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TMI Blog2019 (6) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... and Ms. Charu Bansal, Advocates for CoC. JUDGMENT SUDHANSU JYOTI MUKHOPADHAYA, J. 'Orissa Manganese & Minerals Limited'- ('Corporate Debtor') engaged in the business of mining iron ore, graphite, manganese ore, and agglomerating iron fines into pellets through its facilities in Orissa and Jharkhand and is an unlisted Public Company. The 'Corporate Insolvency Resolution Process' was initiated against the 'Corporate Debtor' on 3rd August, 2017 by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata. 2. Upon completion of 'Corporate Insolvency Resolution Process' i.e. within 270 days, the 'Resolution Professional' has succeeded in getting approval of one 'Resolution Plan' among three 'Resolution Plans' received by him. The 'Resolution Plan' submitted by 'Ghanashyam Mishra & Sons Private Limited' ('Successful Resolution Applicant') has been approved by the 'Committee of Creditors' in the 13th Meeting of the 'Committee of Creditors' convened on 25th April, 2018 by more than 89.23% voting share after due negotiation. 3. Thereafter, the 'Resolution Professional' filed an application under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 ("I& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asset Reconstruction Company Limited' and other application filed by Government of Jharkhand and approved the 'Resolution Plan' submitted by 'Ghanashyam Mishra & Sons Private Limited' which was approved by more than 89.23% voting shares by the 'Committee of Creditors'. In Company Appeal (AT) (Insol.) No. 437 of 2018 10. In this appeal, the Appellant- 'Edelweiss Asset Reconstruction Company Limited' has raised claim against non-inclusion/ rejection of its proof of claim as 'Financial Creditor' and thereby, including it as a member of the 'Committee of Creditors' of the 'Corporate Debtor'. 11. Learned counsel for the Appellant has taken plea that it having received guarantee from the 'Corporate Debtor' comes within the meaning of 'Financial Creditor' and, therefore, its claim should be accepted. 12. The case of the Appellant is that 'Adhunik Power and Natural Resources Limited' ("APNRL" for short) had availed various financial facilities from a consortium of banks and financial institutions to the tune of Rs. 1516.16 Crores. 'India Infrastructure Finance Company Limited'- ("IIFCL" for short), was approached for providing a take-out financial assistance under its Take-out Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d' having not invoked the Corporate Guarantee cannot claim to be a 'Financial Creditor'. 18. Section 5(7) defines 'Financial Creditor' whereas Section 5(8) defines 'Financial Debt', which reads as follows: "5. Definitions.─ (7) "financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to" "5 (8) "financial debt" means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its dematerialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor'? 22. On declaration of 'Moratorium', under Section 15 public announcement of the 'Corporate Insolvency Resolution Process' to be made showing the last date for submission of the claims. 23. Under Section 18(1) (b), it is the duty of the 'Resolution Professional' to receive and collate all the claims submitted by creditors, as on the date of initiation of 'Corporate Insolvency Resolution Process' (date of admission). 24. It is true that the 'Corporate Debtor' had taken guarantee but the said guarantee was not invoked in favour of the Appellant- 'Edelweiss Asset Reconstruction Limited'. However, the said guarantee was not invoked by the Appellant- 'Edelweiss Asset Reconstruction Limited' as on the date of admission or filing of the claim. 25. On declaration of 'Moratorium', it was not open to the Appellant- 'Edelweiss Asset Reconstruction Limited' to invoke the guarantee (Corporate Guarantee). 26. It is also not the case of the Appellant- 'Edelweiss Asset Reconstruction Limited' that it has not received the amount from the 'Principal Borrower' on default and, therefore, it was liable to invoke the Bank Guarantee which it invokes. In this background, the claim hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow: Payment plan of Ghanshyam Misra Payment plan of SRIE Payment plan of Edelweiss ARC Total payment to all Creditors, Workmen and employees & CIRP cost 321.19 300.00 282.00 Payment estimated for CIRP costs 3.41 3.41 3.41 Payment for workmen & employees 0.38 0.38 0.38 Payment to critical Operational Creditors 7.40 0.74 Payment to Financial Creditors 310.00 295.47 166.21 - Of which Upfront payment (within 90 days) 250.00 50.00 166.21 - Of which NPV of balance payments 40.83 250.00 - - Total of Upfront payment and NPV 290.83 300.00 166.21 - Actual payment terms of balance payments Compulsorily Redeemable Preference Shares of Rs. 60 Crores redeemable at the end of 5th year from NCLT approval date (NPV Rs. 40.83 crores at discount rate of 8% p.a.)-0.01% dividend *Banks to have a put option on RA (GMS & NPSPL) at the end of 5th year from NCLT approval *Promoters of RA to have call option on preference shares at anytime at the then NPV Continuing debt of Rs. 250 or to be paid in 20 equal quarterly instalments to be paid over 5 years - Equity stake to be provided by RA 25% equity in mining only company to the Financial Creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ('Successful Resolution Applicant') submitted that the 'Corporate Insolvency Resolution Process' commenced on 3rd August, 2017 and expired on 1st May, 2018. After expiry of 270 days of the 'Resolution Process' period, the Appellant filed its claim before the 'Resolution Professional' only on 18th June, 2018. It is informed that the Adjudicating Authority vide its order dated 22nd June, 2018 approved the 'Resolution Plan'. Further, the Appellant moved before the Adjudicating Authority which having dismissed at belated stage. 37. It was submitted that the Appellant was completely aware about the 'Corporate Insolvency Resolution Process' of the 'Corporate Debtor'. The Deputy Director of Mines vide its letter No. 38/Mines dated 1st January, 2018 issued notice for stoppage of mining operation in respect of the Patamunda Manganese Mines. Thereafter, Patamunda Mines were forced to shut on 1st January, 2018. 38. Aggrieved by the said order of Deputy Director of Mines, the 'Resolution Professional' filed an application before the Adjudicating Authority for re-opening of the mines, for the present. The Appellant actively contested in the said litigation for re-opening of the mines durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the date effective from 2nd June, 2014 to 9th March, 2015 at the CTC of Rs. 55,00,000/- per annum. 45. Post termination of duties, the Appellant obtained the full and final settlement letter from the Head Office of 1st Respondent, having its office at Kolkata, where the period of service was admitted as starting from 2nd June, 2014 and ending on 9th March, 2015. The said full and final settlement letter mentioned that the total outstanding payable by 1st Respondent to the Appellant was to the tune of Rs. 17,03,000/-. 46. The Appellant thereby claimed to be an 'Operational Creditor' and his grievance is that he filed claim before the 'Interim Resolution Professional' who has hopelessly and unlawfully denied to adhere to the rules. However, though such stand has been taken by the Appellant, it has not been made clear as to why he has not moved before the Adjudicating Authority against the rejection of the claim, if made by the 'Resolution Professional'. 47. Learned counsel appearing on behalf of the 'Ghanashyam Mishra & Sons Private Limited' ('Successful Resolution Applicant') submitted that the Appellant herein endeavors to claim 40% of the salary based on the letter da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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