9911796707
TMI Blog2021 (3) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 30 (4) of the Code is approved and the resolution plan so approved shall be binding on the corporate debtor and 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, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. Resolution plan approved - moratorium shall cease to have effect. - CA No.389/2019 In CP (IB) No. 102/Chd/CHD/2018 - - - Dated:- 12-1-2021 - HON BLE MR. AJAY KUMAR VATSAVAYI, MEMBER (JUDICIAL) AND HON BLE MR. RAGHU NAYYAR, MEMBER (TECHNICAL) For the Resolution Professional : Mr. Sumesh Dhawan, Advocate, Ms. Vatsala Kak, Advocate, Mr. Arora Vishwas Kumar, Advocate For the Resolution Applicant : Mr. Anand Chhibbar, Senior Advocate, Mr. Amitabh Tewari, Advocate For the Assenting Financial Creditor (JMFARC Ltd.) : Mr. Abhishek Anand, Advocate, Mr. Viren Sharma, Advocate For the Dissenting Financial Creditors : Mr. Rakesh Gupta, Advocate For the Intervenor : Mr. Anirudh, Advocate, Mr. Tejas Patel, Advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Central Bank of India 4 Bank of Baroda 5 Export-Import Bank of India 6 Canara Bank 7 Small Industries Development Bank of India 8 PEC Limited 4. It is submitted that the applicant as RP also appointed two registered valuers to determine the liquidation value of the corporate debtor in accordance with Regulation 35 of the Regulations and on the basis of their reports, the average fair value and liquidation value as assessed as per Regulation 35 are ₹209 crs and ₹110 crs respectively/-. Copies of Valuation Reports are annexed as Annexure-19. 5. It is stated that in the second meeting of CoC held on 03.11.2018, the CoC resolved and approved the Eligibility Criteria for resolution applicants and also gave approval for publication of Form G for inviting Expression of Interest (EOI) from prospective resolution applicants. 6. It is stated that the RP made a Public Announcement for invitation of EOI from prospective resolution ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the CIRP time period by a further period of 90 days and the same was allowed vide order dated 22.02.2019. A copy of the order is at Annexure- 16 of the paper book. 12. In the fifth meeting of CoC dated 07.03.2019, the members of CoC themselves undertook the task of evaluation of resolution plan and therefore they did not appoint any bid evaluator. Further, it is stated that after the extension of last date for submission of resolution plan, the resolution plan was received from only one resolution applicant namely Akums Drugs Pharmaceuticals Ltd. on 13.03.2019 i.e. the Bid Due Date which was opened in the presence of the CoC in its 6th meeting held on 14.03.2019 and broad parameters (including financial bid) was disclosed to the members of CoC. The said resolution plan was also uploaded on the Virtual Data Room. 13. The resolution plan was further analysed in the 7th, 8th 9th meeting of the CoCs during which the resolution applicant submitted the amended resolution plan dated 13.03.2019 as restated on 07.05.2019 along with addendum dt.08.05.2019 dt.16.05.2019 to the CoC for consideration. The CoC in its tenth meeting held on 18.05.2019, after detailed discussion de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed above, the CIRP proceedings were initiated by order dated 23.08.2018. The present application is filed for the approval of resolution plan by M/s. Akums Drugs Pharmaceuticals Ltd. The approval has been sought under the provisions of Section 31 (1) of the Code. 20. We may first of all state that after receipt, verification and collation of claims as discussed above, the IRP constituted the CoC as per the provisions of Section 21 of the Code. The details of the financial creditor, the distribution of voting share among them and the position of voting for the resolution plan is as under (para no.5 of Form H (Diary No.232/4 dated 17.09.2020). Sl. No. Name of Creditor Voting Share (%) Voting for Resolution Plan (Voted for/ Dissented/Abstained) 1 JM Financial Asset Reconstruction Company Limited 71.67 For 2 Union Bank of India 7.16 Against 3 Central Bank of India 6.95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - 3 Operational Creditors (a) Related Party of Corporate Debtor - - - - (b) Other than (a) above: (i) Government 45,044 32,394 375 1.2% (ii)Workmen Employees 427 379 376 99.1% (iii) Other Operational Creditors 9071 4800 375 7.8% Total [(a) + (b)] 54541 37573 1126 3.0% 4 Other debts and dues - - - - - Grand Total 206099 189131 11495 6.1% Further, the applicant has also offered Equity s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) provides for the management of the affairs of the corporate debtor? Part II Cl. 4 Sub. Cl. 4.1 at Pg. 67 Yes (e) provides for the implementation and supervision of the resolution plan? Part II Cl. 4 Sub. 4.2at Pg. 69 Yes (f) contravenes any of the provisions of the law for the time being in force? Part II Cl. 6 at Pg.69 Section 30(4) Whether the Resolution Plan (a) is feasible and viable, according to the CoC? PART II, Cl. 10 at Pg, 70 Yes (b) has been approved by the CoC with 66% voting share? Yes Voting Result on the Resolution Plan at Pg. 135 Section 31(1) Whether the Resolution Plan has provisions for its effective implementation plan, according to the CoC? Part II Clause 4 Sub Clause 4.2 at Pg. 69 Clause 8 at Pg. 70 Yes Regulation 35A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the resolution plan demonstrates that (a) it addresses the cause of default? (b) it is feasible and viable? (c) it has provisions for its effective implementation? (d) it has provisions for approvals required and the timeline for the same? (e) the resolution applicant has the capability to implement the resolution plan? Part I, Cl. 1-6 at Pg. 27 Part II, Cl. 3 at Pg. 67, Cl. 4.2 at Pg. 69 and Cl. 8 at Pg. 70 Yes 39(2) Whether the RP has filed applications in respect of transactions observed, found or determined by him? CA No. 74/19 filed on 11.01.2019 Yes Regulation 39(4) Provide details of performance security received, as referred to in sub-regulation (4A) of regulation 36B. Bank: State Bank of India, Industrial Finance Branch, New Delhi Date:21.05.2019 Amount:₹ 25,00,00,000/- (Rupees TwentyFive Crores) at Pg. 122 Yes 23. The approval of the resolution plan has been sought under Section 31 (1) of the Code, reading as follows: - (1) If the Adjudicating Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. Explanation 1.-For the removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors. Explanation 2.-For the purposes of this clause, it is hereby declared that on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, the provisions of this clause shall also apply to the corporate insolvency resolution process of a corporate debtor- (i) where a resolution plan has not been approved or rejected by the Adjudicating Authority; (ii) where an appeal has been preferred under section 61 or section 62 or such an appeal is not time barred under any provision of law for the time being in force; or (iii) where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.17.09.2020 and Part III Clause 5 6) states that the operational creditors shall be paid in full and final satisfaction of their claims which includes payment of all the statutory dues and claims of governmental authorities of an amount upto ₹3,75,000/-. Further, the plan provides for an amount of ₹3,75,60,159/- to be paid towards full and final settlement of claims of workmen and employees which shall be paid on the first payment date. Apart from these, an amount of ₹ 3,75,000/- is also proposed to be paid upfront to other operational creditors under the plan. It is stated in Form H that the average liquidation value is ₹110 crores. On behalf of the dissenting financial creditors, it was submitted that the plan is not complying the requirements of Section 30(2)(b) read with Regulation 38(1(b), as amended. However, on the other hand, the Resolution Professional and the Resolution Applicant submitted that the plan read with the addendums was approved by the COC on 18.05.2019 and since Section 30(2)(b) was amended on 16.08.2019 and that the corresponding Regulation 38(1)(b) was amended w.e.f. 28.11.2019, the said amendments have no application and hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e): In Part II, Clause 4 of the resolution plan (Pg. 67 of Dy. No. 232/4), it is stated that pursuant to the approval of the plan, a Monitoring Committee comprising of 2 representatives the CoC and 2 representatives of the Resolution Applicant shall be constituted which shall have powers of the board of directors of the company vested in it. Further, it is stated that the chairman of the monitoring committee will be representative of the resolution applicant and the monitoring committee may appoint a professional agency acceptable as Managing Agency for supervision and management of the CD until the closing date. On and from the effective date, the resolution applicant and its nominees shall be the majority shareholder of the corporate debtor and the monitoring committee and the managing agency shall cease to exist. Until then the resolution applicant and the managing agency shall jointly supervise the implementation of the plan. The monitoring committee will consist of the following members (Diary No.5570 dated 14.010.2019): S.No. Representatives of COC Representatives of the Resolution Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill not have any claim over the same. The statement of the learned Senior Counsel for the resolution applicant was taken on record. Also JMFARC Limited-financial creditor with 71.6% voting share in the CoC submitted that they have no objection, if the resolution plan is approved by this Tribunal. 31. In compliance of order dt.14.11.2019, the RP filed compliance affidavit (Dy. No.6507 dt.21.11.2019) stating that the resolution plan is in compliance with all the provisions of section 30(2) and COC has approved the said plan by applying its commercial wisdom after thorough examination. Reliance is placed on the decision held by the Hon ble Apex court in the matter of Essar Steel India Ltd. Vs. Satish Kumar Gupta Ors. 32. Further, the RP and the Resolution Applicant filed their separate affidavits (Dy. No 1590 1591 dt.26.02.2020) in compliance of order dt.06.02.2020 stating therein that the conditions mentioned under clause 11 of Part 1 of the resolution plan shall no longer be treated as Conditions Precedent and the resolution applicant shall approach the relevant statutory and other authorities for grant of approval of consent, if required under clause 11 of Part I of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said order). 34. SIDBI in its reply (Dy.251/9 dt.17.11.2020) has submitted that it had filed a detailed complaint with IBBI under regulation 3(3) of Grievance and Complaint Handling Procedure Regulation, 2017 and also before the Institute of Insolvency Professionals of ICAI (IIIPI) under section 204 (f) of the code regarding the irregularities committed by the RP and his associates. Copies of same are attached as Annexure R-1 R-2 resp. Central Bank of India in its reply has submitted that it being a minority shareholder could not object to the CIR proceedings undertaken by the RP as per the direction of JMFARCL, however CBI adopts the same reply as that of SIDBI (Dy. No.1097/2 dt.9.11.2020). 35. As regards the amendment in Section 30(2)(b) made by Act No.26 of 2019 w.e.f. 06.08.2019, the plan provides amount for the treatment with regard to dissenting financial creditors which had been discussed in para no 27 (supra) and therefore, the provision in this case has been complied with and that as regards operational creditors, the provision is made for ₹3,75,60,159 towards claims of the Workmen and Employees of the Corporate Debtor and ₹3,75,00,000 separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code are satisfied in the present case. In para No.4 of Form H (supra) the RP has certified that the resolution plan complies with all the provisions of the Code and Regulations and does not contravene any of the provisions of the law for the time being in force. The RP has also certified that the resolution applicant namely Akums Drugs Pharmaceuticals Ltd. has submitted affidavit pursuant to Section 30(1) of the Code confirming its eligibility under Section 29A of the Code to submit the resolution plan and the contents of the said affidavit are in order. The RP has submitted that the resolution plan has been approved by the CoC with 71.67% voting share in accordance with the provisions of the Code and CIRP Regulations made thereunder and after considering the feasibility and viability and other requirements specified by the CIRP Regulations. 41. In view of the above discussion, the resolution plan submitted by M/s. Akums Drugs Pharmaceuticals Ltd. as approved by the CoC under Section 30 (4) of the Code is approved and the resolution plan so approved shall be binding on the corporate debtor and its employees, members, creditors including the Central Government, any State G ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
