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TMI Blog2020 (1) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... ising objection against a clause in the scheme approved by the remaining creditor bankers extinguishing the right of the dissenting financial creditor to proceed against the personal guarantee given by the promoter-director namely, Dr. KM. Cherian on the ground that the right of this creditor against the personal guarantee given by the promoter-director on behalf of the corporate debtor is not bound by the scheme covered under section 230 of the Companies Act, 2013. 2. As to second application filed by the dissenting financial creditor, this point being covered under section 230 of the Companies Act, 2013, we are of the view that it is suffice to pass a common order dealing with both the issues, therefore we hereby pass common order on both the applications pending before this Bench. 3. Unless the objection issue is decided, it may not be possible to decide about the approval of the scheme, we first take up the objection raised by the dissenting financial creditor namely having 2.43 per cent. of the secured debt payable by the corporate debtor. 4. For the facts being admitted stating that the scheme has been approved by the majority of the financial creditors during liquidation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts member, another is a compromise between a company and its creditors here it is a compromise scheme between the corporate debtor company and its creditors, which is permissible under section 230(1) of the Companies Act, 2013. 8. Though we see this point is not directly relevant to any strategic debt restructuring (SDR) arrangement or corporate debt restructuring (CDR) arrangement introduced by the Reserve Bank of India, it has not been said anywhere that the creditor is entitled to proceed against the guarantor beyond the restructuring that has been arranged under SDR or CDR that was introduced by the Reserve Bank of India. 9. As to SDR or CDR mechanism, whenever such mechanism has failed, the original debt agreement will automatically come into force so as to proceed against the debtor with full rights as earlier agreed between them. For this arrangement being akin to SDR/CDR mechanism, the same principle could be applied in this case. Scheme is approved under section 230 of the Code. If at all scheme has failed to be implemented, then as stated under section 33 of the Insolvency and Bankruptcy Code, 2016, which is akin to present situation, company could be sent into liquidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en assuming that this creditor can proceed against the guarantor under the Code, for the sake of assumption, such jurisdiction cannot be borrowed to exercise jurisdiction under section 230 of the Act, because it is a compromise on the volition of the creditors. 14. For the applicant counsel has raised another point saying that though outstanding debt is less than 5 per cent. he can raise objection before this Bench because that 5 per cent. objection is with respect to voting in the creditors' meeting. 15. As to this contention, in any voting structure, no person could be stopped from voting whether it is dissenting or assenting, it is up to the wish of the person conferred with voting as to how he exercises it. If at all we take it as a right of objection limited to the meeting and not permitted to raise objection before the court of law, then there would be no sense in bringing a proviso to sub-section (4) of section 230. As to voting, nobody can stop dissenting financial creditor from voting in the meetings held, but as to when approval in the meeting goes against it, then such creditor/ creditors can raise an objection as set out in the proviso to section 230(4) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch being the situation, now we cannot go into micro level sub-division of the class of secured financial creditors into further sub classes so as to show this dissenting secured financial creditor as a separate class on the ground it has security only on movable assets of the corporate debtor or against its own stand in the claim application as secured financial creditor. So, therefore we do not find any merit in the argument saying that this dissenting financial creditor has to be treated as class to itself on the ground that it does not have immovable property of the corporate debtor as security. But it is a fact that this creditor is a secured creditor with respect to the movable assets of the corporate debtor. This sub-division of class cannot be taken to the extent of saying that whenever a slight difference is seen that has to be shown as a separate class. For that matter no two things are similar in this world. Since, under the Companies Act, there being two class of creditors one is secured and another is unsecured and for this creditor is admittedly falling under class of secured creditors, this Bench is not conferred with any further right to create a class within the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in favour by overwhelming majority of 96.10 per cent. by the unsecured creditors (40 persons), dissenting 3.81 per cent. voting of only S. M. Ariff Associates. Therefore, the revised/ amended resolution plan has complied with section 230(6) of the Companies Act, 2013 having more than three-fourths of creditors as provided therein. 24. That the applicant has complied with the mandatory requirement of filing the certificate that the accounting treatment contained in the revised/ amended resolution plan, is in conformity with the accounting standards prescribed under section 133 of the Companies Act, 2013. 25. A synopsis of the financial proposal of the resolution applicant is provided as below : Particulars INR crores Financial outlay Upfront payment toward CIRP cost (advance estimates) 0.79 Payment claims and dues towards statutory dues (same as explained in resolution plan) 1.21 Payment claims and dues of various creditors other than financial creditors 3.00 Tranche-I (payment to be made within 60 days of effective date) 5.00 Upfront payment towards claims of financial creditors 30.00 Tranche-II (payment to be made within 90 days of effective date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor to continue as participant in the monitoring committee provided under the plan. If at all any future exemptions have been asked in the resolution plan, they are only permitted to the extent that is covered to the period of pre-admission and as to other concessions sought to the post-admission period, they have not been approved by this Bench with a clarification whatever exemption that is permitted under law the parties are always entitled to avail the same. Therefore we have not made any separate observation with regard to the exemptions sought for the post-admission period. 28. As to liquidator remuneration is concerned, for the resolution applicant has made categorical statement that they have already agreed to pay Rs. 2.5 lakhs per month from the date of appointment of the liquidator and the same remuneration will continue until he has been discharged from the duties as member of monitoring committee, it is further made clear that if this plan for any reason failed, the creditors will resume their rights as before, including the dissenting financial creditor against the assets of the corporate debtor as well as the personal guarantees with full rights whichever already con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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