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TMI Blog2018 (10) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. An application under section 10 of the Insolvency and Bankruptcy Code, 2016 ('I&B Code' for short) was filed by 'Kamineni Steel & Power India Pvt. Ltd.'- ('Corporate Applicant') before the Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, Hyderabad, which was admitted on 10th February, 2017 and the 'Corporate Insolvency Resolution Process' was initiated. 3. The 'Committee of Creditors' held different meetings and two Valuer's reports were circulated by video recording the liquidated value of the assets of the Company. The Valuer's report was that the Company was not meeting the debt due to the 'Secured Creditors' and hence 'Operational Creditors' would not have a chance to recover any of their dues. It was resolved by the 'Committee of Creditors' on 12th May, 2017 to consider SBI Capital Markets Ltd. presentation and to take view in principle about the 'Resolution Plan' proposed by the 'Corporate Debtor'. 4. Subsequently, the 4th Meeting of the 'Committee of Creditors' was held on 27th June, 2017 and it resolved that fresh infusion of funds of Rs. 150 Crores as projected is not acceptable. 5. In the 5th Meeting of the 'Committee of Creditors' held on 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected the 'Resolution Plan'. However, both 'Indian Bank' and 'JMF ARC' Limited having an aggregate voting percentage of 34.72% had expressed that they would reconsider 'Resolution Plan' if portion of the sustainable debt is increased either by way of expanding capacity utilization or by more equity infusion. The following banks in all having aggregate of 65.28% of voting power had informed that they do not have mandate to produce from their sanctioning authorities to approve the 'Resolution Plan' submitted. Sl. No. Name of Bank % of voting 1. Indian Overseas Bank 15.15 2. Andhra Bank 12.81 3. Central Bank of India 11.82 4. Oriental Bank of Commerce 10.94 5. Allahabad Bank 8.20 6. Bank of Maharashtra 6.36 Total 65.28 The 'Corporate Debtor' was asked to submit a fresh 'OTS' proposal through email to all the bankers. The 'Corporate Debtor' on 18th October, 2017 sent a mail submitting the following 'OTS' Scheme proposal suggesting Rs. 525.00 Crores towards One Time Settlement. Time was sought for to pay the amount in different instalments from 31st March, 2018 to 31st December, 2019 as follows: " Sl. No. Particulars Details 1. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors' having 55.73% voting power as follows: S. No. Name of the Bank % of Voting Power 1. Indian Bank 22.33 2. JM Financial Asset Reconstruction Co. Ltd. 12.39 3. Allahabad Bank 8.20 4. Andhra Bank 12.81 Total 55.73 11. The 'Indian Bank' and the 'Allahabad Bank' by way of mail dated 27th October, 2017 confirmed the plan subject to providing final sanction after getting sanction from appropriate authorities and the same is accepted by majority of the lenders. The 'Indian Overseas Bank' having voting power of 15.15% rejected the 'Resolution Plan' by way of revised 'OTS'. 12. The in principle approvals by the members of the 'Committee of Creditors' having voting power of 29.12% expressed that they remain 'OPEN' awaiting the in principle approval from their respective sanctioning authorities. S. No. Name of the Bank % of Voting Power 1 Oriental Bank of Commerce 10.94 2 Central Bank of India 11.82 3 Bank of Maharashtra 6.36 Total 29.12 13. On 30th October, 2017, the 'Oriental Bank of Commerce' having 10.94% voting power sent mail conveying their in principle agreeability for the 'Resolution Plan' by way of 'OTS' and that thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Miscellaneous Application No. 557 of 2017 was filed by the 'Resolution Applicant namely- 'Suyash Outsourcing Pvt. Ltd.' against 'Bank of India', 'Bank of Baroda', 'UCO Bank', 'Canbank Factors Ltd.', 'IFCI Factors', 'ICICI Bank Ltd.' - ('Financial Creditors') for certain declaration and to direct 'Resolution Professional' to allow the said Applicant to submit revised 'Resolution Plan' after reducing the time earlier envisaged for obtaining shareholders' approval from the period for making cash payments for fresh vote to place before the 'Committee of Creditors' to modify 'Resolution Plan' reducing the time earlier granted. 21. The 'Resolution Applicant' on 3rd September, 2017 submitted a term sheet along with proposed 'Resolution Plan' for Rs. 284.3crores (in present value terms) @13% discounting rate with a compulsory change in management of the company to make a cash payment of around Rs. 180 crores within a period of one year subject to all approvals and for conversion of residual debt (Rs.1191.9 crores) into 'Cumulative Convertible Optionally Redeemable Preferential Shares' ('CCORPS' for short), redemption @ 0.01% of which would be guaranteed by the promoter by way of personal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant' in 'Kamineni Steel & Power India Pvt. Ltd.' if the counting of vote is done on the basis of actual number of members, it came to 44.8% which should be accepted. 27. In Company Appeal (AT) (Insolvency) No. 15 of 2018, the Adjudicating Authority has not accepted the 'Resolution Plan' approved with 66.57% voting shares of the 'Committee of Creditors' being less than 75%. In this case, the Appellant is the promoter of 'Innoventive Industries Ltd.'- ('Corporate Debtor') has taken plea that Section 21 (8) if read with Section 34(4), including the amendment made therein, then Section 21(8) cannot be held to be mandatory. 28. Section 21 relates to 'Committee of Creditors' which normally is comprising of 'Financial Creditors' of the 'Corporate Debtor' but does not allow the related party who owes financial debt. 29. As per sub-section (8) of Section 21 (as it then was), all decisions of the 'Committee of Creditors' required to be taken by a vote of not less than seventy-five percent of the voting share of the 'Financial Creditors', which reads as follows: "21. Committee of Creditors. ─ (8) All decisions of the committee of creditors shall be taken by a vote of not less t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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