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TMI Blog2021 (2) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... h the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2) when the Resolution Plan does not conform to the stated requirements. The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39(4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved. Application allowed - moratorium declared. - IA No. 2221 of 2020 in CP (IB) No. 1349/MB/2017 - - - Dated:- 22-1-2021 - Janab Mohammed Ajmal, Member (Judicial) and Shri V. Nallasenapathy, Member (Technical) For the Applicant : Mr Karl Shroff, Counsel with Mr Durgaprasad Halwai i/b. Singh Co. ORDER This is an Application under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (the Code) by the Resolution Professional seeking approval of the Resolution Plan submitted by the Resolution Applicant i.e., Consortium of seven investors (Onkar Sakhar Karkhana Pvt Ltd, Babu Dadasaheb Botre, Rekha Babu Botre, Jitendra Bhaskarrav Malvadkar, Reise Enterprises through its par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2019, inviting EOI from PRAs for submission of Resolution Plan. In response to fresh Form-G, the Applicant received EOIs from three PRAs, out of which only one PRA, viz. Consortium of Investors led by Onkar Sakhar Karkhana Private Limited (the present Resolution Applicant/RA) emerged eligible to submit a Resolution Plan. 6. The Applicant filed MA No. 4028 of 2019 seeking extension of CIRP period. This Tribunal by an Order dated 27.02.2020 extended the CIRP period till 25.04.2020 so that a resolution of the Corporate Debtor could be achieved. 7. Thereafter, the Applicant issued Information Memorandum and Request for Resolution Plan (RFRP) to the RA and the RA was asked to submit the Resolution Plan on or before 20.03.2020. However, due to the restrictions imposed by the Government in view of Covid-19 pandemic, the RA was not able to submit the Resolution Plan in time and was hence allowed to submit the same before 25.03.2020. But, the Government declared nationwide lockdown on 24.03.2020 and the RA could not submit the Resolution Plan as directed. 8. The Resolution Plan was belatedly submitted on 06.06.2020 and the RA also provided certain additional information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Corporate Debtor shall stand cancelled and equity share capital of the Corporate Debtor shall be replaced with new equity share capital of ₹ 4,00,00,000/- in the name of Lead member only, with the fund to be infused by the Lead member or members of the consortium of Resolution Applicant. New Equity Shares of the Corporate Debtor shall be allotted as follows: Sr No Name of Equity Shareholder No. of Equity Shares of Rs. 100/- each Amount of Face Value of ₹ 100/- each 1 Onkar Sakhar Karkhana Private Limited (OSKPL) 3,99,994 3,99,99,400/- 2 Rekha Baburao Botre nominee member of (OSKPL) 1 100/- 3 Babu Dadasaheb Botre nominee member of (OSKPL) 1 100/- 4 Jitendra Bhaskarrav Malvadkar nominee member of (OSKPL) 1 100/- 5 Prashant Dadasaheb Botre nomi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... **Further amount of loan contribution of ₹ 2,00,00,000/- (Rupees Two Crore Only) to be brought by the members of the consortium of Resolution Applicant within 75 days from the date of receipt of the plan approval order from the Adjudicating Authority. D. GOING CONCERN: The Resolution Applicant shall acquire the Corporate Debtor as a going concern unit as a separate legal entity and Corporate Debtor shall become the wholly owned subsidiary (WOS) of the Resolution Applicant i.e., 100% shareholding of the Corporate Debtor shall be held by the Lead member of Resolution Applicant i.e. OSKPL. E. TOTAL RESOLUTION AMOUNT: The package of finance of Resolution Plan obligation is basically divided into owned funds and loan funds. The amount of ₹ 23,00,00,000/- (Rupees Twenty Three Crore Only) is the total amount provided for the payment of all the creditors/stakeholders under the Resolution Plan and shall be sourced from owned funds of ₹ 6,00,00,000/- (Rupees Six Crore Only) and balance amount of ₹ 17,00,00,000 (Rupees Seventeen Crore Only) shall be raised by way of borrowed fund. F. FINANCIAL TERMS: The distribution of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NIL TOTAL 71,13,02,000 23,00,00,000 Note 1: The Resolution Plan provides for Corporate Insolvency Resolution Process cost (CIRP Cost) which has been estimated up to ₹ 42,00,000/- which includes payment to IRP and/or RP and all amount of expenses incurred by IRP and/or RP, to the extent duly ratified or approved by the CoC and shall be paid by Resolution Applicant in priority over all other claims of creditors/stakeholders under the Resolution Plan and within 30 days from the date of receipt of the order upon approval of Resolution Plan by Adjudicating Authority. In case the amount of CIRP Cost goes beyond estimated cost of ₹ 42 lacs, then Resolution Applicant shall bear the said cost. It is submitted by the Applicant that the CoC has passed a resolution at its 17th meeting approving the CIRP Cost from the date of commencement of the CIRP till 23rd October, 2020 amounting to ₹ 49,77,892/- and has also approved the CIRP Cost being incurred/to be incurred by the Applicant after 23rd October, 2020 till the date of approval of Resolution Plan/order for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd final settlement of their dues against the Corporate Debtor, within 30 days from the receipt of the order upon approval of the Resolution Plan by the Adjudicating Authority and the same shall be paid in priority over the Financial Creditors. The balance dues of the Operational Creditors shall stand waived. Note 4: The total principal outstanding of the statutory dues as stated in the above Table shall be settled by the Resolution Applicant by making an overall payment of ₹ 1,05,000/- within 30 days from the receipt of the order upon approval of the Resolution Plan by the Adjudicating Authority without any further interest i.e., interest free manner. The Plan provides that upon approval of the Resolution Plan by the Adjudicating Authority all the dues of the Statutory Authorities shall stand deemed to be paid as per the Plan in full and final settlement of the dues. Note 5: As per information received by the Resolution Applicant pursuant to the Information Memorandum, the Corporate Debtor is not functioning for the last 3 to 4 years and hence there are no employees working with the Company. The Resolution Plan provides that any claim, dues, etc. towards paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise in future and which may or may not have been confirmed in past, during or before the CIRP or even may be confirmed in the time to come or any other known and unknown whether recorded or not recorded in books are proposed to be waived of fully. J. COMPLIANCE OF MANDATORY CONTENTS OF RESOLUTION PLAN UNDER THE CODE AND CIRP REGULATIONS: The Applicant has conducted a thorough compliance check of the Resolution Plan in terms of the Code as well as Regulations 38 and 39 of the Regulations and has submitted his Form H under Regulation 39 (4). It is submitted that the Plan is in compliance with the provisions of the Code and the Regulations. It is further submitted that the Resolution Applicant is not ineligible under Section 29A of the Code. K. PEFORMANCE SECURITY: The RA has deposited performance security amount of ₹ 3,00,00,000/- (Rupees Three Crores Only) with the State Bank of India as per the requirement under revised RFRP. Bank s confirmation letter dated 13.11.2020 is annexed with the Application. 12. The Applicant submits that the Resolution Plan meets the requirements of Section 30(2) of the Code in the following manner: a. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on letter dated 20.10.2020 from Buldana Urban Co. Op. Credit Society for loan amount of ₹ 17,00,00,000/- for the purpose of implementation of the Resolution Plan. 16. It is beneficial to refer to the observation of the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta Ors.:(2019) SCC OnLine SC 1478 as under: 67. A successful resolution Applicant cannot suddenly be faced with undecided claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution Applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution Applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution Applicant does on a fresh slate, as has been pointed out by us hereinabove. 17. In view of the above ruling of the Apex Court, the Resolution Applicant takes over the Corporate Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with law. The same needs to be approved. Hence ordered. ORDER i. The Application be and the same is allowed. The Resolution Plan submitted by the Consortium led by Onkar Sakhar Karkhana Private Limited annexed to the Application is hereby approved. It shall become effective from this date and shall form part of this order. It shall be binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is due, guarantors and other stakeholders involved in the Resolution Plan. ii. The approval of the Resolution Plan shall not be construed as waiver of any statutory obligations of the Corporate Debtor and shall be dealt by the appropriate Authorities in accordance with law. Any waiver sought in the Resolution Plan, shall be subject to approval by the Authorities concerned. iii. The Memorandum of Association (MoA) and Articles of Association (AoA) shall accordingly be amended and filed with the Registrar of Companies (RoC), concerned for information and record. The Resolution A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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