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TMI Blog2019 (10) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ll pursuant to the Resolution Plan approved under Sub-section (1) of Section 31 of the I B Code, 2016, obtain all the necessary approval as may be required under any law for the time being in force within a period of one year from the date of approval of the Resolution Plan by this authority or within such period as provided for in such law - The order of moratorium dated 13.11.2018 passed by this Adjudicating Authority under Section 14 of I B Code, 2016 shall ceased to have effect from the date of passing of this Order. The approved Resolution Plan shall become effective from the date of passing of this Order. - MA/484/2019 in CP/762/IB/2019 - - - Dated:- 19-7-2019 - CH. MOHD. SHARIEF TARIQ, MEMBER (JUDICIAL) For The Resolution Professional : K. Moorthy Counsel For The Professional : Mr A. Arumugam Fir The Arujn Chemicals Pvt. Ltd. Rohan Rajasekaran, Counsel For The Financial Creditor : Mr. V.V. Sivakumar And M/s Dua Associates For The IT Department : Mr. P. Rajkumar Jhabakh Counsel For The Tangedco : S.R. Shanmugadass, Counsels For The Commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper care of the Applicant. Based on this, the objector wants liberty to execute decree against the Corporate Debtor passed in O.S. No. 81/2013 by the Learned District Judge, Dindugal, even if, the Resolution Plan is approved. (iii) While controverting the objections of the operational creditor the counsels for the Resolution Applicant and the suspended directors have submitted that the contention of the objector/operational creditor to be entitled to the entire dues without adopting the hair cut method is unsustainable in law, because as per liquidation value, on allocation of the funds, the operational creditor will get 7.8% as against 13% which is being purposed in the Resolution Plan. Therefore, there is no question of giving differential treatment to the objector/operational creditor. Thus, the reply given by the counsels for the resolution applicant and suspended directors is plausible. The reference made by the objector to the order of the Hon ble NCLAT passed in Prasad Gempex case (supra) is misplaced as in that case no care was taken about the claim of the operational creditor. However, in the present case the claim of the operational creditor is taken c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Professional to the tune of ₹ 22,23,686/- on 01.02.2019 and the same was considered while passing the Resolution Plan by adopting the same hair-cut method like other operational/financial and statutory creditors. Now, the contention of the objector/operational creditor to modify the Resolution Plan insofar as it provides for a hair-cut of 87% on the taxes and interest that are due to the Government under the TNVAT Act 2006 and provide for repayment of the entire amount of ₹ 30,47,372/- (Tax of ₹ 8,23,686/- and interest of ₹ 22,23,686/-), is unsustainable in law and contrary to the provisions of Section 53 of the IBC, as no stakeholder including the statutory authorities can reserve any right to collect any dues payable to them from the Resolution Applicant apart from the funds earmarked in the Resolution Plan. Further, it has been placed on record that the Resolution Professional has rejected a claim of ₹ 11,09,95,646/- which was made on 19.06.2019 on the ground of its being filed belatedly and after approval of the Resolution Plan by the CoC. The Resolution Applicant has submitted that a claim of tax amounting to ₹ 11,09,95,646/- is fictitious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection will be made only after payment. Based on this, the objector/TANGEDCO has contended that this fact was not placed before the IRP, which created misperception and accordingly prayed to revise the Resolution Plan. (iv) From the above, it can safely be concluded that the objector/TANGEDCO has taken a contradictory stand, as after approval of the Resolution Plan, the Resolution Professional has been informed vide letter dated 06.06.2019 about the adjustment of the deposits. Had it been so, the superintending engineer at the time of filing the 1st claim i.e., on 01.02.2019, could have brought the fact of adjustment of the deposit to the knowledge of the Resolution Professional. The contention with regard to the adjustment of the deposit and filing of 2nd claim after approval of the Resolution Plan is afterthought, which cannot be a base for re-opening the Resolution Plan. Therefore, the contention of the objector/TANGEDCO is flawed and stands rejected. The TANGEDCO is directed to connect the power supply [H.T.SC.No.311] immediately to the Corporate Debtor and also at its pump house situated at SF No.50/2,901 of Manoor village, Palani Taluk, Dindigul District, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of it, the stand taken by the Resolution Applicant is correct. Therefore, the plea taken by the counsel for the ESI is devoid of merits and stands rejected. V. The objections filed by the Income Tax Officer, Coimbatore: (i) The Income Tax Officer, Coimbatore has filed objections on 18.06.2019 stating therein that the Corporate Debtor viz., M/s. Sri Srivathsa Paper Mills Pvt. Ltd. has filed the Return of Income (RoI) only for Assessment Years 2010-11 and 2011-12, and thereafter, has not filed any RoI till date. The RoI for AY s 2010-11 and 2011-12 showed losses of ₹ 5,16,20,298/- and ₹ 9,44,95,480/- respectively, thereby totalling ₹ 14,61,15,778/-. It is further, stated that Section 80 clearly bars the benefit of carry forward of losses when return is not filed under Section 139 of the Income Tax Act, 1961. In support of his contention reliance is placed on the judgment of Hon ble High Court of Punjab and Haryana passed in the case of CIT v. Haryana Hotels Ltd. reported in ( 2005) 197 CTR (P H) 449 wherein it was held that the mandate under Section 80 is that the losses under Sections 72(1), 73(2), 74(1), 74(2) and 74(3) if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Professional viz., Mr. Arumugam Arumugam as provided by the provisions of Section 30(6) of the Insolvency and Bankruptcy Code, 2016, (in short I B Code, 2016 ). 3. The prayers made by the Resolution Professional are as follows :- (i) Approve and give effect to the resolution plan submitted by the successful resolution applicant being the 2nd respondent herein and/or (ii) Pass such other orders or further orders in this regard as this Hon ble Tribunal may deem fit and proper and thus render justice. 4. Initially, CP/762/IB/2018 was filed under Section 7 of I B Code, 2016 read with Rule 4 of the Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by M/s. Asset Reconstructions Company India Ltd.,(in short, Financial Creditor ) against M/s. Sri Srivathsa Paper Mills Pvt. Ltd., (in short, Corporate Debtor ). CP/762/IB/2018 has been admitted on 13.11.2018, under which CIR Process was initiated against the Corporate Debtor, moratorium was declared, the Applicant was appointed as IRP on 14.12.2018 and thereafter, the Committee of Creditors (CoC) confirmed the Applicant as RP to conduct the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the 5th Meeting of CoC held on 22.04.2019, the Applicant had physically circulated a copy of the Resolution Plans along with Resolution Professional s certificate of compliance of Section 30 (2) of the Code and placed both the Plans before the CoC for their deliberations. The CoC members had a detailed discussion with the representatives of both the Resolution Applicants in relation to their Resolution Plans. The CoC members after having reviewed the plans, noted the scores obtained by both the Resolution Plans and requested the Resolution Applicants to revise their Plans, as suggested. Subsequently, 2nd Respondent viz., M/s. Hi Tech Bio Products, Chennai alone had submitted its revised Resolution Plan in the 6th Meeting of the CoC held on 26.4.2019. The Resolution Plan submitted by M/s. Hi Tech Bio Products, Chennai, was put to vote on 01.05.2019 and approved with 100% (e-voting) by the CoC. The financial snapshot of the Resolution Plan submitted by Resolution Applicant viz., M/s. Hi Tech Bio Products, in a tabular column is as follows: Sr. No. Particulars Amounts Admitted (in Rs) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. no. No. Name of Creditor Accepted Claiming Rs. Proposed Amount Paid Rs. Remarks 1 CIRP Cost 10,00,000/- 10,00,000/- Paid date of approval resolution plan by NCLT 2 Asset Reconstruction Company of India (ARCIL) - Financial Creditor 153,43,81,328/- 20,50,00,000/- 15,37,50,000/- (date of approval of resolution plan by NCLT) 5,12,50,000/- (immediately post 45 days post, approval of the Resolution Plan) In case of any appeal against the order of approval of the Resolution Plan, the second trench of payment shall be made after extinguishment of all appealable Rights. 3 Arjun Chemicals Ltd-Operational Creditor 19,63,772/- 2,55,290/-(immediately post 45 days post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars Amount a. Share Application money will be brought in by the Resolution Applicant, his spouse and associated concerns. 21.66 Crores b. Amount Payable to Financial Creditor and Operational Creditor and Statutory dues etc., (After Plan Approval) 21.66 Cores c. For revamping, Refurbishment of all machineries plus trial run expenses. 2.50 Crores d. Term Loan from Bank of Baroda (working capital requirement) 2.50 Crores e. From Bank as Cash Credit Limit. 8.00 Cores f. From Resolution Applicant 2.00 Cores Note:- It is planned to obtain cash credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bank Guarantee as required under Sub-Regulation (4A) of Regulation 36B of the Code. The Resolution Applicant had also paid the amount of ₹ 50,00,000/- in terms of the Resolution Plan. 14. Thus, the Resolution Plan filed with the Application meets the requirements of Section 30(2) of I B Code, 2016 and Regulations 37, 38, 38(1A) and 39(4) of IBBI (CIRP) Regulations, 2016. The Resolution Plan is also not in contravention of any of the provisions of Section 29A. The Resolution Professional has also certified that the Resolution Plan approved by the CoC s does not contravene any of the provisions of the law for the time being in force. The Compliance Certificate is placed at pages 32 to 35 of the typed set filed with the Application. 15. In view of the above, the Resolution Plan annexed with MA/484/IB/2019 filed in CP/762/IB/2018 is hereby approved, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan including Resolution Applicant. 16. While approving the Resolution Plan , as mentioned above, it is clarified that the Resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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