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TMI Blog2021 (6) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Resolution Applicant is eligible under section 240A of the Code and satisfies the relevant legal requirements. The Plan needs to be approved as provided under Section 31 of the Code. Application allowed. - MA No. 1057/MB/2018 in C.P. (IB) No. 1197/MB/2017 - - - Dated:- 19-5-2021 - Janab Mohammed Ajmal, Member (J) And V. Nallasenapathy, Member (T) For the Appellant : Devarajan Raman, PCS ORDER V. Nallasenapathy, Member (T) 1. This is an Application under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (the Code) by the Resolution Professional of the Corporate Debtor seeking approval of the Resolution Plan submitted by the Resolution Applicant viz. Mr. Gururaj S R, who is the erstwhile Director of the Corporate Debtor. 2. The facts leading to the Application are as under. a) Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor was initiated by this Bench by an order dated 16.08.2017 upon admission of a Petition under Section 10 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. CIRP costs: Full payment of CIRP costs of INR 22.44 Lakhs as on 01.03.2021 is proposed to be paid. b. Financial Creditors: c. Employees Dues: Full payment towards employees' dues of INR 7.75 Lakhs outstanding is proposed to be paid within 1 month from this date. d. Workmen Dues: Full payment towards workmen's dues of INR 1.25 Lakhs outstanding as on 31st March 2017 is proposed to be paid within 1 month from this date. e. Liquidation value: The liquidation value of the Corporate Debtor arrived at by the RP is INR 158.89 Lakhs. f. Operational Creditors (OCs): Though the liquidation value due to the Operational Creditors is Nil, the Resolution Plan envisages payment of INR 2.94 Lakhs to the OCs other than workmen and employees. g. Statutory dues: No payment is proposed towards any statutory dues. d) REDUCTION OF SHARE CAPITAL: The Resolution Plan proposes to de-rate the face value of equity form INR 100 per share to INR 10 per share. With this the paid-up share capital of the Corporate Debtor would get reduced from INR 1 Crore to INR 10 Lakhs. e) MANAGEMENT OF THE CORPORATE DEBTOR: The operations of the Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the management of the affairs of the Corporate Debtor after approval of the Resolution Plan as per clause 8 thereof [Section 30(2)(c)]. d. Provides for the implementation and supervision of the Resolution Plan as per clause 8 and 15 thereof [Section 30(2)(d)]. e. As per clause 1(i) of the note submitted by RP to the CoC (Annexure I to the Application), the Resolution Plan does not contravene any provisions of the law for the time being in force [Section 30(2)(e)]. 5. The Resolution Plan is in compliance of Regulation 38 of the Regulations in terms of Section 30(2)(f) of the Code as under: a. Provides for payment to Operational Creditors in priority over Financial Creditors (Regulation 38(1)(a)). b. Provides for payment due to the dissenting Financial Creditors in priority over assenting Financial Creditors (Regulation 38(1)(b)). c. Declaration by the Resolution Applicant that the Resolution Plan has considered the interest of all the stakeholders of the Corporate Debtor, as per clause 14 thereof keeping in view the objectives of the Code (Regulation 38(1A)) Resolution Plan. d. Declaration by the Resolution Applicant as per clause 2.9(iii) thereof th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 till date. b. The SRA has sought directions with regard to Employee State Insurance, to accept the payment of principal dues outstanding as on date of restart of operations, that is INR 0.88 Lakhs due up to July, 2018 within three months from resumption of operations without interest. Further, to waive penalties, damages etc. on the liability of the company as on the date of sanction of the Resolution Plan. Further the SRA has sought directions with regard to Employee Provident Fund, to waive damages and interest, and also to accept in full settlement the payment of only the principal dues of Provident Fund due of INR 1.21 Lakh to be paid within three months from the date of approval of this Resolution Plan. c. The SRA has sought reliefs from the Central Government, to exempt the Company from penal provisions of Income Tax Act, Companies Act, Central Excise Tax Act, Service Tax Act, Central Sales Tax and any other law. Further, to provide any other relief allowable to the sick company as per the policy of the Central Government for the rehabilitation. d. The SRA has sought reliefs from Central Board of Direct Taxes, to consider exemption/grant of relief to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 9. In view of the above ruling of the Apex Court, the Resolution Applicant takes over the Corporate Debtor with all its assets and liabilities as specified in the Resolution Plan subject to orders passed herein. As already indicated the Resolution Plan has been approved by the CoC in its meeting held on 10.09.2018 with 97.98% votes. 10. In K. Sashidhar v. Indian Overseas Bank Others: (2019) 12 SCC 150) the Hon'ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees, 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 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 Applicant, for effective implementation of the Plan, shall obtain all necessary approvals, under any law for the time being in force, within such period as may be prescribed. iii. As far as the permits held by the Corporate Debtor and the rights and benefits accrued therein, the Corporate Debtor (under the new Management) needs to approach the authorities concerned for renewal and that the same may have to be considered by them favourably, subject to relevant Law and Rules, so that the implementation of Plan becomes smooth and free of hassles. iv. Henceforth, no erstwhile creditors of the Corporate Debtor can claim anything other than the liabilities referred to in Paras supra. v. The mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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