. Mr. Deepak Khaitan, submits that Resolution Professional violated the confidentiality which would have been uphold by him not being complied, violates Sub-Section 2 (e) of Section 30. By going through the report filed by the Ld. Resolution Professional and the decision of the CoC in the meetings held on 19.01.2018, 02.02.2018 and 14.02.2018 it appears to me that the resolution applicant's whose Resolution Plan has been approved was considered .....

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..... porate Debtor during the term of the plan and have adequate means of supervision of its implementation of CP Ispat Pvt. Ltd's Plan presented before the CoC by the resolution professional under sub section (3) of section 30 of the I B Code which was approved by the CoC with 100% voting share under sub section (4) of section 30 of the I B Code. Therefore this plan deserve to be admitted under sub section (1) of section 31 of I B Code by this adjudicating authority. 22. However, before parting with, it is time to take judicial notice of fixation of exaggerated insolvency resolution cost inclusive of fixation of fees of resolution professional in a lump sum manner by the CoC with out applying its mind in regards the fate of corporate debtor, the volume, nature and complexity of CIRP. In many cases I have taken note of fixation of cost and fees with out looking into the volume, nature and complexity of the CIRP of a dying corporate debtor. The fixation of cost and fees of RP in the case in hand is an example. It read as follows:- (i) The payment of resolution process cost would be paid in priority to all other debts of corporate debtor (DJSIPL). The said amount would be ₹ .....

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..... ees of RP it appears to me that it is time to have a legitimate guidelines or regulation in this regards so as to safeguard and to ensure the prospects of revival of a dying corporate debtor not be at a highest cost which cannot be affordable by the corporate debtor. Hopefully IBBI would consider the above said factors and would frame necessary regulations or guidelines in regards fixation of fees and resolution cost by a resolution professional. 26. It is also strange to note that ARCIL a financial creditor (44.1% Vote Share ) in the CoC have opined that the Resolution Plan submitted by Pearl Dealers Private Limited (Omkara Group) which was not approved by the CoC should be kept as back up plan in case the approved plan is violated by the successful resolution applicant. No data available in the report as to whether such a decision was unanimously taken by the CoC. I am stressing this observation recorded by one of the financial creditor because the Omkara Group is an applicant in the CA 172 of 2018, who is one among the defeated applicants for the reason of late submission of revised plan. It is a circumstance behind the filing of the said CA raising serious allegation in the .....

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