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TMI Blog2019 (1) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of law; iii. Direct RP to conduct open competitive bidding in the interest of transparency and maximization of value of assets for the benefit of all financial and other creditors; iv. Pending consideration and disposal of the above application, direct RP and CoC not to act in furtherance of the decision taken at the CoC meeting on 12.09.2018; and v. Consideration passing such further and/or other order(s) and/or directions(s) as the facts and circumstances of the matter may warrant. 2. The factual matrix of the case are that, in response to the advertisement published in The Economic Times and Business Standard on 04.06.2018 inviting expression of Interest (EoI) to submit resolution plans for the Corporate Debtor viz. M/s. Merchem Ltd, the Applicant submitted its EoI vide its email dated 13.06.2018 and the Resolution Professional, vide his email dated 21.06.2018, considered the Applicant eligible to submit the resolution plan. 3. It is submitted that the Applicant has submitted its resolution plan along with the declaration u/s. 29A of IBC, 2016 vide its E-mail dated 10.08.2018 to the Resolution Professional along with a bank guarantee of Rs. 500 lakhs issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity to hear the applicant is quite unjust and arbitrary. The Applicant has made reference to the decision of NCLAT Rajputana Properties (P.) Ltd. v. Ultratech Cement Ltd. [IA No. 594 of 2018, dated 15-5-2018] wherein it was held that if Section 24 is read with Section 30, it is clear that the following persons are to take part in the meeting of Committee of Creditors at the time of approval of one or other resolution plan: (a) members of CoC (b) members of the (suspend) Board of Directors or the Partners of the Corporate persons (c) Operational Creditors or their representatives if the amount of their aggregate dues is not less than ten percent of the debt [clause (a), (b), (c) of Section 24 (3)]; and (d) Resolution Applicant(s) when resolution plan of such applicant(s) are placed for consideration [Section 30(5)] 7. The Resolution Applicant has submitted that the conduct of the corporate insolvency resolution process by the RP does not appear to be above board. The possibility of accommodating the successful resolution applicant in June 2018 itself cannot be ruled out as the RP, in a span of about seven hours, decided to reduce the eligibility threshold for all resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution applicant from effective representation as he is kept in the dark in regard to the entire process relating to consideration and approval of the resolution plan. 10. The applicants submitted that the entire procedure adopted in ranking the resolution applicants is vitiated and is in violation of the provisions of the Code as well as the regulation and as against the scheme of the Code. The Applicant further submitted that the non-consideration of uniform for giving reduction of the debt due to various creditors including unsecured and operational creditors in the plan submitted for approval is amounting to discrimination. Similarly, different amounts allowed to be paid by different resolution applicants to same class of creditors are also discriminative and mischievous. Such unhealthy and sharp practices ought to be discouraged by the Hon'ble Tribunal in public interest. 11. The applicant has submitted that the proposal of the applicant is superior to the proposal of Acme Chem Limited. The RP has grossly overlooked the fact that applicant has offered current assets amounting to Rs. 1476.61 lakhs to secured lenders vide sub para 1 of the para No. III of Part D of Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that many of items mentioned under the said resolution are legally not tenable as they are beyond the scope and power of the Adjudicating Authority as well as the Code. A careful perusal of the concessions and reliefs sought shall reveal that the resolution applicant requires the Adjudicating Authority to go beyond the ambit of law and approve certain items which are otherwise legally not permissible. 15. The Applicant has submitted that as per the Regulation 39(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, resolution professional has to submit to the committee all the resolutions plans which comply with the requirements of the Code and regulations made thereunder. It is not evident from the minutes of the CoC meeting dated 12.09.2018, the RP complied with the requirement of the Regulation 39(2). 16. The Resolution Professional has filed a counter stating therein that the resolution plan submitted by the successful resolution applicant did not contravene the provisions of law and after following the due procedure set out under the Insolvency and Bankruptcy Code read with IBBI (Insolvency Resolution Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.09.2018; (b) the Applicant having chosen not to be present either himself or through its authorised representative; (c) the presence or absence of the Applicant would not have changed its position in as much as the entire documentation was available before the CoC and it was for the CoC to decide on the basis of evaluation matrix and the other parameters as to who is the successful Applicant. Accordingly, the CoC in its 7th meeting after going through the evaluation matrix had considered both the resolution plans and unanimously decided to approve the resolution plan submitted by Acme. 21. The Resolution Professional has submitted that there cannot be any qualms about the legal position set out by the NCLAT in "Rajputana Industries". The ratio in Rajputana industries deals about a case where a person was not allowed to participate in the CoC meeting for some reason and therefore it was contended that there was a violation of Section 24 of the Code. However, in the instant case the Applicant chose not to remain present and did not even bother to send its representative for the CoC meeting. The Applicant being a company cannot say that the promoter alone can attend the meeting an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged by the Applicant. The Applicant has chosen to prefer the payment of Rs. 5.59 crores and the successful resolution applicant had decided to follow Section 53 of the IBC and gave an option to CoC in this regard. The successful resolution applicant had proposed payment of Rs. 115 crores which is inclusive of provision for a) Resolution Professional Cost; b) liquidation value to the dissenting secured financial creditors. 26. The Resolution Professional has submitted that the resolution plans submitted by both the parties viz the Applicant herein and the successful resolution applicant were considered in proper perspective as per the criteria fixed by the CoC and the evaluation matrix. Based on the detailed discussion regarding scoring as per the approved evaluation matrix, CoC unanimously came to a conclusion that Acme Chem is the H1 and their resolution plan could be considered as accepted and RP stated that relevant resolutions would be passed in the presence of Sri. Thomas, the promoter Director. 27. The Resolution Professional has submitted that there is no basis for the Applicant herein to arrive at the revised consideration at Rs. 133 crores for the following reasons: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproved by 100% voting share by the financial creditors and satisfy the requirement of Section 30(4) of the Code. 32. It is further submitted by the counsel for the CoC that Applicant themselves have prepared a table which is reflected in their Resolution Plan (Page No. 67 of their Resolution Plan and Page 319 of the Paper Book) with the title "present value of inflow towards Resolution Debt Amount. This table reflects and is self explanatory that the total inflow towards Resolution Debt in absolute terms at Rs. 100 Crores and the Net Present Value at Rs. 87.21 Crores. 33. Counsel for the CoC has contended that plan submitted by the applicant only scored 52/54 marks as against the 73 marks scored by the successful resolution Applicant. The total consideration of Acme Chem limited as per the resolution plan is Rs. 115.252 Crores, which is payable upfront on the other hand the total consideration of Nitrex is 80.89 Crores, in the event of upfront payment and 109.56 Crores with a repayment schedule of 60 months. Hence, CoC has acted in accordance with the code to maximize the value of assets by rejecting the plan of the Applicant. 34. The Applicant also filed a rejoinder wherein he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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