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TMI Blog2018 (12) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... of India under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as a "Code") in view of the default committed by the Corporate Debtor relating to the facilities granted by the Financial Creditor. For this purpose, vide order dated 12.10.2018 the Resolution Professional (RP) appointed at the time of admission to carry forward the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was ordered to file the synopsis of dates and compliances mandated under the code as well as attendant Regulations from the date of admission of the CIRP process and subject to the same the orders were reserved. 2. Pursuant to the said order, vide Diary No. 522/2018 dated 18.10.2018 a synopsis has been duly filed by the RP along with compilation of dates and events in relation to the CIRP process of the Corporate Debtor. Perusal of the said synopsis along with the status reports as has been filed by the RP from time to time discloses the following: - 3. On 15.11.2017 the petition as filed by the Union Bank of India was admitted and the CIRP process was initiated against the Corporate Debtor by the said order. The Interim Resolution Professional as propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial Creditors had participated in the said meeting and the minutes of the First CoC meeting filed with RP discloses that the voting percentage of these two Financial Creditors aggregates to 98 per cent of the total claim made by the Financial Creditors. In addition to the above, two other Financial Creditors, are also disclosed in the minutes of the First CoC meeting held on 19th December, 2017 one being an individual Financial Creditor by the name of Mr. Sushil Kumar Patodia who had also participated in the First CoC meeting holding with 0.2 per cent voting share in the said meeting. The IRP was requested by CoC in its first meeting to formulate a plan of action by the participants in the said meeting for revival of the Company and place the same before the CoC. 6. However, upon a discussion on Interim Finance, it was deferred in the said meeting as disclosed in the report filed vide Diary No. 2713/2018 dated 09.05.2018 with this Tribunal by the RP of the Second Meeting of Committee of Creditors (CoC) which was held on 30th January, 2018 and the minutes in relation to the same has also been enclosed, where from it is seen that other than three Financial Creditors already ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely Union Bank of India and Infosoft Global Pvt. Ltd. have been in attendance along with the representative of the Secured Creditor-Operational Creditor having more than 10 per cent of voting strength in relation to the total claims namely Gangpur has also attended the Third CoC meeting. In relation to interim Finance, it is seen that no decision was taken by the CoC as seems to have been the case in the earlier meetings as well. 9. Further, another CoC meeting being the Fourth CoC meeting had also been held on 10th April, 2018 as evidenced from the Minutes annexed with Diary No. 2713/2018 dated 09.05.2018, which was attended by Union Bank of India having 91.40 per cent voting share in the CoC and in this meeting, seems to have been attended by the Secured (Operational Creditor). 10. Further, in the said Fourth CoC meeting a Budgeted Resolution Cost of Rs. 21,50,000/- seems to have been also approved and funding in relation to the same it is stated shall be made by Union Bank of India in a separate escrow account maintained for the said purpose. 11. In relation to the Information Memorandum, it is seen that the RP had reported before the CoC that some time may be required for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sub-Regulation 5 of Regulations 36(A) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016, two Resolution Applicants who had shown interest in participating in the CIRP of the Corporate Debtor had subsequently backed out and had not submitted any resolution plan and that in the circumstances as timelines were first approaching, decision was also taken that in the light of the recent amendments made to the Insolvency Resolution Process for Corporate Persons Regulations 2016, w.e.f 04.04.2018 could not be given effect too. 15. Consequent to the above decision of the CoC, it is also evident from the minutes of the Sixth CoC meeting held on 16.07.2018 that representation has also been made by the Directors constituting the Board of the Corporate Debtor that the unit being an "MSME" and in the circumstances they are qualified to submit a Resolution Plan by virtue of amendments made to Section 29A of IBC, 2016 and based on the above representation it is recorded in the minutes of Sixth CoC that keeping in mind the spirit/ provisions of IBC, 2016, the CoC consented for the submission of Resolution Plan by the Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Sushil Kumar Patodia HUF 1.2% Resolution Plan Accepted 7. Positive Management Pvt. Ltd. 1.8% Resolution Plan Accepted Total 100% Result of Voting: Votes cast for approval of Resolution Plan: 4.7% Votes cast against approval of Resolution Plan: 95.3% 100.0% Therefore, on the basis of the above voting results, the Resolution Plan submitted by the Corporate Debtor was rejected with 95.3% voting share. In the above view of the matter, the Committee of Creditors recommend that under the provisions of the Insolvency and Bankruptcy Code, 2016, the Hon'ble NCLT be approached for issue of necessary orders for liquidation of the Corporate Debtor, Ashoka Mills Limited. It is pertinent to note that the said meeting of Committee of Creditors, being the eighth Meeting held on 8th August, 2018, was attended by the representative of the Financial Creditor having 100 per cent voting share. In addition to the Board of Directors of the Corporate Debtor whose powers stood suspended by virtue of admission of the CIRP of the Corporate Debtor on 16.07.2018 were also in attendance in the said meeting. 18. Consequent to the above Resolution passed whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 9582 of 2018 wherein it has been held that in the interest of the Corporate Debtor and other stakeholders, every opportunity should be given for the Resolution of the Corporate Insolvency of a Corporate Debtor and that the liquidation should be a last resort. 21. In the present instance, we find that the sole resolution plan filed by the Board of Directors of the Corporate Debtor, namely, Mr. Mayank Patodia, Mr. Pawan Kumar Patodia & Mr. Prateek Patodia respectively had been considered and rejected by the COC in the meeting held on 08.08.2018 based on the resolution which has been fully extracted as above in paragraph supra. 22. It is also evident that two persons who had initially shown interest by answering to the invitation of resolution plans, however, had subsequently withdrawn from submitting the resolution plans which would have enabled the COC to consider the same and come to a conclusion. 23. As against the claim made by the Creditors including the Financial Creditors, Operational Creditors whether secured or not aggregating to a sum of Rs. 86,16,30,246 the fair value as well as the liquidation value as made available to this Tribunal based on its direction by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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