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TMI Blog2020 (7) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... n short, "Regulation") seeking the approval of the Resolution Plan submitted by the successful Resolution Applicant viz., UV Asset Reconstruction Company Limited and WL Structures Private Limited. 2. The Learned Counsel for the Resolution Professional submitted that one M/s. Reliance Capital Limited, in the capacity as a Financial Creditor has filed an Application under Section 7 of IBC, 2016, against the Corporate Debtor viz. GVR Infra Projects Limited and this Authority vide order dated 15.10.2018 admitted the said Application and initiated Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor by appointing one Mr. Arumugam Arumugam as the Interim Resolution Professional (IRP). 3. The First Committee of Creditors (CoC) meeting, it is seen was held on 16.11.2018 wherein was it decided that the IRP was to be replaced by an RP and thereafter the COC through the lead bank i.e. State Bank of India had filed an application under section 22(3)(b) of IBC, 2016, and this Authority vide order dated 21.12.2018 appointed the Applicant as the Resolution Professional (RP) of the Corporate Debtor. 4. The Learned Counsel for the Resolution Professional submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019. However, as there was a possibility to receive few more EOIs, it is seen that the RP had suggested to extend the last date for submission of EOIs in relation to the CIRP and accordingly the last date was extended till 23.02.2019, to which suggestion, the CoC has also accorded its consent and accordingly the RP had published a corrigendum to Form-G dated 08.02.2019 in the Financial Express (Circulated in English). 6. Further, at the Fourth meeting of COC held on 05.03.2019, the COC was apprised that as on the cut-off date i.e. 23.02.2019, as many as Nine (9) EOIs had been received and a provisional list of prospective RAs was published same day. It is pertinent to note that RPG Asset Management Pvt. Ltd (in short "RPG") had submitted its EOI on 22.02.2019 and UV Asset Reconstruction Company Limited (in short "UVARC") had submitted its EOI on 25.01.2019. 7. Thereafter, a total five (5) RAs has confirmed their participation in the process by submitting their confidentiality undertaking to access Virtual Data Room for the purpose of scrutinizing the documents of the Corporate Debtor and undertaking a due diligence. 8. It is submitted that the Resolution Professional was not ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP and to cooperate with her in collection of information and management of the Corporate Debtor; this Tribunal vide order dated 17th July, 2019 has disposed the said application by directing the employee to cooperate with the Applicant. 12. Pursuant to the Request for Resolution Plan (In short 'RFRP'), two entities submitted their respective resolution plans, namely, (i) RPG Asset Management Private Limited (hereinafter referred to as "RPG") having its registered office at 2, 1st Main road, Shashtri Nagar, Adyar, Chennai 600020 on 30 July 2019 and (ii) a consortium of UV Asset Reconstruction Company Limited, (hereinafter referred to as the "Lead Member"), a company incorporated under the provisions of Companies Act, 1956 and having its registered office at 704, 7th Floor, Deepali Building, 92 Nehru Place, New Delhi and WL Structures Private Limited, a company incorporated under the provisions of Companies Act, 2013 and having its registered office at No. 33, 3rd Floor, Rutland Towers, Shafee Mohammed Road, Chennai, Tamil Nadu 600006 on 19 July 2019 (hereinafter referred to as "UVARC"). 13. That upon opening all the received bids together on 31 July 2019 at the meeting of the CoC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said plan could not be approved by the CoC as the CoC did not find the same as feasible and viable. That a majority of the CoC, on 09.09.2019, voted against the said resolution plan (88.16% against and 9.94% for) and consequently on 10.09.20 19, the Applicant filed an application (numbered as SR/1077/2019) seeking an order for liquidation of the Corporate Debtor as a going concern as it was in the best interest of the Corporate Debtor. This Tribunal heard the parties on 19.11.2019 and pursuant thereto, the said application was withdrawn by the Applicant on the said date. 17. It is submitted that the RP and the CoC have taken adequate care to ensure that fair and equal opportunities were given to all resolution applicants [in this case there were only two (2)] to submit their respective resolution plans for the Corporate Debtor. The two (2) resolution applicants were also requested to be available for discussions with the CoC at various occasions at the venue of the meeting of the CoC. However, despite the best efforts of the RP and CoC, the sole resolution applicant i.e. UVARC was only present. 18. Thereafter, the successful RA addressed an email to the Applicant as well to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce security required under sub-regulation (4A) of regulation 36B. 25. It is evident from Form-H that the Resolution Applicant has submitted his revised Resolution plan before the Committee of Creditors on 27.11.20 19 and in the 16th CoC meeting the Committee of Creditors have approved the Resolution Plan with the following distribution of voting share; S. No. Name of Creditor Voting Share (%) Voting for Resolution Plan 1 State Bank of India Chennai Bench 30.10 Assented 2 Punjab National Bank 17.40 Dissented 3 Bank of Baroda Erstwhile Vijaya Bank 11.12 Assented 4 I DB I Bank 11.15 Assented 5 Axis Bank 2.70 Dissented 6 Federal Bank 1.16 Dissented 7 ICICI Bank 1.14 Assented 8 Lakshmi Villas Bank 1.10 Dissented 9 Canara Bank 3.28 Assented 10 Bank of India 2.68 11 Allahabad Bank 0.74 Assented 12 Tamilnadu Mercantile Bank Limited 189 Abstained 13 Bank of Maharashra 5.09 Dissented 14 Reliance Capital Limited 0.93 Assented 15 Corporation Bank 1.93 Assented 16 IIFCL Mutual Fund (IDF) 3.94 Assented 17 Ashok a Buildcon Ltd. 1.27 Assented 18 Sunstar Hotels and Estates Private Limited 1.13 Assented 19 State B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees of the Corporate Debtor as against the claim of Rs. 20.34 Crores, will be paid within 60 days from the Effective Date. 31. In relation to distribution of Rs. 352 Crores to the Financial Creditors as contemplated under the resolution plan, the following position emerges upon a combined reading of the Resolution plan along with documents annexed thereunder with this application which is as follows:- Executive summary para (2) of B and Schedule XI of the Resolution Plan: i) The total admitted claims of the Financial Creditors of Rs. 2271.08 Crores (Indian Rupees Two Thousand two Hundred and Seventy One Crores and Eight Lacs only) are proposed to be settled for an amount of Rs. 352 Crores (Indian Rupees Three Hundred and Fifty Two Crores only). Out of the said amount of Rs. 352 Crores (Indian Rupees Three Hundred and Fifty Two Crores only), it is proposed that the Lead Member shall pay Rs. 35 Crores (Indian Rupees Thirty Five Crores Only) ("Assignment Consideration") for assignment of debt to extent of Rs. 250 Crores (Indian Rupees Two Hundred and Fifty Crores Only) along with all the rights, and security interest in the assets collateralized by the sureties ("Assigned Debt" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and Thirty Five Crores Only) shall be returned to the respective financial creditors in the manner provided under this Resolution Plan. 33. In relation to utilization of the Upfront Payment Out of the total Bid Amount, the Resolution Applicant shall make an Upfront Payment of Rs. 31.5 Crores (Indian Rupees Thirty One Crores and Fifty Lacs Only) out of the internal accruals of the Resolution Applicant, which shall be infused, by way of equity share capital and debt infusion, in to a Special Purpose Vehicle (In short "SPV") wholly owned and controlled by the Resolution Applicant, which shall be amalgamated with and into the Corporate Debtor on and from the date on which amount of Upfront Payment is infused in the SPV. 34. The Resolution Professional has filed Form-H compliance and from that the Fair Value and the Liquidation value is found to be as follows; Fair Value Liquidation Value Rs. 387.80 Crores Rs. 155 Crores 35. From the averments made in the Application as well as in Form-H as filed by the Resolution Professional in relation to the procedural aspects, the same seems to have been duly complied with for which the Resolution Professional has issued a Certificate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 42 has held as follows; 42, .........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. Sashidhar (supra). 38. This Authority has in the light of the above noted judgements and thereby giving credence to the commercial decision of the COC in approving the Resolution Plan has perused the Resolution Plan in light of the same. Further, it is seen that the Resolution Applicant has sought for Relief and Concessions in the Resolution Plan. The Liquidation Value of the Corporate Debtor as per Form H filed by the Resolution Professional is arrived at Rs. 155 Crores and the Resolution Plan provides for an amount of Rs. 368.50 Crores payable to all the stakeholders (excluding Rs. 0.50 Crores of CIRP costs), which is much more than the Liquidation value. 39. The Resolution Applicant has sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue with such right over the "Subsidiaries" or "Associate Companies" or "Joint Ventures" and others. For such right, the Adjudicating Authority is not required to make any such suggestion nor can lay down any condition. 42. As to the Monitoring Committee', is concerned, as stated in the Resolution Plan, the Monitoring Committee shall consist of the following members; (a) Two Representatives of the Financial Creditor's (b) A Monitoring Agent; i.e. the RP viz. Vandana Garg 43. Since prima facie, we do not find inconsistency in relation to the Resolution plan vis-a-vis the provisions of section 30(2) of IBC, 2016 in light of the discussions above, the Resolution Plan is hereby approved and it shall be binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the "Moratorium" imposed under section 14 of IBC, 2016 at the time of initiation of CIRP shall not have any effect henceforth. The Resolution Professional shall submit the records collected during the commencement of the Proceedings to the Insolvency & Bankruptcy Board of India for their record and also return thereafter to the Resolutio ..... 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