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TMI Blog2018 (9) TMI 1895X X X X Extracts X X X X X X X X Extracts X X X X ..... RP will continue to be the supervisor as per Regulation 38(2)(c) of the Regulations and will continue to submit monthly reports to the stakeholders for providing the status on the implementation of the resolution plan - We are therefore, of the view that the resolution plan has provisions for its effective implementation. The resolution plan as approved by the COC in its 8th meeting held on 23.03.2018 is approved (subject to comments as above) under the provisions of Section 31(1) of the Code and the resolution plan shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan - moratorium shall cease to have effect - the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. Application disposed off. - CA NO. 84 OF 2018, CP(IB) NO. 07/CHD/HRY/2017 - - - Dated:- 14-9-2018 - R.P. NAGRATH, JUDICIAL MEMBER AND PRADEEP R. SETHI, TECHNICAL MEMBER For the Appearing Parties : G.S. Sarin, PCS, Savar Mahajan, Adv. and Krishan Vrind Jain, C.A ORDER P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liquidation value of the corporate debtor is ₹ 14.83 crores. 4. It is stated that consequent to change of resolution professional and confirmation of Shri Anil Goel as RP by order dated 31.05.2017, Shri Anil Goel called for the third meeting of the COC on 11.07.2017 and in the said meeting, the RP submitted the information memorandum as prepared under Section 29 of the Code read with Regulation 36 (2) of the Regulations and vide email dated 13.07.2017, the RP invited the corporate debtor and financial creditors to submit the resolution plan. It is stated that on 29.08.2017, Shri Suman Jolly, promoter director of the corporate debtor (Promoter Director) submitted a resolution plan under Section 30 of the Code to the RP. It is stated that the resolution plan was examined in the 4th and 5th meetings of the COC and while the plan was pending final approval with the SBI, the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 was promulgated on 23.11.2017 adding Section 29A to the Code prescribing certain disqualifications for persons not eligible to submit the resolution plan and thus, the promoter director became ineligible to submit a resolution plan in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement entered between them and the promoter. It is stated that the promoter director submitted a letter to the RP, stating that while he may continue his proceedings before the Hon'ble High Court of Punjab and Haryana on his challenge to the vires of the Ordinance supra, given the time it may take to pass the final order, and given the urgent need to revive the corporate debtor, he shall not be challenging the approval of the resolution plan of the Trust and since his primary concern is ensuring continuity of the corporate debtor and branch RMS (rather than liquidation of the corporate debtor) he has no objection to the approval of the resolution plan of the Trust. 7. It is prayed that since the resolution plan was approved by vote of more than 75% of voting share of the financial creditors, the resolution plan as submitted by RMS Employees Welfare Trust and as duly approved by the COC in its meeting dated 23.03.2018 in terms of Section 31(1) of the Code may be approved. 8. When the matter was listed on 25.04.2018, the learned counsel for the promoter director stated that CWP No.27730 of 2017 filed by Suman Jolly suspended Managing Director of the Board of Directors i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Act, 1882. The copy of the Trust Deed has been submitted at Annexure-2 of diary No.2081 dated 08.06.2018. 13. Section 30(4) of the Code states that the COC may approve a resolution plan by a vote of not less than 75% (substituted by 66% by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 with effect from 06.06.2018) of the voting share of the financial creditors after considering its feasibility and viability, and such other requirements as may be specified by the Board. We have already discussed above that the resolution plan is stated to be approved by the COC in its 8th meeting held on 23.03.2018 with the assent of 96.73% of voting share of the financial creditors. The RP has submitted affidavit dated 28.03.2018 stating that the resolution plan does not contravene any of the provisions of law for the time being in force and the contents of the resolution plan meet all the requirements of the Code and the Regulations (Annexure-O of the petition). 14. The approval of the resolution plan sought for is to be given by the Adjudicating Authority under Section 31(1) of the Code reading as follows:- Section 31 (1) of the Code reads as follows:- If the Adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under Project Details at Pg No. 354 Yes Section 29A Whether the Resolution Applicant is eligible to submit resolution plan as per final list of Resolution Professional or Order, if any, of the Adjudicating Authority? Undertaking given by resolution applicant at pg. No 285 of application. Yes Section 30(1) Whether the Resolution Applicant has submitted an affidavit stating that it is eligible? Not Applicable (Amended vide Regulations dated 03.07.2018) The Resolution Applicant had provided an Undertaking at pg. No 285 of application. Yes Section 30(2) Whether the Resolution Plan: ( a ) provides for the payment of insolvency resolution process costs? ( b ) provides for the payment of the debts of operational creditors? ( c ) provides for the management of the affairs of the Corporate debtor? ( d ) provides for the implementation and supervision of the resolution plan? ( e ) contravenes any of the provisions of the law for the time being in force? C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective implementation? ( d ) it has provisions for approvals required and the timeline for the same? ( e ) the resolution applicant has the capability to implement the resolution plan? Reasons of losses at Pg no 307 of application Justification and Projected profitability statement at Pg No- 349 361 Not Applicable Not Applicable At Pg No-281 (detail of resolution applicant) Yes 39(2) Whether the RP has filed applications in respect of transactions observed, found or determined by him? No. Resolution professional has given certificate at PgNo-276-280 Yes 17. We may first examine the amounts provided for the stakeholders under the resolution plan. The details given in para 7 of Form H are as under:- Sl. No. Category of Stakeholder* Amount Claimed Amount Admitted Amount Provided under the Plan# Amount Provided to the Amount Claimed (%) 1 Dissenting Secured F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the personal property of the promoter and has been settled in full by the promoter. It is further submitted that the other secured financial creditors include SBI with admitted claim of ₹ 97.35 crores (refer to Annexure-I of Form H) and over and above the proposed amount of ₹ 10.00 crores under the resolution plan, SBI has been paid an amount of ₹ 35.00 crores by the promoters from their personal assets, in discharge of their personal guarantees. Taking into consideration the extent of payments to the financial creditors and the liquidation value, it was considered necessary to hear the views of the members of COC namely SBI, HDFC Ltd. and ICICI Bank Ltd. Order in this regard was made on 04.05.2018. The three members of the COC were present through their representatives on 16.05.2018 and all the financial creditors representatives stated that they have nothing to say other than what was recorded in the meeting of COC. Further, the representative of HDFC Ltd. stated that they abstained from voting because no amount was being offered to HDFC Ltd. The Assistant Manager of HDFC Ltd. recorded his statement on 11.06.2018 that the dues of HDFC Ltd. have been cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her it is proposed to set up a joint assets committee comprising representatives of secured financial creditors and Trust for sale of non-core assets (reference in this regard be also to the resolution plan-page 344 of the application). Section 30(2) (e):- In para 4 of Form H, the RP has certified that the resolution plan does not contravene any of the provisions of the law for the time being in force. Similar certificate is also given in the affidavit dated 28.03.2018 of the RP (Annexure-O of the petition). Section 30(2)(f):- The RP has furnished a certificate dated 28.03.2018 (Annexure-O of the application) stating that the resolution plan submitted by the Trust complies with the requirements of the Code and the Regulations, including the amendments made to the Regulations on 07.11.2017. It is further certified that the Trust (including its trustees) are eligible to submit the resolution plan and are not disqualified under any of the categories mentioned in Section 29A of the Code. It is stated in the certificate dated 28.03.2018 (supra) that requirement of Section 30(1)(b) of the Code read with Regulation 38(1)(b) of CIRP Regulations has been complied with, as except of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that it was decided that Mr. Anil Goel, RP will continue to be the supervisor as per Regulation 38(2)(c) of the Regulations and will continue to submit monthly reports to the stakeholders for providing the status on the implementation of the resolution plan. We are therefore, of the view that the resolution plan has provisions for its effective implementation. 21. We find that in para C.4 of the minutes of the meeting of COC held on 23.03.2018 (Annexure Q of the petition), it is inter alia stated that no payment under the resolution plan is envisaged for Government dues. The matter relating to the waiver of Government dues, including waiver of MAT liability under Section 115J of the Income Tax Act 1961, may be considered by the respective Government Department. 22. Para No.C.3 of the minutes of the meeting of COC held on 23.03.2018 (Annexure -Q of the petition) inter alia states that the promoters of the corporate debtor and the SBI informed the RP that for release of their personal guarantee, promoter intends to pay certain dues through a compromise with the members of the creditors and agreement between the promoters and the bank in this regard has been executed and the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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