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TMI Blog2020 (9) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... enting Financial Creditor to be paid in priority, is liable to be rejected as it is not in conformity with Section 6 of the Insolvency and Bankruptcy Code (Amendment) Act, 2019 r/w Section 30(2) of the Code r/w Regulation 38 of CIRP Regulations, in the interest of justice and equity. - I.A. No. 09 of 2020 in C.P. (I.B.) No. 209/9/NCLT/AHM/2017 - - - Dated:- 26-5-2020 - Harihar Prakash Chaturvedi , Member ( J ) And Prasanta Kumar Mohanty , Member ( T ) For the Appellant : Rohit Lalwani, Sakshi Tibrewal, Ravi Pahwa, Hiten Parekh, PCA, Shiva Majmudar and Nishant Sharma JUDGMENT Per : Mr. Prasanta Kumar Mohanty , Member ( T ) 1. The instant application is filed by one of the Financial Creditors i.e. the IDBI Bank with 29.50% of voting share of the Corporate Debtor B.P. Foods Private Limited, seeking appropriate orders in relation to the compliance of the provisions of Section 30(2)(b)(ii) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as Code) r/w Regulation 38(ii)(b) of the CIRP Regulations which stipulate that the Financial Creditors who have dissented are required to be paid in priority, the amount to which they are entitled to. The Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court, this Adjudicating Authority by an order dated 22.11.2019 was pleased to direct the CoC to relook the Resolution Plan so as to make sure that the same is in conformity with the directions issued in the Judgment of Hon'ble Supreme Court. 6. The Applicant submits that in view of the aforesaid order dated 22.11.2019 made by this Adjudicating Authority, the respondent Resolution Professional called the CoC meeting on 03.12.2019 for reconsideration of the Resolution Plan. The Resolution Plan was discussed by CoC and was placed for e-voting which commenced on 04.12.2019 until 06.12.2019. The Applicant further submits that the applicant dissented and opposed approval of the Resolution Plan. The Resolution Plan was voted in favor by 70.50% voting share. The Resolution Professional, therefore, filed an IA No. 10 of 2019 before this Adjudicating Authority seeking approval of the Resolution Plan in favor of the Respondent No. 2. However, the aforesaid IA No. 10 of 2019 was disposed of by this Adjudicating Authority as withdrawn. 7. The Applicant further submits that the Applicant sent an email dated 13.12.2019 after declaration of e-voting result to the Resolution P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed through the requisite majority under Section 30(4) of the Code. 9.2 When in the matter of Essar Steel India Limited Vs. Satish Kumar Gupta Ors, Hon'ble Supreme Court clarified certain legal issues under the Code and based on the said order of Hon'ble Supreme Court, the NCLT sent back the Resolution Plan to the CoC to re-look in view of the aforesaid judgment vide order dated 22.11.2019. 9.3 That based on the aforesaid direction of NCLT dated 22.11.2019, the CoC reconsidered the Resolution Plan in the 12th CoC meeting dated 3rd December, 2019 and once again the Resolution Plan was approved by 70.50% of voting in assent and IDBI having voting share of 29.50 dissented the Plan. 9.4 It is submitted by the Resolution Professional that in between, there were certain amendments in the Code as well as in CIRP Regulations 2016. Among the others, the relevant amendments were in Section 30(2) of the Code which came into force on 16th August, 2019. The said amendment is reproduced hereunder: (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan-- (a) provides for the payment of insolvency resolution p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub section (1) of Section 53. - Whereas, the Dissenting Financial Creditor can claim the amount available to them in the event of liquidation of the Corporate Debtor under Section 53 only. Other option as available to the Operational Creditor is not available to the Dissenting Financial Creditor. 9.6 The Resolution Professional has further clarified that where the Dissenting Financial Creditors claim the amount as per the above provision, the payment will be in the manner as specified by the Board. Here it is important to understand that this being the substantive provision of the law, the same cannot be broken and only one beneficial part of the said amendment can be claimed. 9.7 The Resolution Professional in his aforesaid letter to the Applicant has stated about the amendment to Regulation 38 of CIRP Regulations announced on 28th October, 2019 on the matter of priority of payment to the Dissenting Financial Creditors. The same is reproduced below: Regulation 38 - Mandatory Contents of the Resolution Plan (1) The amount payable under a resolution plan - (a) to the operational creditors shall be paid in priority over financial creditors; and (b) to the financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt payable to ICICI Bank who has exclusive Charge on Vehicles of the Corporate Debtor 0.58 Net Amount available to Financial Creditors 33.23 10.4 The amount available to Financial Creditors under the Resolution Plan vis-a-vis in case of Liquidation will be as under: Rs. In Crores S. No. Name of Financial Creditor Amount available under the Resolution Plan Amount available in the event of Liquidation under Section 53(1) 1 IDBI Bank 18.54 15.06 2. State Bank of India 17.65 14.85 3 UV ARC 7.20 3.32 4 Kotak Mahindra Bank 2.82 NIL 5 ICICI Bank Limited 0.58 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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