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TMI Blog2019 (4) TMI 1869X X X X Extracts X X X X X X X X Extracts X X X X ..... tion plan and reconsider the already approved resolution plan is confined by the scheme of the I B Code. The Resolution plan is approved - moratorium declared. X X X X Extracts X X X X X X X X Extracts X X X X ..... n and incomplete documentation. Therefore, resolution plans of only two resolution applicant were considered henceforth. In the tenth CoC meeting, the Dera Finvest Pvt Ltd improved its resolution plan by a further amount; however, Mr Rajendra Jaiswal refused to improve his bid. 8. The final resolution plan submitted by the resolution applicant Dera Finvest Pvt Ltd was put to the vote for approval after the tenth CoC meeting held on 31.10.2018. The final resolution plan as submitted by the resolution applicant was approved by 98.72% of the CoC in the e-voting conducted on 01.11.2018-02.11.2018. As per the result of the e-voting held on 01.11.2018-02.11.2018, the resolution plan of Dera Finvest Pvt Ltd was approved with the requisite majority in favour. 9. Eventually the RP, on 05.11.2018, filed M.A. No. 1363/2018 under section 30(6) of I&BCode placing the resolution plan as approved by the committee of creditors before the Adjudicating Authority. 10. It is pertinent to note the following submission of RP as salient features of the resolution plan: Sr. No Particulars Amount Due Payment Proposed Waiver 1. CIRP Cost (As the cost is regularly met from current cash flows of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Resolution Applicant has to the extent possible, taking into account the interest of all the stakeholders of the Corporate Debtors by its assessment of the viability of the investment to be done in the Corporate Debtor. 14. The Resolution Plan states that the term of the proposed resolution plan will commence from the Effective Date i.e. the next date of the date of approval of the plan by the Adjudicating Authority or Appellate Authority, as the case may be, and shall continue until the dues are paid in full as per the resolution plan and all other related provisions are fully implemented. The Implementation Period is agreed to be 6 months as per the resolution plan from the effective date. The resolution applicant has undertaken that it shall ensure that the existing directors of the Corporate Debtor shall vacate the post of directorship and under it, a new Board of Directors and manager shall manage and control the affairs of the corporate debtor. 15. According to the valuation reports, it is submitted by the RP that the liquidation value of the Corporate Debtor is ₹22.78 crores and the fair market value of the Corporate Debtor is ₹32.48 crores. As compare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and relatives of the resolution applicant shall be shareholders and some of them would be appointed as Directors of the Corporate Debtor. The resolution applicant intends to retain Mr Rakesh Bhattacharya, who has been appointed by the RP as Chief to head the operations as he has vast experience in running the distilleries company in various states of India under the UB Group. The Plan also envisages appointment of Mr Dushyant C Dave, RP, for supervision of resolution plan till the completion of implementation of the resolution plan. e) The RP has submitted that the Resolution Plan does not contravene any of the provisions of the law for the time being in force in terms of Section 30(2)(e). 18. The Resolution Plan was put to the vote in the Tenth CoC meeting, and as per section 30(4), the said plan was approved by 98.72% of the CoC. 19. The RP has submitted Form-H dated 02.11.2018, as required under regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 certifying that a. The resolution plan complies with all the provisions of the I&B Code and applicable regulations thereunder and does not con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er law. The name of new management be endorsed on all such rights and entitlements as may be required only to the extent necessary for operating the Corporate Debtor. 24. The reliefs sought under point 18 (Other Reliefs Sought) from subpoint 'e.' to 'k.' and 'u' are regarding the waiving of the liabilities of the Corporate Debtor. It is directed that only the past liabilities that have crystalized are waived off and no future or contingent liability that has not yet crystalized shall be deemed to be waived off by order of this Tribunal. Rest all the reliefs sought shall be allowed, subject to the applicable law in force including Income Tax dues. 25. Any relief, if sought in the Resolution Plan, where the contract/agreement/understanding/proceedings/actions/notice etc. is not specifically identified or is for future and contingent liability is at this moment rejected. 26. The resolution plan has necessary provisions for its effective implementation. 27. The Harkar Developers Pvt Ltd has filed an affidavit dated 30.01.2019 as an application for intervention, stating that resolution applicant of the approved resolution plan consists of persons who are accused in a criminal case t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating authority. The Applicant has admitted that he has got the copy of the Resolution Plan. In the circumstances, erstwhile Board of Directors may only be given an opportunity to file the objections against the resolution plan within five days from today with a copy in advance to the Resolution Professional and Resolution Applicant with a liberty to file an additional reply." 30. The objections raised by the promotor/director of the Corporate Debtor regarding the ineligibility of resolution applicant under section 29A are not supported by any specific averment and are generally stated. The same cannot be accepted in the absence of any specific and material averment when the resolution applicant has given affidavit of eligibility as per section 30(1) and the same is certified by the RP as being in order in his Form-H dated 02.11.2018, as required under Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 31. The objections regarding the promotor/director of the Corporate Debtor not being given the two rejected resolution plans are sans merit because that was not even put for voting of CoC and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order to deposit 25% of the proposed offer amount, i.e. ₹ 13,12,50,000 by way of Demand Draft by 21.2.2019. It is pertinent to mention that if the applicant does not deposit the said amount by 21.2.2019, then action can be initiated against the applicant." 33. The Chhattisgarh Distilleries Limited has deposited ₹13,12,50,000/- with the office and established its bona fide. 34. It is a peculiar situation in the present case where a resolution applicant is before this Adjudicating Authority offering better value to the Corporate Debtor, but this Adjudicating Authority cannot send the approved resolution plan back to the CoC for reconsideration along with apparently better Resolution Plan on two counts firstly, the resolution applicant has come after the submission of the approved resolution plan to the Adjudicating Authority, and secondly, the CoC or RP has not sought any relief to recall the approved resolution plan and for allowing them to reconsider the approved resolution plan along with the new resolution plan offering better value. The power of this bench to suo moto direct the CoC to consider the new resolution plan and reconsider the already approved resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have given projections backed by normative data, but still, in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code. … 44. Suffice it to observe that in the I&B Code and the regulations framed thereunder as applicable in October 2017; there was no need for the dissenting financial creditors to record reasons for disapproving or rejecting a resolution plan. Further, as aforementioned, there is no provision in the I&BCode which empowers the adjudicating authority (NCLT) to oversee the justness of the approach of the dissenting financial creditors in rejecting the proposed resolution plan or to engage in judicial review thereof. Concededly, the inquiry by the resolution professional precedes the consideration of the resolution plan by the CoC. The resolution professional is not required to express his opinion on matters within the domain of the financial creditor(s), to approve or reject the resolution plan, under Section 30(4) of the I&B Code. At best, the Adjudicating Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ser than the Fair Market Value. c. The Hon'ble Supreme Court in the case discussed Supra held that It cannot make any other inquiry nor is competent to issue any direction in relation to the exercise of commercial wisdom of the financial creditors be it for approving, rejecting or abstaining, as the case may be d. In view of the order of the Hon'ble Supreme Court, since the CoC has approved the Resolution Plan we have no other option but to approve the Plan. e. It is also worthwhile to mention that 270 days was over on 12.11.2018 and the new Resolution Applicant namely Chattisgarh Distilleries Ltd. filed MA on 13.02.2019 which was very much after the stipulated date of 270 days'. Preamble of IBC is inter alia, provides for Insolvency Resolution of Corporate persons in a time bound manner for maximisation of value of assets of such persons. f. In the instant case though this new Resolution Applicant proposed for an amount of ₹52.50 Cr. but which is very much after the statutory period prescribed in the IBC. Therefore, we at this moment not inclined to consider the MA of Chhattisgarh Distilleries Ltd. It is akin to evincing interest to participate in a match after the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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