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TMI Blog2020 (9) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Sharma (herein referred as 'Respondent No. 2'). The Respondent No. 2 has submitted that there are two pending applications i.e. CA No. 260 and 261 of 2019 filed by the Ex-Management before this Authority and there is no outcome in the abovementioned applications. The Respondent No. 2 further submitted that the Applicant despite having the knowledge and as per the records, the value of the properties of the Corporate Debtor has to be valued to Rs. 490 Crores which is the actual value, but as per the Resolution Plan only Rs. 143 Crores are proposed to be infused, which is against the actual valuation as the COC is only interested in recovering their money by selling off the properties of the Corporate Debtor at throw away price. It is alleged that the Ex-management was not given any chance to participate in order to appraise about the actual valuation of the properties. It is further contended that there is no clarity about the financial resources, Bank Guarantee/performance security and Form 'H' is not in compliance with the amended Form 'H'. There are other objections which are to be dealt with while discussing the reply to the objections. It is furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pushed into liquidation, which is the last resort. The other contention that the Resolution Plan is not compliant of Regulation 36B (4A) of the CIRP regulations, 2016 is not only misconceived but the same is untenable. The COC has duly followed the procedure and the Resolution applicant in terms of the Request for Resolution Plan has already deposited the performance bank guarantee dated 13.06.2019 of Rs. 50 crores on 14.06.2019 with the Applicant. 6. The Applicant further submits that this Authority vide Order 26.08.2019 dismissed CA. 260 & 261 of 2019, finding no merit in the Applications and has discussed other relevant points at length. The Applicant/resolution professional has referred to the decision of the Supreme Court in the case of Swiss Ribbons Pvt Ltd & Anr Vs. Union of India &ors., [2019 SCC online SC 73] wherein the provisions of the Code is interpreted as follow: - "......It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate Debtor by protecting the corporate death by liquidation. The code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... committee of creditors. Sub-committees can be formed for administrative work but their acts need to be ratified by the committee of creditors. The Section 31(1) of IBC, 2016 provides that once a resolution plan is approved by the Committee of Creditors, it shall be binding on all stakeholders, including guarantors. 9. During the course of hearing the Counsel for Respondent No.2 raised the objection that the value of the assets of the CD is more and the resolution plan offers less, which is against the concept of maximising the value of the assets of the CD. In this connection a reference can be made to the observation of the Hon'ble Supreme Court made in the matter of Maharashtra Seamless Limited vs. Padmanabhan Venkatesh & Ors [Civil Appeal No.4242 of 2019]. In this case the Apex Court, vide its order dated 22.01.2020 has observed that there is no provision in the Code or regulations under which the bid of any resolution applicant has to match liquidation value arrived at in the manner provided in Regulation 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and the intent of conducting valuation is onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of letter/information relating to financial resources, bank guarantee of Rs. 5 crores dated 19.03.2019 issued by RBL bank, Comfort Letter dated 20.03.2019 issued by RBL bank, Performance Bank guarantee of Rs. 50 Crores dated 13.06.2019 issued by Induslnd Bank which was renewed to 12.05.2020 and again renewed till 12.12.2020, comfort Letters from Induslnd bank dated 14.01.2020, and 07.07.2020 are placed on record. Further, it is noted that the amended Form-H, provides that the Resolution Plan complied with the provisions of the IBC and the regulations, 2016 and does not contravene any of the provisions of law for the time being in force. It also indicates that the Fair Value is Rs. 157.12 Crore, the Liquidation Value as Rs. 125.92 Crore. 12. Having demonstrated as above, the Applicant/resolution professional submits that the Objections raised by the Respondent No. 2 are misconceived on the ground that the provisions investing jurisdiction and authority in the Adjudicating Authority do not provide for security of the commercial decision made by the committee of Creditors, but to examine as to whether the resolution plan is in compliance with the provisions of Section 30(2) of IBC,20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time line which was resolved in the 7th meeting of the COC five prospective Resolution Applicants submitted EOI. 17. In 9th meeting of the COC held on 06.03.2019 the COC was reconstituted as the claim of State Bank of India as financial Creditor was approved and therefore there was change in voting percentage. In the 10 th Meeting of the COC convened on 28.03.2019 the members of the COC unanimously approved the appointment of M/S. Bagchi & Gupta, Chartered Accountants as consultants for carrying out the due diligence required under Section 29A of the Code for the two Resolution Plans received from two prospective Resolution Applicants viz, (1) M/S. NCJ Infrastructure Private Limited and (2) Krishna Constructions. In the 1 1 th meeting of the COC held on 05.04.2019 the members approved and allowed the Applicant to get the repairs of the air conditioning plant of the hotel and gen set installation at the hotel of the Corporate Debtor in order to keep them in the running condition. One of the prospective Resolution Applicants viz., Mr. Amit Goyal filed CA. No. 267 of 2019 before this Authority seeking inter-alia direction to the Applicant to accept and take on record the documents/in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of Commerce (hereinafter referred as 'OBC'). b. The Amount due to the Operational Creditors (other than Employees and Workmen) is Rs. 7,09,71,696/-. All the claims admitted by the Resolution professional shall be paid in full within 6 months from the Effective date. c. The Amount due to Employees and Workmen is Rs. 21, 55,531/-. All the claims admitted by the Resolution professional shall be paid in full within 6 months from the Effective date and in no event the payments shall exceed the above said amount. d. The amount of Rs. 28, 75, 99,300/- which is due to other creditors whose claims were either not admitted or not submitted by the Creditors are classified as Other Creditors. Resolutions proposal: a. The Claims of the Financial Creditors amounts to Rs. 92,76,53,201 after adjustments as mentioned in the Resolution Plan. Amounts shall be repaid as and when the bank guarantees are invoked by the relevant party/authorities and amount is released by SBI and OBC. No equity shares shall be allotted to the Financial Creditors towards the outstanding dues. All the outstanding dues (other than Bank guarantee amount which would be dealt according to the clause i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Monitoring Committee shall continue to manage the affairs of the company. All existing directors and all key Managerial Personnel of the Company shall be deemed to have resigned and vacated their office, and the board of director of the Company shall be reconstituted by the Resolution Applicant in accordance with Applicable Laws. b. The Resolution Applicant shall hold 100% of the equity share capital of the company. c. The existing equity shareholders of the Company shall not have any right in relation to the shares held by them in the company during implementation of the Resolution Plan. d. As per the Addendum to the Resolution Plan dated 29.05.2019 the Monitoring Committee will consist of the nominees of the Committee of Creditors, a nominee of Resolution Applicant and the Resolution Professional, who shall jointly supervise the implementation of the Resolution Plan. 22. It is specifically noted that the Resolution Applicant will infuse capital of Rs. 1, 00, 00,000/- in the Company by way of equity/equity linked instruments. Further depending on the requirements of the Company, the Resolution Applicant proposes to infuse the additional funds up to Rs. 9,00,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conditions are: i. In the event the CIRP cost is up to Rs. 4, 50, 00,000/-, then shall be payable in priority to the repayment of other debts of the Corporate Debtor as under: CRP cost up to Rs. 25,00,000 within 30 days of effective date in accordance with priority schedule provided in code. Balance CIRP costs within 180 days of effective date in accordance with priority schedule provided in the code. ii. In the event the actual CIRP cost is lesser than Rs. 4,50,00,000/- then it shall be payable in priority to the payment of other debts of the Corporate Debtor, in accordance with the Schedule given in the Resolution Plan and the excess CIRP cost shall be adjusted against the financial Creditors in accordance with the Schedule given in Resolution Plan. The Resolution Plan also deals with the interest of all the stakeholders. Section 30(2)(b) of the I&B Code, 2016 And Regulation 38(1) of IBBI (Insolvency Process for Corporate persons) Regulations, 2016 The Resolution Plan provides for the payment of 100% the admitted claims of the Operational Creditor including those of the Employee and Workmen. Yes, the priority has been given. Section 30(2)(c) and Section 30(2)(d) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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