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TMI Blog2020 (10) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... roving the Resolution plan, it is the duty of the Adjudicating Authority that it should satisfy itself that the Resolution plan as approved by the COC meets the requirements as referred to in subsection (2) of Section 30. The RP has complied with the code in terms of Section 30(2)(a) to 30(2)(f) and Regulations 38(1), 38(l)(a), 38(2)(a), 38(2)(b), 38(2)(c) 38(3) of CIRP regulations - The identity of the Resolution Applicants have been duly verified by the RP and affidavit as per section 30(1) of the Code has been obtained from the Resolution Applicants stating that they are not ineligible U/s 29A of the IB Code, 2016. The Plan also provides for keeping the Company as a going concern and operate in its normal course of business upon implementation of Resolution Plan. There is no objection filed by any other person in this regard. The Resolution Plan includes a statement under regulation 38(1A) of the CIRP Regulations as to how it has dealt with the interest of the stake -holders in compliance with the Code and Regulations thereunder - It is also evident that the Resolution Plan placed before this Adjudicating Authority, was approved by the Committee of Creditors in the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her stakeholders in accordance with the Code, 1.4. To pass an order directing that in accordance with Section 238 of the Code, any action undertaken pursuant to the Resolution Plan by the Resolution Applicant or the Company will not require compliance with requirements under any other laws. For the implementation of this Resolution Plan, and except as set out in the Resolution Plan, upon the Resolution Applicant ensuring compliance with the provisions of the Code, no further compliances, actions or consents will be required under other laws or regulations for undertaking the individual actions contemplated under the Resolution Plan. 1.5. To declare that the process of approval of resolution plan resolving the corporate insolvency of the corporate debtor under the I B Code is a complete code in itself and that the order approving the Resolution plan by the Adjudicating Authority i.e. the NCLT acting under the Code shall be deemed as a single window clearance for all actions proposed to be undertaken by the Resolution Applicant pursuant to the approved resolution plan and accordingly further, the process stipulated under the Code for implementation of a resolution plan is a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plan is of utmost importance, and therefore, all Governmental Authorities be required to take all necessary actions (if required) for the implementation of the Resolution Plan approved by the NCLT, without delay; (c) sanctioning the Resolution Plan submitted by the Resolution Applicant and making the Resolution Plan binding on the Company, all shareholders, Creditors, guarantors and all other stakeholders and persons, and ordering implementation of the Resolution Plan, without the requirement for any further act, deed, document or costs and (d) for such further or other order/s be made and/or directions be given as the NCLT may deem fit and proper in the facts and circumstances of the case and in the interests of justice 2. Brief facts as stated in the Application are as under: 2.1. That the present application has been filed by Mr. V. Shankar, Resolution Professional initially appointed as Interim Resolution Professional by this Adjudicating Authority vide its order dated 12th December 2018. In the meeting of Committee of Creditors (CoC) held on 11th January 2019, the Interim Resolution Professional was confirmed as the Resolution Professional by the CoC with 100% vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s Steels Private Limited ₹ 17,70,79,394 67.65% 4 Mr. Babulal Amarchand Singhvi ₹ 2,00,00,000 7.64% Operational Creditors' Claims: S. No. Name of Operational Creditors Amounts (in Rs. ) 1 Arka Carbon fuel Pvt. Ltd ₹ 3885310 2 Swasthik Coal Corporation Pvt. Ltd ₹ 21223904 3 Hemang resources ₹ 9248891 4 Magnifico Minerals Pvt. Ltd ₹ 58800000 4. The Successful Resolution Applicants namely M/s. Terapanth Foods Limited and M/s. Rav's Steels Private Limited as a consortium/Connected parties, are Companies incorporated in India. 5. The salient features of the Resolution Plan are as follows: 5.a) FINANCIAL PROPOSAL: (i) The Resolution Applicant proposes to infuse the Financial Commitment (detailed in the Table A below) into the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.12 0.02 1.07% 3 Hemang resources 1.00 0.92 0.01 1.07% 4 Magnifico Minerals Pvt. Ltd 5.95 5.88 0.06 1.07% c Employee and Workmen Due 0.16 0.00 - - D Other Creditors/Due/Claim Electricity Charges 0.22 0.00 - - Security Charges 0.01 0.00 - - E Preference Shareholders/Existing Equity Share Holders - - - - Total ₹ 40.55 ₹ 35.49 ₹ 17.85 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further Payment for refurbishment, repairs maintenance, Deposits and start-up expenses (₹ 3.00 Crores) Within 12 months Working capital Margin ₹ 13.00 Crores. Within 12 months *The Operational Creditors shall be given priority in payment over financial creditors 5,g) TREATMENT OF ONGOING LITIGATION AND VIOLATION: Upon approval of the Resolution Plan by the Adjudicating Authority, all Non-Compliances of the Corporate Debtor for the period prior to the Vesting Date (including but not limited to those relating to Tax), shall be deemed to be waived by all the Governmental Authorities. In relation to any noncompliance arising under any tax and duty benefit scheme (including, the Export Promotion Credit Guarantee Scheme), the relevant Government Authority (including, without limitation, the Director General of Foreign Trade) shall waive all such non- compliances by the Corporate Debtor without levying any fee, penalty or additional duty, and the Corporate Debtor shall be allowed sufficient time (and in any event not less than two years from the Vesting Date) to fulfill its obligation u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Resolution Plan is based on limited information provided to RA under Information Memorandum, which being considered as the base document, and our Resolution Plan is based on Information Memorandum, which may vary or require amendment in case any information in the Information Memorandum varies or is found to be wrong. e) Binding Effect: The Resolution Plan once approved by Hon'ble Adjudicating Authority shall be binding on the Corporate Debtor, its members, its promoters, all holders of claims, Resolution Applicant and all other parties in interest and each of their respective successors and assigns in accordance with Section 31(1) and 238 of the Code. f) Validity: The Resolution Plan is valid until the expiry of the time for the corporate insolvency resolution process ('CIRP'), and unless the Resolution Plan is approved by the Hon'ble Adjudicating Authority, this proposal contained in this Resolution Plan shall expire on the expiry of the time for CIRP. g) All Government and Non-government dues, Secured dues, unsecured dues, statutory dues, dues to Income Tax, Tax Deducted/Collected at Source, Sales Tax of various states, Excise Duty, Custom Duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . n) Refer Financial plan of Resolution Applicant for infusion of fund, payment mechanism etc. o) Time of one year from approval of plan by Adjudicating Authority or as required under the respective law whichever is more shall be provided for obtaining all necessary approvals, licenses and permissions (Including but not limited to pollution/environment approvals) for running the plant. p) All assets in financial statement other than fixed assets of SRIPL shall be considered not recoverable and written off. Further all the liabilities in excess of amount considered payable under this resolution plan shall be written off. q) On initial payment, peaceful vacant possession shall be provided of the all properties including land of 65.170 Acres situated at Nemkal and Hirdehal Village of Bommanahal Mandal or any other land together with other premises, shed, building, civil works, plant machinery, equipment's, electrical, utilities, infrastructure created. Intangible assets and other assets. r) All the assets of the Company including assets as mentioned in Section 36(3) of The Insolvency and Bankruptcy Code, 2016 shall continue to be absolutely owned, oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be treated as void under section 281 of the Income Tax Act, 1961 for any claims in respect of Tax or any other sum payable by the Corporate Debtor. Similarly any requirements to obtain waivers from any Tax Authorities including in terms of section 79 and Section 115B of Income Tax Act, 1961 is deemed to have been granted upon approval of this Resolution Plan on the Plan Approval Date. (iii) The Corporate Debtor and the Resolution Applicant shall be granted an exemption from all taxes, levies, fees, transfer charges, transfer premiums and surcharges that arise from or relate to implementation of the Resolution Plan, since payment of these amounts may make the Resolution Plan unviable. Foregoing reference to Taxes shall include the following: Transaction Cost Relevant Governmental Authority Any transfer premiums or charges, change of ownership/control charges payable in connection with the implementation of this Resolution Plan and the consequent change in the ownership and control of the Corporate Debtor. Includes but is not limited to: Telangana state Industrial Infrastructure Corporation, Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Company filling, Income Tax Filling, Sales tax/Laws, Inspection, Tax assessments, etc. or any other proceeding pending agents SRIPL is deemed to be settled and none of this proceeding against shall be carried forward. (ix) Proceeding for ROC Inspection, Non Compliance of various statutory provisions, and under various statutory provisions etc., shall be withdrawn liability associated would be extinguished. (x) Any corporate guarantee provided by the company shall be deemed to be cancelled/terminated. (xi) Brought forward losses under Income Tax including any business losses shall be allowed to be carried forward for set off against the taxable profits of future year's in spite of non-filing of returns/delayed filing of IT returns and change in shareholding. (xii) Without prejudice to the generality of the above, upon approval of the Resolution Plan by the Adjudicating Authority, the Ministry of Environment, Forest and Climate Change, the Central Pollution Control Board, the Telangana State Pollution Control Board, the Central Pollution Control Board, Inspector/Chief Inspector of Factories, Controller of Explosives, Chief Inspector of Boilers, Forest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired) as provided to TPL/RSPV/SPV before any proceedings, tax authority, government, court, tribunal or any statutory or judicial authorities. The books of accounts shall be as provided to us by resolution professional and TPL/RSPV/SPV or new promoters/directors shall not be liable for any non-maintenance/in proper maintenance of books of accounts or any other records till vesting date. (xx) The existing Statutory, Internal Auditor, Company Secretary, Cost accountant, Advocate etc. shall stand terminated/deemed resigned and new auditor shall be appointed in EGM of the Company after approval of resolution proposal in NCLT and after Allotment of initial Subscription. Other professional/consultant shall be appointed as decided by TPL/RSPV. w) If after approval of plan by Adjudicating authority and payment made by the resolution applicant under this plan if the implementation of the plan is restricted by any higher tribunal/court then COC shall refund the entire amount paid by the Resolution Applicant with interest of 12% p.a. x) In case the resolution plan submitted is not approved by the Adjudicating Authority within one year the same shall stand withdrawn and no liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the Corporate Debtor. c) Provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; d) The implementation and supervision of the resolution plan; e) Does not contravene any of the provisions of the law for the time being in force f) Confirms to such other requirements as may be specified by the Board. 11. Section 30(4) of the Code as it stands at present after the amendment reads as follows: - (4) The committee of creditors may approve a resolution plan by a vote of not less than sixty-six percent, of voting share of the financial creditors, after considering its feasib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been duly verified by the RP and affidavit as per section 30(1) of the Code has been obtained from the Resolution Applicants stating that they are not ineligible U/s 29A of the IB Code, 2016. 18. The Plan also provides for keeping the Company as a going concern and operate in its normal course of business upon implementation of Resolution Plan. There is no objection filed by any other person in this regard. 19. Copy of Form-H (Compliance Certificate) filed by the RP along with the Plan has been perused and considered. The RP inter-alia has certified as under: i. The said Resolution Plan complies with all the provisions of the Insolvency and Bankruptcy Code 2016 (Code), the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and does not contravene any of the provisions of the law for the time being in force. ii. The Resolution Applicant M/s. Terapant Foods Limited and M/s. Rav's Steels Private Limited as consortium/connected parties has submitted an affidavit pursuant to section 30(1) of the Code confirming its eligibility under section 29A of the Code to submit resolution plan. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CoC in their Commercial Wisdom. In para 42 of the said judgment, Hon'ble Apex Court has observed as under: Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Committee of Creditors, has to be within the four corners of section 30(2) of the Code, insofar as the Adjudicating Authority is concerned, and section 32 read with section 61(3) of the Code, insofar as the Appellate Tribunal is concerned, the parameters of such review having been clearly laid down in K. Shashidhar (supra). 25. In view of the discussions in the foregoing paragraphs, the 'Resolution Plan' filed with the Application meets the requirements of Section 30(2) of the 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. Hence, this Adjudicating Authority is satisfied that the Resolution Plan is in accordance with Law. Therefore, the 'Resolution Plan' annexed with Application bearing IA No. 779 of 2019 filed in CP(IB) No. . 344/9/HDB/2018 is hereby approved, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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