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TMI Blog2019 (7) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... the distribution as made between the Financial Creditor and the Operational Creditor i.e. 27.83% in favour of the Financial Creditor and Nil amount in favour of the Operational Creditor , is also arbitrary and discriminatory. As per the decision of this Appellate Tribunal in Binani Industries Limited Vs. Bank of Baroda Anr (Supra) [ 2018 (11) TMI 803 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] and the Hon ble Supreme Court in Swiss Ribbon Pvt. Ltd. Anr. v. Union of India Ors. (Supra), the Operational Creditors are to be given roughly the same treatment as the Financial Creditors . Such treatment having not been made instead of rejecting the plan, we modify the plan as proposed by Resolution Applicant which also pass the test of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject of the I B Code . 4. Further, according to learned counsel for the Appellant, the plan approved is in violation of Section 30(2) (b) of the I B Code . 5. The case was earlier taken up on 18th March, 2019, when following observations made by this Appellate Tribunal: 18.03.2019 We have discussed matter with Appellant ( Sole Operational Creditor ), counsel for the Appellant, learned counsel for the Resolution Professional and representative of Financial Creditors (there are three Financial Creditors) about the distribution as shown in the Resolution Plan . Prima Facie, we are of the view that the plan approved by the Committee of Creditors appears to be discriminatory in a sense that it has allowed 27.83% in favour of the three Financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution Applicant and thereby requested this Appellate Tribunal to pass appropriate order. 8. The distribution of amount amongst the Financial Creditors and the Operational Creditor as shown in the Resolution Plan of 3rd Respondent- ( M/s. Kundan Care Products Ltd. ) is as under: Sr. No. Category of stakeholder Name Amount claimed (In Cr.) Amount admitted by Resolution Professional (In Cr.) Amount provided under the Resolution Plan (In Cr.) Percentage of amount allowed in the Resolution Plan (In Cr.) 1 Financial Creditor Punjab National Bank 98.76 98.76 27.48 27.83 2 Financial Creditor Orient Bank of Commerce 59.51 59.51 16.56 27.83 3 Financial Creditor Kotak Mahindra Bank 1.37 1.37 0.38 27.83 4 Operational Creditor Mecamidi HPP India Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a defining factor where there is no specific debt contract with the debtor, such as in the case of damage claimants (e.g for environmental damage) and tax authorities. Even though the principle of equitable treatment may be modified by social policy on priorities and give way to the prerogatives pertaining to holders of claims or interests that arise, for example, by operation of law, it retains its significance by 12 UNCITRAL Legislative Guide on Insolvency Law ensuring that the priority accorded to the claims of a similar class affects all members of the class in the same manner. The policy of equitable treatment permeates many aspects of an insolvency law, including the application of the stay or suspension, provisions to set aside acts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall in any event be made before the expiry of thirty days after the approval of a resolution plan by the Adjudicating Authority; and (c) liquidation value due to dissenting financial creditors and provide that such payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan. Post amendment, Regulation 38 reads as follows: 38 . Mandatory contents of the resolution plan.- (1) The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. (1-A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Creditors are to be given roughly the same treatment as the Financial Creditors . Such treatment having not been made instead of rejecting the plan, we modify the plan as proposed by Resolution Applicant which also pass the test of Section 30 (2) (b). 15. For the reasons aforesaid, while we allow the Resolution Applicant to modify and substitute the Resolution Plan and the re-distribution be made in a manner as proposed by 3rd Respondent ( Resolution Applicant ), as follows: As per Original plan As per Revised Plan Name of Creditor Claim Amount Amount Provided Ratio Amount Provided Ratio PNB 98.76 27.48 27.83% 26.70 27.04% OBC 59.51 16.56 27.83% 16.08 27.02% Kotak 1.37 0.38 27.83% 0.37 27.01% Operational Creditor (Mecamidi) 4.71 1.27 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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