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TMI Blog2020 (6) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... es commercial logic for issuing 24% of equity to Financial Creditor as passing on the value garnered by the companies during continuous operations of five years. However, we are afraid that the Resolution Applicant may generate very negligible amount from actual business operations for three years as stated above. Therefore, this logic also appears to be flawed. Apparent contradictions in the Resolution Plan - HELD THAT:- The plan does not appear to a Resolution plan but appears to be a winding up, liquidation plan while just retaining a small portion of the business operations of the corporate applicants. In K. Sashidhar v Indian Overseas Bank others, [ 2019 (2) TMI 1043 - SUPREME COURT] , decided by Hon ble Supreme Court, the Hon'ble Supreme Court examined the situations arising in terms of section 31 of the IBC and held that the legislature has not endowed the adjudicating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the commercial decision of CoC. Approvals from regulatory authorities - HELD THAT:- Since the corporate applicants are licencees of spectrum by DoT, approval of DoT for Spectrum Transaction and AL Fibre and Business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the three corporate applicants, the resolution plans are in pari materia. Therefore, all three IAs are being disposed of by means of a single order. 2. The journey of the Corporate Insolvency Resolution Process (CIRP) 2.1. Applications by the corporate applicants and orders thereon 2.1.1. Aircel Limited filed an application under section 10 of the IBC read with rule 7 of the Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016, before this Adjudicating Authority. The same was numbered as CP (IB) No.298/2018. Similar applications were filed by Dishnet Wireless Limited, which was numbered as CP No.302/2018, and by Aircel Cellular Limited, which was numbered as CP No.300/2018. All three application were filed on the same day, i.e., 28.02.2018. After ascertaining that the Corporate Applicant fulfilled all the requisite conditions for admission, the company petition bearing CP (IB) No.298/2018 was admitted vide detailed order dated 12.03.2018, At pages 28-41 of IA 1864/2019 (Aircel Limited) while CP (IB) Nos.300/2018 and CP (IB) No.302/2018 were both admitted on 19.03.2018. At pages 38-51 of IA 1863/2019 (Dishnet Wireless Limited) and pp.28-41 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dic Investment Bank 2.80 9. Punjab National Bank 15.10 10. Standard Chartered Bank 1.70 11. State Bank of India 36.60 12. Syndicate Bank 2.10 Total 100.00 2.3.2. The first meeting of the CoC was held on 11.04.2018, at which the IRP was confirmed as the Resolution Professional (RP). Para 6 at page 4 of IA 1864/2019 Information Memorandum as required under section 29 of the IBC and regulation 36 of the Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 was submitted to the CoC on 01.05.2018 after receiving confidentiality undertakings from each member of the CoC. 2.3.3. The Department of Telecommunications (DoT), Govt of India, has also been invited and has been attending meetings of the CoC from the third meeting held on 06.06.2018 and thereafter. The RP has confirmed that DoT has not raised any reservation as regards claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir views on whether the plans received after the last date should be considered. At the meeting, all the CoC members except GTL Infrastructure Limited resolved to consider the plans received. GTL Infrastructure Limited abstained from voting. RP has stated that GTL Infrastructure Limited has since been classified as Operational Creditor. 2.7.3. Eight Capital withdrew its Resolution Plan after the first round of discussions, in which various concerns were raised on the compliance of the Resolution Plan that it had submitted, with the provisions of the IBC and the regulations framed thereunder. Para 17 at page 7 of IA 1864/2019 That left only one Resolution Applicant (RA), viz., UVARC, in the field. 2.8. UVARC s Resolution Plan consideration by CoC 2.8.1. The RP, along with his advisors, evaluated UVARC s plan. He also obtained written clarifications on several aspects. The matter was also discussed at various meetings of the CoC held on 02.01.2019, 07.01.2019, 08.01.2019, 11.01.2019, 14.01.2019, 14.02.2019. Para 20 at pages 4-5 of IA 1864/2019 After concluding that UVARC s Resolution Plan conformed to the law, the RP presented the plan to the CoC for consideration an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e., from 03.10.2018 to 15.10.2018, shall also be excluded from the CIRP period. 3. Corporate history of the Resolution Applicant (RA) 3.1.1. Before we come to the Resolution Plan itself, we may notice the corporate history of the RA. 3.1.2. The common Resolution Applicant, viz., UV Asset Reconstruction Company Limited ( UVARC or RA for short), is an unlisted public company limited by shares. It was incorporated on 23.08.2007 under the Companies Act, 1956, with the Registrar of Companies (RoC), Delhi, with Corporate Identity Number (CIN) U74900DL2007PLC167329. 3.1.3. Its registered office is at No.704, Deepali Building (7th Floor), No.92, Nehru Place, New Delhi 110 019. 3.1.4. UVARC s authorised capital is ₹50,00,00,000/- (Rupees fifty crore only) and its issued, subscribed and paid-up share capital is ₹42,02,50,000/- (Rupees forty-two crore two lakh and fifty thousand only). 3.1.5. As per Register of Charges maintained on the Ministry of Corporate Affairs (MCA) web portal, UVARC has a subsisting charge on its book debts to the tune of ₹1,00,00,00,000/- (Rupees one hundred crore only). 3.1.6. UVARC is an ACTIVE-compliant company, with ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icants in the discharge of their official duties, while remaining on the payroll of any one of the corporate applicants. (6) The financial creditors of the corporate applicants have acknowledged the interlinkage between the three corporate applicants even in the past, as may be seen from the fact that most of them have extended facilities to the corporate applicants as co-obligors under common documentation. Annexure 2A in the case of Aircel Limited Annexure 2B in the case of Dishnet Wireless Limited Annexure 2C in respect of Aircel Cellular Limited. (7) There is also technical interdependence of each of the corporate applicants on the other two. Post CIRP, the IT infrastructure such CRM, SAP, billing platform, Email server etc. will be commonly used across the three companies to reduce cost and bring synergies in operations. The resolution applicant will render service under the brand name of Aircel already established, since it enjoys easy brand recall amongst the clientele. (8) The asset monetisation strategy in respect of all the three corporate applicants is also common, except for the fact that the assets will be monetised in the respective corporate appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) - Effect on Corporate Debtor and Unique Situation of Corporate Debtor). (e) To revive the 14,500 km of optical fibre network would require substantial capital expenditure and operational expenditure. The value of use appears to be much lesser than value of sale (Page no.47-Clause 4.1.2(d)-Effect on Corporate Debtor and Unique Situation of Corporate Debtor). 4.3. Resolution Strategy 4.3.1. The Resolution strategy is to take over the corporate applicants and rebuild a low capex business on the strength of the brand value of Aircel by utilising some infrastructure and at the same time monetising assets where sale value is higher than value of use (Page no. 47 - Clause 4.2.1 - Resolution Strategy). 4.3.2. The identified businesses which the RA finds feasible to generate revenue are bulk SMS, data centre and leasing of towers. This is expected to generate a revenue of sixty-nine crore rupees in the first year, ninety-six crore rupees in the second year and one hundred and twenty-five crore rupees in the third year (Page nos. 47 48 - Clause 4.2.2 - Resolution Strategy) . 4.3.3. The existing employees in relation to these three businesses will be retained and a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve years from the issue of ZOCDs or any other longer period as decided by the Reconstituted Monitoring Committee. Any ZOCDs that are not redeemed because of unavailability or insufficiency of the aforesaid funds received within the aforesaid five-year period will be converted into Equity Shares held by Financial Creditors (including Equity Shares held before aforesaid conversion) is 74% of the entire share capital of the corporate applicants (comprising of only equity share capital of the corporate applicants) with UVARC holding Equity Shares equivalent to 26% of the entire share capital of the Company (comprising of only equity share capital of the Company). 4.3.13. The entire CIRP costs, payment to employees and operational creditors will be paid in priority to the issue of equity shares; redemption of any ZOCDs or any payment to the financial creditors in respect of the ZOCDs (Page no. 55 - Clause 5.4.4 - Conversion of Verified Financial Debt into Debentures). 4.4. Treatment of stakeholders 4.4.1. The Resolution Plans provide for broadly a common resolution strategy as set out in Clause 4.2 of the Resolution Plans. 4.4.2. There are some differences in the actual b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Claimed Amount Admitted Amount Provided under the Plan# Amount Provided to the Amount Claimed Amount Provided to the Amount admitted (in crore rupees) Financial creditors Secured 19614.07 19,488.73 2,830.00 [Note 1] 14.43% 14.52% Unsecured 4.02 4.02 Operational creditors Operational Creditors including Govt dues 16,689.60 3,925.93 [Note 2] 27.26 0.16% 1.48% Employees 199.80 19.91 0.33 0.17% 1.66% Other debts 435.64 422.52 [Note 3] 0.65 0.15% 1.07% Total 36,943.13 21,411.74 2,858.24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Available Generated Funds: (a) Refund of ₹298.01 crore by DoT to Aircel Limited and Dishnet Wireless Limited as per the decision of the Supreme Court dated 29.11.2018. (b) Return of bank guarantee of ₹453.73 crore from Bharati Airtel to Aircel Limited and Dishnet Wireless Limited as per the decision of the Supreme Court dated 29.11.2018. (c) ₹11 crore equity commitment from the Resolution Applicant excluding ₹4 crore to be incurred towards initial expenditure for restarting the identified business operations. Of these, there will be capital infusion of ₹crore each in Aircel Limited and Dishnet Wireless Limited, and ₹1 crore in Aircel Cellular Limited. 4.5.2. The RP submitted that on account of recoveries made from litigation in the Hon ble Supreme Court during the CIRP, an amount of ₹639 crore was recovered, part of which has already been utilised for payment of CIRP costs of the corporate applicants. 4.5.3. The following sources have been identified as Generated Funds: Pages 7 8 of the Report by Alvarez Marsal India Private Limited appointed by the CoC for evaluating the Resolution Plans (a) Proceeds from monetis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entity wise break up is as follows: (amount in crores) Entity Amount Claimed Amount Verified Amount provided for Aircel Limited 261.81 36.18 0.60 Dishnet Wireless Limited 199.80 19.91 0.33 Aircel Cellular Limited 10.35 0.64 0.01 Total 471.96 56.73 0.94 4.7. Asset Monetisation: 4.7.1. The RP and the RA have submitted that, broadly, the following assets of the corporate applicants are proposed to be monetised as follows: (a) Aircel Limited s Fibre and IE Business in the range of ₹50-60 crore by sale of shares of such business entity on a slump sale basis. (b) Right to use spectrum including spectrum held by Dishnet Wireless Limited in the range of ₹800-1300 crore, subject to approval of DoT. (c) Sale of other assets such as real estate, tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant will then engage with a prospective buyer of these tax benefits and merge the Corporate Debtor companies with such prospective buyers. The shareholders of the Corporate Debtor (financial creditors: 74%; RA: 26%) will get shares in such prospective buyer which can be monetised to realise the value which would actually be the consideration for sale of unabsorbed depreciation and carry forward losses. 4.9. Commercial logic for different percentages of amounts being repaid to the financial creditors in the corporate applicants 4.9.1. The RP submits that the proposed repayments to financial creditors are based on the value of realisable assets in respective companies. However, due to the existence of obligor/co-obligor structure across all three companies, financial creditors are getting compensated for lower recovery in one of the corporate applicants by higher recovery in another corporate applicant where realisable value of assets is higher. 4.10. Commercial logic for issuing 24% equity to the financial creditors: 4.10.1. The Resolution Applicant has proposed to offer 24% equity to financial creditors with a view to (a) passing on the value garnered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Committee will take important decisions such as (a) Identification of the buyer of the assets and approval of the value of sale. (b) Approval of the timing of conversion of ZOCDs into equity. (c) Timing and amount of replenishment of Expense Reserve. 4.12. Implementation Schedule: 4.12.1. The RA will use all efforts to make payments towards CIRP cost and creditors payments within five years from the Effective Date. If such payments are not paid, ZOCD will be converted into equity shares. (Page no. 62 - Clause 5.11 - Term and Implementation Schedule). 4.12.2. Analysis of realisation under Resolution Plans vs Liquidation Value vs Fair Value: 4.12.3. The Applicant submits that the average liquidation value arrived at by two registered valuers appointed by the Applicant is much lower than the resolution plan value of the corporate applicants. Item Amount (in crores) Reference to Report of the Process Advisor Comment Realisation (with Tax losses) 3,807-4,861 Table 3-9 Includes benefit on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating Authority. 5.1.4. Mr Ravi Kadam submitted that since the Resolution Plans are fully compliant with the requirements under the IBC, approval of the Adjudicating Authority be granted as prayed for. 5.2. Submissions of Mr Pradeep Sancheti, learned Senior Counsel for the RA 5.2.1. Mr Pradeep Sancheti, learned Senior Counsel for the RA, submitted that in preparing the Resolution Plans, the RA had to strike a balance between curating and preserving the assets of the corporate applicants or allowing it to go into liquidation. 5.2.2. He submitted that the biggest value of the corporate applicants was its subscriber base, which has been completely lost. Further, the corporate applicants had only 2G and 3G licences. In terms of clause 10.2(c) of the Licence Agreement for provision of Unified Access Services entered into by the corporate applicants with DoT (the Licensor), the licence was liable for suspension, revocation or termination in the event the licencees were to go into liquidation or is ordered to be wound up. However, the licences were protected from cancellation by an order of this Adjudicating Authority. Common Order dated 27.11.2019 in MA 337/2018 in CP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans, will not be available in the event of a liquidation leading to recovery of a substantially reduced sum by the creditors. (c) The monetisation of assets such as fibre is contemplated after carrying out necessary repair and maintenance work which in turn will fetch significantly better value as opposed to a distress sale under liquidation. (d) Further, the resolution plans propose substantial amounts to be generated from the monetisation of carry forward losses and unabsorbed depreciation which will only be available in the event the corporate applicants are continued to be operated as going concern and not in the event of liquidation. (e) An amount of approximately ₹6,630 crore in total, is envisaged as a recovery for the Financial Creditors of the three corporate applicants, which will be much higher than any expected liquidation value. (f) The Resolution Plans also take care of the interests of all stakeholders in addition to maximising the value of the corporate applicants, since the Resolution Applicant proposes to take over the corporate applicants on an as is where is basis. Accordingly, the workmen and employees as are at present working with the corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eak-up has been given in para 58 at p.34 of the Resolution Plan. Mr Pradeep Sancheti stated during oral submissions that salaries have been paid in full. (ii) Operational Creditors other than Workmen With respect to the Operational Creditors, a total of ₹45.25 crore is proposed towards payment of the admitted claims, or the liquidation values, whichever is higher, to be paid towards the same. (iii) Financial Creditors With respect to the Financial Creditors, the admitted amount has been categorised in two portions, namely serviceable financial debt and the non-serviceable financial debt. The non-serviceable financial debt is envisaged to be either converted into equity or written off, while for the serviceable portion of the financial debt, the financial creditors will be issued Zero Coupon Optionally Convertible Debentures ( ZOCDs ). With respect to the non-serviceable debt, the Financial Creditors will be getting upfront equity to the extent of 24% and will therefore, be entitled to the profits emanating from the scaled down operations of the corporate applicants. As regards the serviceable portion of the debt, the ZOCDs which will be issued to the Financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BC seeking approval of this Adjudicating Authority under section 31(1) of the IBC. Section 31(1) ibid mandates that the Adjudicating Authority shall by order approve the resolution plan if it is satisfied that such resolution plan as approved by the CoC under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30. The relevant portions of section 30 are extracted below: - 30. Submission of resolution plan.- (1) *** (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor; (b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law. (3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in subsection (2). (4) The committee of creditors may approve a resolution plan by a vote of not less than sixty-six per cent of voting share of the financial creditors, after considering its feasibility and viability, the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub-section (1) of section 53, including the priority and value of the security interest of a secured creditor and such other requirements as may be specified by the Board: Provided that the committee of creditors shall not approve a resolution plan, submitted before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017, where the resolution applicant is ineligible under section 29A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it: Provided further th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. (4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later. Provided that where the resolution plan contains a provision for combination, as referred to in section 5 of the Competition Act, 2002, the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors. 6.2.3. Thus, the Adjudicating Authority is mandated by law to see, in the first instance, whether the requirements as mentioned in section 30(2) of the IBC are fulfilled or not. These requirements are: - 1. That the resolution plan provides for payment of CIRP costs in priority to all other debts; 2. The amounts payable to the operational credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onetise the same and get huge amount which can be adjusted towards its outstanding from the Corporate Applicants. Since the Liquidation value is very less the value of the existing security is also eroded substantially. However, the same security is again considered by the Financial Creditors. This is intriguing, to say the least. (f) In the case of Aircel Limited, amount provided under the plan is 16.43% of the total amount admitted. Amount admitted excludes approximately of ₹5867 crore verified as contingent claim. In the case of Dishnet Wireless Limited, amount provided under the plan is 13.35% of the total amount admitted. Amount admitted excludes the same amount of approximately of ₹5,867 crore verified as contingent claim as in the case of Aircel Limited. In the case of Aircel Cellular Limited, amount provided under the plan is just 0.257% of the total amount admitted which is infinitesimal. The amount admitted excludes approximately ₹1,563 crore verified as contingent claim. (g) Fair value of both the registered valuers approximately ₹3,282 crore and liquidation value is ₹869 crore. (h) An amount of be ₹6,630 crore in total is env ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reunder may not be available. 6.3.4. The plan also gives commercial logic for issuing 24% of equity to Financial Creditor as passing on the value garnered by the companies during continuous operations of five years. However, we are afraid that the Resolution Applicant may generate very negligible amount from actual business operations for three years as stated above. Therefore, this logic also appears to be flawed. 6.3.5. It is stated that the Monitoring Committee will take important decisions such as identification of the buyer of the assets and approval of the value of sale, approval of the timing of conversion of ZOCDs into equity etc. If this is the role of the Monitoring Committee, then we wonder what the role of the newly constituted Board of Directors would be. Apparent contradictions in the Resolution Plan 6.3.6. In Implementation schedule as stated in para 4.12 above, it is stated that the Resolution Applicant will use all efforts to make payment towards CIRP cost and other payment to creditors. However, in other places it was mentioned that the entire CIRP costs had borne out of the recoveries made pursuant to the orders of the Hon ble Supreme Court. 6.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject-matter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable. 6.4.2. In para 53, the Hon'ble Court noticed that in the report of the Bankruptcy Law Reforms Committee of November 2015, primary has been given to the CoC to evaluate the various possibilities and make a decision. 6.4.3. The Hon'ble Court went on to observe in para 55 that 55. Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by section 31 limited to scrutiny of the resolution plan as approved by the requisite percent of voting share of financial creditors. Even in that enquiry, the grounds on which the adjudicating authority can reject the resolution plan is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal. 6.4.7. The law laid down by the Hon'ble Supreme Court is binding in terms of Article 141 of the Constitution, and we are duty bound to follow it. 6.5. Findings with reference to section 30(2) of the IBC 6.5.1. In this background, our first task is to evaluate the Resolution Plan presented against the requirements of section 30(2) of the IBC. The following table captures the position: Requirement Compliance Comment CIRP costs to be paid Yes Clause 6.2 CIRP costs will be paid from Available Funds in priority to any other creditor. Debts of operational creditors Yes Clauses 6.4 6.5 An amount of ₹60 lakh has been earmarked for employees in proportion to their claims. In case any claim is still pending for verification, the amounts that are verified shall also be considered for proportionate distribution. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution Plan is approved by this Adjudicating Authority. Clause 5.14.2 at p.38 of the Resolution Plan. 6.6.3. The RA further undertakes that if any other approval is required for any of the transaction contemplated in the Resolution Plans, including conversion of Debenture Verified Financial Debt into ZOCDs, redemption of such ZOCDs, conversion of Converted Verified Financial Debt into equity with reference to any financial creditor, then such approval shall also be taken by the corporate applicants acting through the Monitoring Committee, after the plan is approved by this Adjudicating Authority. This undertaking is accepted. 6.6.4. Since the corporate applicants are licencees of spectrum by DoT, approval of DoT for Spectrum Transaction and AL Fibre and Business Transactions, and activities ancillary thereto or required therefor, will also be taken by the corporate applicants acting through the Monitoring Committee after the Resolution Plans are approved by this Adjudicating Authority. 6.7. Reliefs, Concession and Dispensations sought by the RA, and orders thereon 6.7.1. The RA has sought certain reliefs, concessions and dispensations in clause 9 of the Resolution Pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existed only under section 102(2)(a) 102(3) of the Companies Act, 1956. 9.1.7. The approval of the Resolution Plan by the NCLT shall be deemed to have waived all the procedural requirements in terms of the Act including section 66, section 42 and section 62(1)(c) of the Act, and the NCLT (Procedure for Reduction of Share Capital) Rules, 2016 for reduction of share capital and issuance of Equity Shares to Resolution Applicant. Explanation below sec. 30(2) 2(f), inserted vide IBC (Second Amendment) Act, 2018, with effect from 06.06.2018, makes it clear that if any approval of shareholders is required under the Companies Act, 2013, or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be regarded as a contravention of that Act or law. 9.1.8. The approval of resolution Plan by NCLT shall constitute adequate and final approval of NCLT for: (a) cancellation of the existing share capital of the Corporate Debtor (as may be agreed upon) in terms of section 66 and other provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be given. The RA is, however, free to bring specific matters to the notice of the Adjudicating Authority for a decision thereon. 9.1.11. The Resolution Applicant (and its Affiliates) and any future buyers of the Assets of the Corporate Debtor including Right to Use Spectrum and AL Fibre and IE Business shall not be liable, in any way, for any criminal proceedings or actions that have been initiated against the Corporate Debtor or its existing or former promoters, shareholder or directors, employees, officers, at any point of time, before or after the Approval Date. Granted in terms of section 32A of the IBC, which was inserted vide IBC (Amendment) Act, 2020, and notified in the Gazette of India Extraordinary on 13.03.2020, which took retrospective effect from 28.12.2019 9.1.12. (i) Department of Registration and Stamps and Relevant Authorities of Andhra Pradesh, Delhi, Karnataka, Maharashtra, Gujarat, Tamil Nadu, Rajasthan and such other States and geographies where the Corporate Debtor or the Resolution Applicant carries on its business and operations or where its Assets are located; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able resolution of the corporate debtors in a time-bound manner for maximisation of value of assets of such corporate debtors. Such authorities shall also bear in mind that the RA is acquiring the corporate debtors on a going concern basis. 9.1.15. If any Governmental Authority has suspended, cancelled, revoked or terminated any Business Permits of the Corporate Debtor; or any Relevant Authority has threatened to suspend, cancel, revoke or terminate any Business Permits or where the Corporate Debtor has been in breach of the terms of any Business Permits or the provisions of Applicable Law, then all such relevant Governmental Authorities shall waive such non-compliances so as to allow implementation of the Resolution Plan. Post Approval Date, the Relevant Authorities shall not initiate any investigations, actions or Proceedings in relation to such non-compliances or taking any adverse measures in this respect. The RA shall make necessary applications to the concerned regulatory or statutory authorities for renewal of such business permits, and such authority shall consider the same keeping in mind the objectives of the IBC, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aximisation of value of assets of such corporate debtors. Such authorities shall also bear in mind that the RA is acquiring the corporate debtors on a going concern basis. 9.1.18. Any approvals that may be required from Governmental Authorities (including Tax authorities) in connection with the implementation of the Resolution Plan including on account change in ownership/ control of the Corporate Debtor shall be deemed to have been granted on the Approval Date Granted. 9.1.19. Access to Assets of the Company: Upon approval of this Resolution Plan by Adjudicating Authority, each of the lessors/ owners of the Assets where the Company conducts its business shall provide unrestricted access to the Resolution Applicant, the Company, and each of their respective Representatives, employees, officers and agents to such locations without holding any asset of the Company located at such premises for ransom. Granted. 9.1.20. Upon approval of this Resolution Plan by Adjudicating Authority, all actions stated in this Resolution Plan shall be deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ementation plan contemplated under this Resolution Plan pursuant to all the aforesaid contracts and approvals/ clearances (including those being terminated) including termination of these contracts shall be deemed to be permanently extinguished by virtue of the order of the Adjudicating Authority approving this Resolution Plan and the Company and the Resolution Applicant shall at no point of time be, directly or indirectly, held responsible or liable in relation thereto. Granted. However, the RA shall make formal applications to the concerned regulatory or statutory authorities for renewal of such business permits, and such authority shall grant approval keeping in mind the objectives of the IBC, which is to enable resolution of the corporate debtors in a time-bound manner for maximisation of value of assets of such corporate debtors. Such authorities shall also bear in mind that the RA is acquiring the corporate debtors on a going concern basis. 9.1.23. Allow the Corporate Debtor to enjoy and avail in future any tax benefits, deductions, exemptions as per the relevant provisions of the Applicable Law which the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany) that was created/ granted/ arranged in connection with any Financial Debt or Operational Debt or any other debt or obligation of the Company (including in relation to its parent or sister concern) or to any other Person in favour of whom the Company has granted any guarantee or security, at any time prior to Approval Date (whether in favour of or for the benefit of a person appearing in the List of Creditors or not and any enforcement actions in this respect thereof) shall automatically fall away, revoked, cancelled and stand null void as the case may be and all liabilities, claims and obligations in relation to such security, guarantee (including subrogation rights arising out of invocation of such guarantees), pledge, charge, fixed deposits, margin money, cash collateral Encumbrance or other form of collateral shall, stand permanently extinguished post Effective Date simultaneous with creating of Debenture Security Interest as contemplated above in Clause 5 of this Resolution Plan. Granted. 9.1.28. If any Person has any call option, put option or any right of preemption against the Company including right of first refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Applicable Law for implementation of the Resolution Plan, including AL Fibre and IE Transaction or Spectrum Transaction or sale of any other Asset including approval of creditors will be waived or deemed to be taken upon approval of the Resolution Plan by the Adjudicating Authority. Granted, considering that the DoT was represented in all meetings of the CoC from the 3rd meeting onwards, and that the Resolution Plan was also considered in their presence and no objection has been raised thereon. 9.1.31. Allowing transfer of Right to Use Spectrum to any of the Proposed Spectrum Buyers free of any Encumbrance including any Encumbrance from DoT. Granted, considering that the DoT was represented in all meetings of the CoC from the 3rd meeting onwards, and that the Resolution Plan was also considered in their presence and no objection has been raised thereon. 9.1.32. Waiver of Tax on account of writing back/reduction of any debt pursuant to the Resolution Plan. Granted. 9.1.33. DoT shall approve the implementation of the Resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 9 and the provisions of Clause 6 ( Treatment of Various Stakeholders ) and Clause 5 ( Implementation Schedule, Supervision of Implementation and Term ) will be read in harmony with each other and without prejudice to each other. Granted. 6.7.2. The existing members of the suspended Board of Directors of each of the corporate applicants shall be deemed to have resigned from their directorships effective from today. 6.7.3. The Resolution Plans placed on record in respect of all the three corporate applicants, viz., (1) Aircel Limited; (2) Dishnet Wireless Limited; and (3) Aircel Cellular Limited, is hereby approved with the modifications mentioned in para 6.7.1 supra. The same shall be binding on the respective corporate applicant, its members, creditors, guarantors, employees and other stakeholders, as also the Resolution Applicants. 6.7.4. The order of moratorium which has come into effect from 12.03.2018 (in the case of Aircel Limited) and 19.03.2018 (in the case of Dishnet Wireless Limited and Aircel Cellular Limited) by virtue of the orders of admission passed on those dates by this Adjudicating Authority under section 14 of the IBC shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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