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TMI Blog2018 (11) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... /-. These amounts appear to be in the nature of damages and would not be covered by the definition of claim. In result thereof, the application is rejected. Approval of resolution plan - whether the resolution plan has provisions for its effective implementation? - Held that:- We have examined the compliance of the conditions provided for in Section 31 (1) of the Code above and in view of the discussion made in the preceding paragraphs and the provisions of Sections 31 (1) of the Code, we approve the resolution plan submitted by M/s Dolphin Energy Enterprises subject to discussion as above in the case of the corporate debtor and the same is directed to be binding on the corporate and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. - CA No.287/2018, CA No.100/2018 In CP (IB) No. 35/Chd/HP/2017 - - - Dated:- 27-9-2018 - Mr. R.P. Nagrath, Member (Judicial) And Mr. Pradeep R. Sethi, Member (Technical) For The applicant : Mr. Ashish Wad, Advocate For The M/s Kirloskar Brothers Ltd. : Mr. Sokriti Jaggi, Advocate (in CA No.287/2018) For The Resolution Professional : Mr. Atul V. Sood, Advocate And Mr. Sanjay Kumar D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 the RP asked the applicant for some additional documents to provide sufficient back up for enabling to take a call in the matter and that response was sent by letter dated 15.03.2018 furnishing detailed reply with available supporting documents and that in response to e-mail dated 10.01.2018 received from the RP, the statement of the ledger account of the corporate debtor duly certified by the statutory auditor was also furnished. It is stated that the RP asked for supporting contractual provisions in support of the claims by the applicant which the applicant elaborately explained vide letter dated 26.03.2018 stated to be annexed and marked as Exhibit-5. However, Exhibit 5 enclosed with the application is only a copy of e-mail dated 26.03.2018 giving reference to attachment of letter dated 26.03.2018. Copy of the letter dated 26.03.2018 has not been enclosed. 3. It is submitted that vide e-mail dated 25.05.2018, the RP has stated that the decision communicated vide email dated 06.03.2018 remains unchanged; the corporate insolvency resolution process has been completed with Committee of Creditors (COC) approving the resolution plan; the resolution plan is filed with the NCLT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is entitled to the claim. 6. During the course of the hearing, it was argued by the learned counsel for the applicant that despite furnishing of evidence, the RP had wrongly concluded that the applicant had failed to substantiate the claim with necessary documentary evidence and that nothing specific was pointed out. In response, the learned counsel for the RP argued that the applicant had failed to specify the clause in the agreement entitling it for the claim and that actually, advance from the corporate debtor of ₹1,60,29,129/- was lying with the applicant. 7. We have carefully considered the submissions and arguments of the learned counsel for the applicant and the Resolution Professional. We find that the claim has been divided into two parts by the applicant (refer column No.4 of Form B - Exhibit-1 of the application). The first part is in respect of outstanding amount of ₹6,94,22,164/-. It is an admitted fact that this outstanding amount is in respect of items which were not supplied to the corporate debtor and are in the possession of the applicant. The applicant s contention is that after the contract between the applicant and the corporate debtor was exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,000) totalling to ₹28,47,96,800/-. These amounts appear to be in the nature of damages and would not be covered by the definition of claim (supra) . In result thereof, the application is rejected. CA No.100/2018 12. The petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as Code) was filed by M/s Seashells Infrastructure Pvt Ltd. for initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s Rajpur Hydro Power Pvt. Ltd. (hereinafter referred as Corporate Debtor). The petition was admitted and moratorium in terms of section 14 (1) of the Code was declared by order dated 11.07.2017. Subsequently on 13.07.2017, Shri Gurvinder Singh Sarin, bearing IP Regn. No. IBBI/IPA-002/IP-N00072/2016-17/10170 was appointed as Interim Resolution Professional. In view of decision taken by the Committee of Creditors (COC) in its 1meeting on 10.08.2017, CA No.121 of 2017 was filed under Section 22 of the Code and Shri Sanjay Kumar Dewani bearing IP Regn. No. IBBI/IPA-001/IP-P00423/2017-18/10746 was appointed as Resolution Professional (RP) by order dated 01.09.2017. 13. The period of 180 days for completion of CIRP was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). It is stated that the two plans were discussed and deliberated upon by the COC in the meeting held on 25.01.2018 and that the members of the COC were of the view that both the resolution plans were offering very low amounts towards due payment of the financial creditor/others. It is stated that the COC considered it advisable to go for another public advertisement for inviting resolution plans under Section 25 (2) (h) of the Code. 17. It is stated that the minimum eligibility criteria was kept the same as the criteria kept in the last EOI and expression of interest dated 31.01.2018 was issued. EOIs from 8 parties are stated to be received but further, on issuing offer documents to all prospective applicants meeting the eligibility criteria, only three resolution plans were received from (i) Dolphin Energy Enterprises (proprietor- Nishita Garg); (ii) Essel Infra Projects Ltd. and (iii) Mahalaxmi Continental Ltd. It is stated that the three prospective resolution applicants were given an opportunity to present their respective plans before the COC and submit clarification on the observations of the RP. It is stated that revised/updated resolution plans were considered in the 6m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 16.07.2018, for the purpose of enabling the applicant in CA No. 196/2018 to inspect the records, the proceedings in CA No.100/2018 were adjourned to 03.08.2018 for arguments. 19. During the course of arguments, the learned counsel for the RP submitted that in compliance with the order dated 22.05.2018 (supra), the requisite certificate from RP for compliance of the provisions of the Code and the Regulations have been placed on record by diary 1998 dated 04.06.2018. It was further stated that with reference to order dated 09.07.2018, the necessary certificate in view of the latest amendment in the Code and the Regulations framed thereunder was furnished by diary No.2800 dated 01.08.2018. The learned counsel for the RP has referred to the directions of the Tribunal by order dated 22.05.2018 (supra) for issue of notice to the members of the COC. The compliance affidavit is stated to be filed by diary No.1997 dated 04.06.2018 stating that there are two members of COC namely, PTC India Financial Services Ltd. and Seashells Infrastructures Pvt. Ltd. and that the notice to PTC India Financial Services Ltd. was accepted during the course of hearing on 22.05.2018 as noted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Voted for Resolution Plan 2 Seashells Infrastructure Pvt. Ltd. 0.33% Voted for Resolution Plan 21. In para No.7 of the compliance certificate in Form H ( supra ), the amount provided for the stakeholders under the resolution plan is given as under:- Sl. No. Category of Stakeholder Amount Claimed Amount Admitted Amount Provided under the Plan Amount Provided to the Amount Claimed (%) 1. Dissenting Secured Financial Creditors NIL - - - 2. Other Secured Financial Creditors 7498.92 7498.92 941.88 12.56% 3. Dissenting Unsecured Financial Creditors NIL - - - 4. Other Unsecured Financial Creditors 27.87 24.87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that they had given their unqualified acceptance to the resolution plan after detailed consideration. As discussed above, the other financial creditor Seashells Infrastructures Pvt. Ltd. (voting share 0.33%) stated by e-mail dated 02.06.2018 that they have already approved the plan and the RP represents them. The liquidation value is not enough to cover the admitted claims of the two financial creditors and therefore, the liquidation value for the operational creditors and others is NIL. Both the financial creditors have voted for the resolution plan submitted by Dolphin Energy Enterprises. The decision of the two financial creditors is based upon their commercial wisdom and is therefore, not to be interfered with. Section 31 (1) of the Code reads as follows:- If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sired in para 9 of Form H has been given by the RP is as under:- Section of the Code /Regulation No. Requirement with respect to Resolution Plan Clause of Resolution Plan Compliance (Yes /No) 25(2)(h) Whether the Resolution Applicant meets the criteria approved by the CoC having regard to the complexity and scale of operations of business of the CD? Resolution Applicant met the criteria of minimum Net Worth fixed by CoC Yes Section 29A Whether the Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? Resolution Applicant is eligible to submit resolution plan Yes Section 30(1) Whether the Resolution Applicant has submitted an affidavit stating that it is eligible? Resolution Applicant has submitted Undertaking under section 29A of the Insolvency and Bankruptcy Code, 2016 along with resolution plan (at Page 214-215 of App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Resolution Plan submitted by Dolphin Energy Enterprises on 07.03.2018 read with clarification made vide e-mails dated 17.03.2018 and 28.03.2018 in the matter of Corporate Debtor. Yes Section 31(1) Whether the Resolution Plan has provisions for its effective implementation plan, according to the CoC? Please refer to Page 202 of Application in which Resolution Plan is annexed, under para Proposal relating to adequate means for supervising its implementation . Yes Regulation 35A Where the resolution profesional made a determination if the corporate debtor has been subjected to any transaction of the nature covered under sections 43, 45, 50 or 66, before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board? Resolution Professional filed an Application with Hon'ble NCLT on 06.04.2018 under Section 43, 44, 45, 48, 49, 66 and 73 of Code. Yes Regulation 38 (1) Whether the Resolution Plan identifies specific sources of funds that will be used to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( c ) it has provisions for its effective implementation? ( d ) it has provisions for approvals required and the timeline for the same? ( e ) the resolution applicant has the capability to implement the resolution plan? 39(2) Whether the RP has filed applications in respect of transactions observed, found or determined by him? Resolution Professional filed an Application with Hon'ble NCLT on 06.04.2018 under Section 43, 44, 45, 48, 49, 66 and 73 of Code Yes 24. We therefore, note that the RP has certified that the resolution plan conforms to the conditions provided for in Section 30(2) of the Code. The satisfaction of the requirements of 30(2) of the Code are further discussed as under:- Section 30 (2) (a):- the insolvency resolution process costs are to be paid immediately upon acceptance of the resolution plan. Section 30(2) (b):-As discussed above the liquidation value is NIL for the operational creditors. The resolution pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey agree to accept the decision of the Adjudicating Authority on the above points (refer para 12 of Form H) (supra). 27. We have already stated above that the financial creditors were called and have confirmed their acceptance of the resolution plan. We have also discussed above that Mr. Rajshekar Totakura promoter director of the corporate debtor undergoing resolution process filed an application for intervention (CA No.196/2018). It was held by order dated 16.07.2018 that the right of intervention by the applicant should not be denied in view of the scheme of the Code but the right to participate cannot be extended to the extent of a direction to the RP to supply copy of the resolution plan and since the applicant has been allowed to participate, he can inspect the record for the purpose of assisting the Tribunal. Subsequent adjournments were given on 16.07.2018 and 03.08.2018 for the purpose of enabling the intervener to inspect the record and make submissions. However, on the last date of 08.08.2018, there was no representation from the intervener. Therefore, despite opportunity given, no representation was received requiring consideration of the Adjudicating Authority while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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