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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 ..... of section 30(2) of IBC, 2016, 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 Resolution Applicant or New Promoters. Application filed by the Resolution Professional for the approval of the Resolution Plan stands allowed. - MA/1433/2019 in CP/941/IB/2018 And MA/99/2020 in CP/941/IB/2018 - - - Dated:- 20-7-2020 - R. Varadharajan, Member (Judicial) And S. Vijayaraghavn, Member (Technical) Counsel for Applicant : Ms. Deepika Murali, Advocate Counsel for RP : Shri Aslam Ahmed, Advocate, Ms. Isha J. Kumar, Advocate, Shri Sumant Nayak, Advocate, For M/s. Desai Diwanji Counsel for RA : Shri Robin Singh Sirohi, Advocate. Counsel for COC : Ms. Akshaya, Advocate COMMON ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleted financial year or average of last 3 immediately preceding FYs. 3. Category C - Individual Investor / Consortium of individual Investors: Minimum consolidated net worth of INR 100 crores at sole or at the consortium level. Individual investor to include HUFs and family trusts. Net Worth of consortium shall be calculated as weighted average of individual member s Net Worth (value of negative Net Worth members shall be considered as Nil) basis their proposed participation in the consortium 4. Category D - Consortiums At least one of the members must hold at least 26% total equity participation in the consortium who shall be designated as the lead member. All other members would need to have a minimum stake of 10% each in the consortium. All the members of the consortium shall be jointly and severally responsible for compliance with the terms of the invitation for submission of EoI, the request for resolution plan and the resolution plan submitted by the consortium. Consortium of Body Corporates/NBFCs : TNW of consortium shall be calculated as weighted average of individual member s TNW (value of negative TNW members shall be considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of thirty-five (35) days (being the time lost before the present RP could be appointed) and a further eighteen (18) days (from the date of filing the application before the Tribunal till the date of its aforementioned order dated 30 April 20 19) from the CIRP. The Hon ble National Company Law Appellate Tribunal allowed the said appeal on 2 July 2019 and granted an exclusion of a total of fifty-three (53) days from the CIRP. 10. It is further submitted that the Applicant/RP did not have access to all relevant financial information of the Corporate Debtor, however, after furnishing the available information to the auditors, the RP obtained transaction audit report dated 22nd May, 2019 from one M K Aggarwal and Co. The said transaction audit report stated that no transactions had been carried out in relation to the Corporate Debtor as contemplated under Sections 43,45, 50 or 66 of the IBC, however, the Applicant filed MA/1084/2019 under Section 66(1) of the Code, 2016 seeking directions against Mr. K. Ganga Prasad, the erstwhile Managing Director of the Corporate Debtor and another application IIIA/1085/2019, seeking for condonation of delay of one hundred and forty-five (145) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in view of its failure to submit a revised resolution plan, even after being given multiple opportunities, the Applicant after discussion with the CoC, disqualified RPG as a prospective resolution applicant in its 12th CoC meeting dated 13.08.2019 and informed RPG of its disqualification vide an email dated 16.08.2019 and no response was received from RPG in relation to the same. However, it is averred that RPG had issued a frivolous legal notice dated 01.08.2019 to which the Applicant replied on 06.09.2019. 14. In view of the above, only one resolution applicant remained for the Corporate Debtor i.e. that of UVARC and was declared as the successful resolution applicant (hereinafter referred to as the successful RA/Resolution Applicant ). Pursuant to deliberation and negotiations between the successful RA, the Resolution Professional (the Applicant) and the CoC, after many revisions of the resolution plans, which was finally revised on 27.08.2019, submitted the same before the CoC for its consideration on 29.08.20 19. 15. Thereafter, the Applicant filed MA/926/20 19 before this Tribunal seeking extension of seven (7) days of the CIRP as available under amended Code (amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld expire on 15.11.2019. 20. The said application was listed before this Tribunal on 04.1 1.2019 wherein no orders were passed. However, this Tribunal observed that if the Applicant and the CoC deem fit they may proceed as per the Code. Accordingly, the successful RA submitted a resolution plan dated 06.11.2019 for the consideration by the CoC. Thereafter in the 16th CoC meeting held on 12.11.2019, the Resolution Professional placed the revised Resolution Plan before the CoC members for their approval. 21. It is significant to point out here that in the interim, the Applicant filed another application before this Tribunal, which was numbered as MA/1271/2019 seeking extension of fifteen (15) days of the CIRP as available under amended Code. This Tribunal on 19.11.20 19 extended the CIRP by another twenty (20) days from 15.11.2019 and consequently, the CIRP of the Corporate Debtor was to expire on 05.1 2.20 19. 22. Pursuant to the above, the Applicant as well as the CoC deliberated upon the Resolution Plan and having found it to be feasible and viable in accordance with Section 30(4) of the Code and Regulation 39(4) of the CIRP Regulations, approved the same with 67.97% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Bank of India Bengaluru Branch 1.24 Assented 26. The Resolution Applicant (A Consortium of UV Asset Reconstruction Company Limited (Lead Member)) and WL Structures Private Limited (Other Consortium Member), who is a third party and has submitted an affidavit pursuant to section 30(1) of the code conforming eligibility under Section 29A of IBC, 2016, to the Resolution Professional. 27. In the Resolution Plan the Resolution Applicant proposed to make payment towards the resolution Claims and dealt with the interest of all the Stakeholders in the following manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of ₹ 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 ₹ 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 ₹ 352 Crores (Indian Rupees Three Hundred and Fifty Two Crores only). Out of the said amount of ₹ 352 Crores (Indian Rupees Three Hundred and Fifty Two Crores only), it is proposed that the Lead Member shall pay ₹ 35 Crores (Indian Rupees Thirty Five Crores Only) ( Assignment Consideration ) for assignment of debt to extent of ₹ 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 ) by the Financial Creditors (as specified in Schedule - XI) in favour of the Lead Member. The said amount of ₹ 35 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ₹ 387.80 Crores ₹ 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atish Kumar Gupta Ors. in Civil Appeal No. 8766-67 of 2019 at para 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 ₹ 155 Crores and the Resolution Plan provides for an amount of ₹ 368.50 Crores payable to all the stakeholders (excluding ₹ 0.50 Crores of CIRP costs), wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor , it is for the Corporate Debtor to decide whether they will continue 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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