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TMI Blog2018 (12) TMI 1631X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantee by the successful applicant as per the requirement of Clause 1.9. 1 would lead to rendering the Resolution Plan by such successful applicant as non-responsive as the resolution professional would be entitled to reject the Resolution Plan and cancel the LOI. It is pertinent to mention that after the approval of the Resolution Plan on 30.08.2018 by the COC, the LOI was issued on 30.08.2018 itself when by e-voting COC has approved the Resolution Plan. It is also pertinent to notice that the terms and conditions for submission of binding resolution proposal for company which makes it clear by Clause 1.11.2 that the Liberty House was under obligation to fulfil the terms of the 'Process Note'. In respect of M/S. Amtek Auto Ltd. and M/ s. Adhunik Metaliks Limited again Liberty House has presented its Resolution Plans. It is represented that the Resolution Plans in both the cases have been approved and in the aforesaid two cases also the Liberty House is dragging its feet. We are unable to accept the contention advanced on behalf of the Liberty House that litigation is pending, therefore, no notice of such a fact could have been taken by the COC in its meeting dated 19.11.2018 As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawal as it would lead to further consequences. 4.It may be highlighted that the Corporate Insolvency Resolution Process in this matter was initiated on 16.03.2018 when the petition was admitted. Thereafter, various steps were taken which led to issuance of public notice inviting the Resolution Plan. The Liberty House was declared as H-1 Bidder on 02.08.2018 and the Resolution Plan submitted by it was approved by the COC on 27.08.2018. Thereafter it was put to e-voting on 30.08.2018 and the plan was approved by overwhelming majority of 76.72% initially. However, the abstaining member of the COC also later approved the Resolution Plan and the approval was accorded by 99.98 %. In that regard, a copy of the email sent by IDBI Bank Limited has been placed on record. 5.On the basis of the decision dated 27.08.2018 taken by the COC in its 8th meeting, the Resolution Professional filed IA No. 823(PB)/2018 under Section 30 read with Section 31 of the Code with a prayer to the Adjudicating Authority-NCLT to approve the Resolution Plan submitted by the Liberty House as approved by the COC. However, the Liberty House is now dragging its feet as would emerge from the narration of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel within ten business days of the date of issuance of letter of intent the successful resolution plan applicant was to furnish performance bank guarantee of INR 60,00,00,000 in favour of the State Bank of India on behalf of the COC in the format as provided. (Annexure2) The guarantee was to be valid for initial period of 9 months from the date of signing of the Letter of Intent (LOI) and was to be renewed/ extended by successful applicant within 15 days prior to the expiry. Our attention was drawn to Clause 1.9.3 that non-submission of performance bank guarantee by successful applicant as per the provisions of Clause 1.9. 1 was to lead to rendering the Resolution Plan by such successful applicant as non-responsive. In that event resolution professional was entitled to reject the Resolution Plan and cancel the LOI. Clause 1.11.2 further emphasis that the successful Resolution Plan applicant was under obligation to fulfil all the terms of 'Process Note' and the Resolution Plan as submitted by it was accepted by COC and the Liberty House was declared as a successful Resolution Plan applicant upon the completion of the Resolution Plan process. It is in the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of signing of the LOI ("Performance Guarantee Validity Period") and shall be extended/ renewed by the Successful Applicant (not later than 15 days prior to the expiry of the Performance Guarantee Validity Period) for such period until 100 % of the applicant contribution is made by the successful applicant in accordance with the Resolution Plan. The Performance Guarantee shall have a claim period of 30 days after the Performance Guarantee Validity Period. It is hereby clarified that non-submission of the Performance Guarantee by the successful applicant and the non-acceptance of the LOI within ten business days of the date of issuance of a LOI, shall lead to cancellation ofLOI issued by the COC, unless otherwise determined by the COC at its sole discussion. Provided further that payment of the amount of the Performance Guarantee by an Associate Company shall be accompanied by a letter in the format as set out in Annexure III. (Performance Guarantee payment by an Associate Company) of this 'Process Note', which shall be acknowledged by the Successful Applicant in the format as set out therein. Provided further that where the payment of the amount of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 26.10.2018 which read as under:- "On 11.10.2018, a piquant situation has developed in this case. The Resolution Plan applicant had undertaken to furnish the Performance Bank Guarantee and the COC has insisted upon the aforesaid clause. However, learned counsel for the resolution applicant had shown the inability of the Resolution Plan applicant to honour the aforesaid commitment. The matter was adjourned for today. The COC met on 15.10.2018 and has decided to insist on approval of the Resolution Plan submitted by the Resolution Plan Applicant Liberty House Group PTE Ltd. (LHG) which has been found to be in the category of H-1 without however insisting upon furnishing of Performance Bank Guarantee. Accordingly, we direct that the application under Section 30(6) and 31 of IBC be listed for hearing on 27.11.2018. Mr. Nitya Sharma, learned counsel appearing for Central Excise Department has stated that the claim of the Central Excise Department could not be agitated before the RP. He may take appropriate steps permissible in law. List the matter on 27.11.2018. " 12.The aforesaid order must be read with order dated 11.10.2018 when the counsel for the Liberty House h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 14.Before parting we must be deal with the submission made on the basis of Clause 6.3 of the Resolution Plan submitted by the Liberty House. On the basis of Clause 6.3 it was argued that the entire understanding is depicted in the Resolution Plan submitted by the Liberty House within the meaning of Section 30 of the Code read with Regulation 38 of the CIRP Regulations, 2016 and that it supersedes/ cancels any oral and written plans proposal, arrangement, discussion, correspondence or understanding. Without going into the question whether there was any stipulation furnishing of performance bank guarantee we have put it to the Liberty House through its counsel to proceed with the Resolution Plan and we were inclined to approve the same by accepting the application IA No. 823(PB)/2018. However, learned counsel for the Liberty House lowered his eyes and was not able to state that he wish to proceed the Resolution Plan. The fallacy in the whole arguments thus stands exposed. 15.The application IA No. 823(PB)/2018 was filed before us on 04.09.2018 under Section 30 read with 31 of the Code seeking approval of the Resolution Plan. It is prayed that the period from 04.09.2018 till date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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