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TMI Blog2019 (9) TMI 965X X X X Extracts X X X X X X X X Extracts X X X X ..... lacs. The workmen and the employees, the Operational Creditors, as well as the existing shareholders would also be benefitted to the extent of their proportionate share in the remaining amount available for distribution. This is a case in which the CoC has judiciously distributed the financial bids to the stakeholders as per their entitlements. There is nothing in the plan, so as to disapprove it. The financial matrix has been approved by the CoC already. The Resolution Plan of PND Infrastructure Pvt. Ltd., which is approved by the CoC with 90.93% voting share, is hereby approved under provisions of sub-section(1) of Section 31 of the Insolvency and Bankruptcy Code, 2016, which shall be binding on the Corporate Debtor, KND Engineering Technologies Limited, its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan subject to the below mentioned modification - application disposed off. - CA (IB) NO. 471/KB/2019, 590, 592, 599, 600, 610 & CA (IB) NO. 649/KB/2019 in CP(IB) NO. 455/KB/2018 - - - Dated:- 12-6-2019 - SHRI JINAN K.R., MEMBER (JUDICIAL) SHRI HARISH CHANDER SURI, MEMBER (TECHNICAL) For The Employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requisite formalities, on commencement of CIRP. 4. In the first progress report filed by the IRP on 3rd October, 2018, it has been stated that in the first meeting of the Committee of Creditors, the members of the COC had taken a decision to replace the Interim Resolution Professional for which an Application was moved before the Tribunal on 5th November, 2018. This AA was informed that the existing Interim Resolution Professional has been desired to be replaced by Mr. Vishal Sharma as the Resolution Professional vide Registration No. IBBI/IPA-001/IP-P00264/2017-2018/10508, whose name was approved by the Committee of Creditors by voting share of 90.93%. This AA permitted the said appointment and directed the Resolution Professional to proceed accordingly. 5. The erstwhile Interim Resolution Professional had already filed Second Progress Report regarding non-settling his fees and this AA vide Order dated 5th November, 2018 itself directed the Committee of Creditors to settle the fees of the Interim Resolution Professional at the earliest. 6. On perusal of the Third Progress Report, the Resolution Professional was directed by this AA to id ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IBBI(Insolvency Resolution Process of Corporate Persons) Regulations, 2016, is accompanied by the copies of minutes of the meeting held by the Committee of Creditors on various occasions, copies of the advertisement dated 6th December, 2018, copies of newspaper publications on 7th January, 2019 and the copies of relevant Orders passed by this AA from time to time, the copy of Valuation Reports submitted by the Registered Valuers determining the fair liquidation value of the Corporate Debtor, copy of the Forensic Audit Report and copy of the attendance sheets, notices, minutes etc. 11. This AA would like to summarize and briefly recapitulate the facts and circumstances. The order of commencement of the CIRP in this case was passed on 30th August, 2018 and the earlier Interim Resolution Professional was replaced by the Resolution Professional vide Order dated 5th November, 2018 by this AA. The Resolution Professional complied with the orders of this AA and published the Expression of Interest in Form G, four times on various dates as per Section 25(2)(h) of the Insolvency and Bankruptcy Code, 2016 pursuant to which he received Expression of Interest from only two pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled CA (IB) No.590/KB/2019, CA (IB) No.592/KB/2019, CA (IB) No.599/KB/2019, CA (IB) No.600/KB/2019 and CA (IB) No.610/KB/2019 by opposing the approval of resolution plan. 14. CA (IB) No.590/KB/2019 has been filed by Saktipada Maity, an employee of the corporate debtor alleging that IRP has refused to accept and admit his claim submitted in Form No. D annexed with the company application claiming that ₹ 1,75,696/- due to him has not been admitted without assigning any reason. Upon said allegations, he prays for issuing direction to the IRP, Ram Ratan Modi to accept proof of claim submitted by him and to pass appropriate orders. 15. CA (IB) No.592/KB/2019 has been filed by Abhijit Das, another employee of the corporate debtor against the former IRP alleging non-inclusion of his proof of claim in Form No. D and that IRP has refused to accept when he approached directly in his office. Upon such allegations, he submits that his claim for an amount of ₹ 1,48,523/- is due from the corporate debtor and his claim has been rejected by the IRP arbitrarily, and prays for issuing directions to the IRP to consider the claim and to pass appropriate order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Fort Bank Mumbai Branch, Mumbai. 20. The Ld. Counsel, Mr. Nikunj Berlia, for and on behalf of one of the dissenting financial creditors, Todi Investor (India) Pvt. Ltd. submits that the percentage of distribution of resolution amount to the dissenting creditor is discriminatory and against the provisions of the Code and Regulation and, therefore, the plan needs to be modified by allotting the resolution amount at par with the similarly situated financial creditors. Upon hearing the submissions on the side of the unsecured financial creditor, he was requested to submit his submission if any in the form of an affidavit within 3 days from the date of hearing of the application, however, no such submissions are forthcoming. 21. Heard Ld. Pr. CA Mr. Arun Gupta, FCA, for and on behalf of RP, Ld. Sr. Counsel, Mr. Joy Saha, for and on behalf of the resolution applicants, Ld. Counsel, Miss Swapna Choubey, for the employees, the Ld. Counsel, Mr. Sanjib Dawn, for the dissenting financial creditor. We have perused the records. 22. Before we advert to examine the Resolution Plan, let us see the objections of the objectors in approving the resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. He would further submit that as per the financial matrix submitted along with the Resolution Plan, the operational creditors including the workmen and employees are to be paid 6.07% of the admitted claim within 14 days from the effective date of the resolution plan and further agreed to modify the resolution plan. 26. Against this submission, none of the Ld. Counsel appearing for the workmen raised any objection and, therefore, we directed the resolution applicant to submit an undertaking in the form of supplementary affidavit within 3 days from the date of hearing. In compliance of the submission of the Ld. Sr. Counsel, a supplementary affidavit had been filed, undertaking to pay the employees who have preferred CA No.592/KB/2019, CA No.599/KB/2019, CA No.600/KB/2019, CA No.600/KB/2019 and CA No.610/KB/2019 to pay @6.07% of the full amount admitted as proposed to the operational creditors, employees in addition to the fund allotted to the workmen and employees as per the financial matrix shown and approved by the CoC on 16th CoC meeting held on 21/5/2019. Annexure - A in supplementary affidavit is the financial matrix approved by the CoC in the 16th meeting. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 A. Public Shareholders 12,00,000 To be paid within 1 month from the effective date 12,00,000 Total payment 31,18,21,356 This matrix modified as per the undertaking filed on 7th June, 2019 is as shown below : Sl. No. Nature of the claim Amount (INR Crores) Treatment under proposed Resolution Plan Total Payment Payment(INR) Terms of payment 1 Insolvency Resolution Process Cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B2. Abhijit Das 3,70,111 22465 To be paid within 14 days from the effective date 22465 (6.07%) Full amount B3. Swaraj Mondal 3,15,658 19160 To be paid within 14 days from the effective date 19160 (6.07%) Full amount B4. Pinaki Ghosal 1,98,285 12035 To be paid within 14 days from the effective date 12035 (6.07%) Full amount 4 A. Public Shareholders 12,00,000 To be paid within 1 month from the effective date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional Creditor. The law applicable to the right of statutory authorities to claim the debt due, has been settled by the Hon'ble Appellate Tribunal CA (AT) Insolvency Appeal No. 205/2017 [Principal Director General of Income Tax (Admin and TDS)] Pr. DGIT V/s. Synergies Dooray Automotive Ltd. and others, in which it has been held that Income Tax Department of the Central Government and the Sales Tax Department of the State Government and local authority who are entitled to have dues arising out of the existing law of operation creditor within the meaning of Sec. 5(20) of the Insolvency and Bankruptcy Code. 29. Therefore, we are of the considered view that the Income Tax Authority in the case in hand cannot realise the amount in attachment subsequent to the declaration of the moratorium. It would have raised a claim before the RP. It is significant to note here that despite service of notice the authorities neither turned up so to contest this application, nor submitted its claim with the RP. That being so, the Income Tax authorities come under the purview of Sec.5(20) of the Code. Their right, if any, is limited to submission of a claim, which has not yet been do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on behalf of the Unsecured Financial Creditor in regard to distribution of funds alleging discriminatory treatment by the majority members. However, the Unsecured Financial Creditors have been allotted ₹ 5 lacs towards total amount of admitted claim. It is unclear as to whether the Resolution Professional failed in recording the objection, if any, raised on the side of the Unsecured Financial Creditors in the minutes. At the time of hearing, it was informed that such an objection was not forthcoming. Here, in this case, there are only two Financial Creditors, one is Secured Financial Creditor and another is Unsecured Financial Creditor. Both are not similarly situated. Therefore, we are unable to uphold the objection raised on the side of the Unsecured Financial Creditor that the treatment towards it, is discriminatory. The objection raised, in this regard, by the Unsecured Financial Creditor, is therefore, found devoid of any merit. 32. While adverting to and examining the Resolution Plan submitted by PND Infrastructure Pvt. Ltd., the Resolution Applicant has made following declarations in compliance with Section 30(2) of the Insolvency and Bankruptcy Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case in which we take note of a systematic way of maximizing the value of the stressed assets of the Corporate Debtor adopted by the Resolution professional with the approval of the CoC and has given a healthy competition between the two bidders for raising the final bid offer after final voting has been done on 21st may, 2019. The CoC finally approved the plan with 90.93% of its voting share. Moreover, no mala fide is alleged or proved. In the said background, we are not bound to reopen the process. 36. On a reference to the Plan, it is understood that the assets of the Corporate Debtor are going to rest in safer hands. PND Infrastructure Pvt. Ltd. is a Company, incorporated on 19th August, 2013, and is involved in infrastructural projects and real estate activities with owned/leased properties and real estate activities, with owned or leased property. All the provisions of mandatory requirements are seen complied by the resolution applicant as per Form H submitted by the RP. S.29A affidavit seen annexed with the resolution plan. It makes provision for the payment of insolvency resolution process, payment of the debts of operational creditors, management of the aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their proportionate share in the remaining amount available for distribution. 40. The liquidation value arrived at in this case is ₹ 26,54,34,919/-. The total payment agreed to be paid by the Resolution Applicant is INR 31,18,21,356/-. It has been agreed to by the Ld. Senior Counsel, appearing for the Resolution Applicant that the same would be modified by enhancing it to INR 31,18,90,031. Though marginally, considering the total bid amount agreed to be paid by the Resolution Applicant and considering the percentage of funds availed by the Secured Creditor of the Corporate Debtor and considering the difference between the liquidation value and the amount of the Resolution Plan, that in case of liquidation, there is nothing left for distribution to the Operational Creditors, it appears to us that there is nothing discriminatory in the distribution of funds available with the Committee of Creditors which has been offered by the Resolution Applicant. 41. This is a case in which the CoC has judiciously distributed the financial bids to the stakeholders as per their entitlements. There is nothing in the plan, so as to disapprove it. The financial ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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