9911796707
TMI Blog2019 (10) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the Resolution Plan approved under Sub-section (1) of Section 31 of the I B Coded, 2016, obtain the necessary approval 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 - order of moratorium dated 12.03.2018 passed by this Adjudicating Authority under Section 14 of I B Code, 2016 shall ceased to have effect from the date of passing this Order. - MA No. 179/2019 CP /39/IB/2018 - - - Dated:- 12-6-2019 - CH. MOHD SHARIEF TARIQ, MEMBER (JUDICIAL) For The RP : Mr K. Moorthy, Counsel For The Professional : Mr Vasudevan, For The Committee of Creditors : Mr E. Om Prakash, Sr. Counsel R. Murali, Counsel For The Financial Creditor (Objector) : R. Shankaranarayanan, Sr. Counsel, Avinash Krishnan Ravi, Counsel For The Noticee : Mr Anand Sashidharan, Gautham Venkatesh, Counsel For The Objector : Mr. P.H. Arvindh Pandian, Sr. Counsel ORDER CH. MOHD SHARIEF TARIQ, MEMBER (JUDICIAL) 1. The Miscellaneous Application No. 179/2019 has been filed in CP/39/IB/2018 by the Resolution Profession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements for receiving claims, collating the same, conducting the CIR Process by taking possession of the assets, valuing the assets, re-verification of the claims, protecting and preserving the assets of the Corporate Debtor. 7. It is further stated that pursuant to the publication dated 24.12.2018, the Applicant received EoI from three prospective Resolution Applicants with documents including the financial statements. The details of Resolution Applicants are as follows: Particulars Net Worth Turnover Eligibility Criteria (As fixed by the CoC for Prospective Resolution Applicants as per EoI as per the last audited Financials) ₹ 125 Crores ₹ 75 Crores Embassy Property Developments Private Limited, Bangalore ₹ 1507.32 Crores ₹ 805.08 Crores Noble Tech Industries Private Limited, Chennai ₹ 175.70 Crores ₹ 597.09 Crores Valency International Trading Pte Limited, Singapore USD 44,476,133 (₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CoC members voted against the Resolution Plan submitted by VITPL; and ii. 2nd set (with all the CoC members) of the CoC members voted in favour of the Resolution Plan submitted by EPDPL with 98.09% of voting share and 100% of voting share of the CoC members voted against the Resolution Plan submitted by VITPL. 12. The Resolution Professional has stated that the Resolution Plans received by him were duly evaluated by the CoC members and on 27.02.2019 the Resolution Plan submitted by EPDPL was elected as the successful Resolution Plan as per the voting share mentioned above. The financial snapshot of the Resolution Plan submitted by EPDPL in a tabular column is as follows: Sr. No. Particulars Amounts Admitted (in Rs) Amounts Proposed (in Rs) 1. CIRP Costs (upto the approval date) Upto and not exceeding 5,00,00,000 2. Workmen Dues and Employees Dues 8,38,16,991 4,75,68,505 2(a) Workmen Dues 4,24,38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittee is invalid. The Resolution Professional and other persons will get illegal benefit from the approval of the Resolution Plan. The Objector has also stated that the pending MAs were to be decided first and then the Resolution Plan should have been taken into consideration. He has questioned the quantity of the material lying on the spot and seeks forensic audit of various transactions in relation to the Corporate Debtor. It is also alleged that the Resolution Plan is discriminatory. In connection with the objections noted above, there does not appear any provision in the IBC to prescribe any role for the shareholders of the Corporate Debtor during the CIR Process, as there require no approval of the shareholders to implement actions under the Resolution Plan . A reference may be made to an Explanation to Sub-Section (2) of the Section 30 of IBC, 2016 which provides that if any approval of shareholders is required under the Companies Act 2013 or any other Law for the time being inforce for the implementation of the action under the Resolution Plan, such approval shall deemed to have been given and it shall not be a contravention of that Act or Law. Thus, it becomes clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on the judgement of the Hon ble Apex Court given in K. Sashidhar v. Indian Overseas Bank and Ors., reported in MANU/SC/0189/2019,2, wherein, it has been held that the legislature while enacting the IBC has given a paramount status to the CoC and its commercial decisions cannot be interfered with by the Adjudicating Authority or the Appellate authority. In view of this, the objections, except the matters pending relating to the claims rejected by the resolution professional, raised by the dissenting Financial Creditor stand rejected. The issue relating to the pending matter is being dealt in the subsequent paras. Analysis of Resolution Plan; 15. The perusal of the Resolution Plan shows that as per the list of the claimants provided by the Resolution Applicant viz., M/s. Embassy Property Developments Private Limited (EPDPL), the status of claims is as follows: S. No. Nature of Claimant Amounts Claimed (INR) Amounts Admitted (INR) 1. Workmen dues Employee dues 12,81,73,835 8,38,16,991 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Applicant viz., M/s. EPDPL provides for the management of the business and operations of the Corporate Debtor from the Approval Date till the Effective Date and on or after Effective Date , in the manner set out as under.: * A Monitoring Committee is to be formed comprising of existing Resolution Professional, 1 representative of Financial Creditors and 2 representatives of Resolution Applicant ( Monitoring Committee ). The Resolution Professional shall be paid the Resolution Professional Costs as mutually agreeable in consideration of fulfilling his obligations under this Plan. The constitution of the Monitoring Committee, including its reconstitution from time to time, shall be at mutually agreed terms with CoC Members for the period with effect from the Approval date to the Effective date. It is clarified that such reconstitution shall, at all times until the Effective Date, ensure that the Monitoring Committee shall have at least 1 representative of Financial Creditors and 2 representatives of Resolution Applicant. If required, the Monitoring Committee will appoint an interim board for the Corporate Debtor comprising of such Persons as may be deemed appropriate by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Debtor. * The powers of the Board of Directors of the Corporate Debtor shall remain suspended until the Effective Date and shall be exercised by the Monitoring Committee. All existing directors of the Corporate Debtor as of the Insolvency Commencement Date would be deemed to have vacated office. * The Resolution Applicant has submitted INR 5,00,000 (Rupees Five Lakhs only) as process participation deposit as per requirement of the Process Note. The aforesaid amount shall be refunded to the Resolution Applicant on Approval Date as per the terms of the Process Note. * On the Effective Date, the Resolution Applicant shall assume Control of the management of the Corporate Debtor including to re-constitute the Board of the Corporate Debtor and the reconstituted Board of the Corporate Debtor shall manage the business and operations of the Corporate Debtor. The Resolution Applicant will be entitled to file appropriate forms with the Registrar of Companies and such directors shall provide all necessary support, including by providing forms, undertaking as may be required, to the Resolution Applicant to achieve the foregoing. * As of the Effective Date, all powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution Professional or the Corporate Debtor in furtherance thereof such sum shall be deemed to have been received for the benefit of Resolution Applicant. The Resolution Applicant shall cause the Corporate Debtor to render reasonable co-operation to the Resolution Professional or any Person pursuing the remedies contemplated herein, without inhibiting or interfering with the functioning of the Corporate Debtor in any manner. 19. The Resolution Plan further offers the declarations of the Resolution Applicant i.e., i) the Plan is not in contravention of the provisions of the Process Note, the Code, the CIRP Regulations and other Applicable Law; ii) The Resolution Applicant has not been declared as a wilful defaulter by RBI and the names of none of its directors appear in the list of wilful defaulters issued by RBI; iii) The Resolution Applicant has dealt with the interests of all Stakeholders under this Plan, in a manner compliant with the provisions of the Code; iv) The Resolution Applicant has the necessary financial resources available for supporting the Plan and any further infusion/contribution of additional funds into Corporate Debtor, as indicated in the Plan; v) The Reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gregates to INR 14,20,25,914 shall be paid towards full and final payment within a period of 15 days from the Approval Date. Upon payment, the security created in favour of IOB shall stand released and free from all encumbrances and no further charge shall attach on the same. As regards the other Financial Creditors, the claim admitted aggregates to INR 1,95,10,13,277, the Resolution Applicant proposes to proportionately settle upto 25% of the said claim aggregating to 48,77,53,319 as full and final settlement of all claims by operating the iron ore and barytes mines of the Corporate Debtor as a going concern and by sale of existing stock. In this manner, the Resolution Applicant proposes to generate sufficient cash flows to enable the Corporate Debtor to settle the other Financial Creditors. The payments to the other Financial Creditors shall be proportionately disbursed to each of the other Financial Creditor as full and final settlement of the said Financial Creditors claims on the first anniversary of the Approval Date. iv. The claims of the Operational Creditors are aggregating to INR 94,63,86,409 (Rupees Ninety Four Crores Sixty Three Lakhs Eighty Six Thousand Fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant in executing all requisite agreements with CoC/RP on approval of the Plan by NCLT Continuation of the Business Operations The Monitoring Committee should ensure continuation of the Business Operations on a going concern basis Intimation to the MCA, CoC, IBBI, RBI, Tax Authorities and various other Statutory Authorities (as applicable) The Monitoring Committee will be responsible for intimating the Statutory Authorities (as applicable) regarding the Approval of the Plan and effects of the same on implementation. Intimation to all Creditors, Existing Security Holders and other stakeholders of the Company The Monitoring Committee will be responsible for intimating the various stakeholder of the Corporate Debtor regarding the Approval of the Plan and effects of the same on implementation. Other Approvals/Filings required under the Plan - RBI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Authority, are to be dealt with under the Resolution Plan approved by the CoC and ii) to state the timeline within which the Resolution Applicant proposes to infuse ₹ 89 Crores in the Corporate Debtor to satisfy the claims of the Creditors as provided in the Resolution Plan. In this regard, the Resolution Applicant has filed an Affidavit clarifying issue No.i as follows:- If any of the claims of the said claimants are allowed, their respective claims will stand satisfied within that category of the claimant, namely Financial Creditors upto 25% and Operational Creditors upto 15% and the total Resolution Plan cost is provided as ₹ 89,43,05,699/-. As such, we hereby confirm and reiterate that no claims on being allowed to be included bu the orders of the Hon ble Tribunal will remain left out or unsatisfied within the Resolution Plan. If the admitted amount increases in terms of any such order the amount shall be shared proportionately among the respective class of creditors based on the percentage of the admitted claim amount. Any surplus available will satisfy the claims in another class. (Emphasis supplied) 23. On issue No. ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Compliance Certificate is placed at pages 102 to 109 of the typed set filed with the Application, The Resolution Plan annexed with MA/179/IB/2019 filed in CP/39/IB/2018 is hereby approved, [subject to the observations made herein above] which will become effective from the date of passing of this Order and is binding on the Corporate Debtor and its shareholders, employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan including Resolution Applicant. 27. The Resolution Applicant shall, pursuant to the Resolution Plan approved under Sub-section (1) of Section 31 of the I B Coded, 2016, obtain the necessary approval 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. 28. The order of moratorium dated 12.03.2018 passed by this Adjudicating Authority under Section 14 of I B Code, 2016 shall ceased to have effect from the date of passing this Order. 29. The Resolution Professional shall forward all record relating to the conduct of the CIRP and the Resol ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
