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TMI Blog2019 (9) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Committee of Creditors to defer the process of issuance of Information Memorandum , if the Promoter of MSME offers a viable and feasible plan maximising the assets of the Corporate Debtor and balancing all the stakeholders. Appeal dismissed. - Company Appeal (AT) (Insolvency) No. 203 of 2019 - - - Dated:- 4-7-2019 - Mr S. J. Mukhopadhaya, Chairperson And Mr A. I. S. Cheema, Member (Judicial) For The Appellants : Mr. Sudhir Makkar, Senior Advocate with Mr. Jatin Mongia, Mr. Yashvardhan Bandi, Ms. Riya, Mr. Abhishek Chaudhary, Ms. Sumya Gupta and Mr. N. Srikanth, Advocates For The Respondents : Mr. Basava Prabhu. S Patil, Senior Advocate with Mr. T.N. Purga Prasad, Mr. Soumik Ghosal, Mr. Geet Ahuja and Mr. Gaurav Singh, Advocates for Respondent, Mr. Rana Mukherjee, Senior Advocate with Mr. K.V. Balakrishnan and Mr. R.K. Sharma, Advocates, Mr. P. V. Dinesh, Ms. Sindhu T.P And Mr. R.S. Lakashman JUDGMENT SUDHANSU JYOTI MUKHOPADHAYA, J. Pursuant to an application filed by M/s. Aries under Section 9 of the Insolvency and Bankruptcy Code, 2016 ( I B Code f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y details to be published in newspapers had been prepared and the same had already been circulated to all the members of the Committee of Creditors . The Committee of Creditors members have expressed that the publication of Expression of Interest may be deferred for the time being as there is an active consideration of Resolution Plan with the Corporate Debtor itself. 7. In the 4th Committee of Creditors meeting which was held on 30th November, 2018, the reasons for deferring the issue of Expression of Interest was discussed by the Committee of Creditors members with reasoning and the issue pertaining to extension application before the Adjudicating Authority was discussed. 8. In the 5th Committee of Creditors meeting held on 20th December, 2018, the Resolution Professional was asked by the Committee of Creditors members regarding the eligibility of the Resolution Applicant (promoter of the Corporate Debtor ). The Resolution Professional confirmed the eligibility of the Resolution Applicant being an MSME and eligible under 29 A of the I B Code . The Resolution Applicant (3rd Respondent) presented his plan to the Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al shall invite prospective Resolution Applicants , who fulfil such criteria as may be laid down by him with the approval of Committee of Creditors , having regard to the complexity and scale of the operations of the business of the Corporate Debtor . 14. The 3rd Respondent has been in the pharmaceutical business for close to 40 years, the Resolution Plan having filed by 3rd Respondent being viable and feasible and fulfils all other financial matrix has been accepted. 15. With regard to Appellant- Saravana Global Holdings Ltd. , it is stated that Mr. Padam J Challani is also a Director, had a NPA account with the answering Respondent, State Bank of India, for a debt amounting to INR 48.33 Crores. This account was declared NPA on 29th March, 2012. Even restructuring attempts had failed as the borrower could not repay any amount. Finally, the bank was constrained to settle the account by taking a painful haircut of close to 50% in March, 2018. The sacrifice made by the bank in this settlement was INR 23.14 crores. It may be noted that the Appellants, belonging to the same group companies, is making tall claims of proposing a plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olders/investors are able to maximize their investment. Timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets. Since more investment can be made with funds that have come back into the economy, business then eases up, which leads, overall, to higher economic growth and development of the Indian economy. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern. [See ArcelorMittal (supra) at paragraph 83, footnote 3]. 18. Therefore, it is clear that I B Code envisages maximization of value of the assets of the Corporate Debtor so that they are efficiently run as going concerns and in turn, will promote entrepreneurship. The preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no Resolution Plan or the Resolution Plan s sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of the total claim of ₹ 49.23 Crores, the payment proposed is ₹ 34.46 Crores. It further provides that 70% of the admitted claims of all the Financial Creditors shall be paid within three months from the 'Approval Date' as full and final settlement of the dues and personal guarantees. In relation to the Workmen dues, it provides for total payment of ₹ 0.24 Crores, as far as the Employees' dues are concerned, the Plan provides for total payment of ₹ 0.32 Crores. The Plan also provides for payment of Insolvency Resolution Process Costs, the dues for PP and ESI. A provision has also been made for payments of ₹ 6.53 Crores to other Operational Creditors and ₹ 0.13 Crores towards statutory liabilities. In essence, the Plan provides to settle the claim of various stakeholders. 8. The Plan provides that to balance the interest of all stakeholders, a capital reduction is proposed and the capital of all the fully paid up equity shareholders as on 30.06.2018 shall be reduced to 10% and consequently, the existing 2.36 Crores number of shares shall be reduced to 0.236 number of shares. 9. The Resolution Plan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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