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TMI Blog2019 (5) TMI 1916X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he ha examined and verified the resolution plan approved by the COC, in the light of the requirements of the Code and Regulations and that it is compliant to the relevant provisions of the code and regulations. The Resolution Professional has placed the Resolution Plan for our approval - Resolution Professional has certified that the resolution plan does not contravene any provisions of the law for the time being in force. He further certifies that he has submitted to the committee of creditors the resolution plan, which comply with the requirements of the Code and the regulations made there under. Resolution Professional further confirms that the resolution plan and the resolution applicant comply with the requirement of the Insolvency and Bankruptcy Code, 2016, Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. All the requirements of Section 30 (2) are fulfilled and no provision of the law for the time being in force has been contravened. Whether the resolution plan has provisions for its effective implementation is required to be ensured by the Adjudicating Authority in terms of the proviso to sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor. This Tribunal vide order dated 31.05.2018 admitted the petition and appointed Mr. Praveen Bansal as the Interim Resolution Professional (IRP) with necessary directions and to file regular reports of events. The Resolution Professional made a public announcement in Form A as prescribed under Regulation 6 (1) of the Regulations in English and Hindi Edition of Pioneer newspaper on 07.06.2018 for intimation of commencement of Corporate Insolvency Resolution Process of the Corporate Debtor and for calling the creditors to submit their claims along with the proof in the prescribed format. 3. The First Meeting of COC was held on 29.06.2018 wherein the member of the COC unanimously confirmed that Mr. Praveen Bansal interim resolution professional will continue as resolution professional in accordance with the provisions of section 22(3)(a) of the Code. Subsequently, an advertisement to invite expression of interest was published in the newspaper Business Standard Hindi and English Edition on 04.08.2018. 4. It is submitted that the Resolution Professional on 02.07.2018 engaged two registered valuers namely Pensar and Crest Capital under Regulation 27 of the Regulations, to deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein the sole member of committee of creditors conveyed that the proposal of joint resolution applicants for reduction of interest rate on bank facilities is not acceptable since rate of interest is linked with the internal rating assigned by the bank, which is mainly derived from the financial position and external rating of the company. The sole member of COC also informed that the proposal of joint resolution applicants for sale of a portion of the factory land and settlement of funded interest term loan for the similar amount is not acceptable since this would requires specific approval of higher authorities. Copy of the minutes of fourth meeting of COC has been placed on record. 10. The Joint Resolution Applicants were requested to submit their revised resolution plan. Further, the sole member of COC also decided to re-issue Form G to invite prospective resolution applicants. That pursuant to the approval by the COC, invitation for expression of interest for submission of expression of interest/ resolution plan in Form G was again published in English and Hindi edition of Business Standard on 09.11.2018. The last date for submission of resolution plan was fixed for 19.12.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 2016 / Regulations 38 of Insolvency And Bankruptcy Board of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016 and passed by committee of creditors for credibility of resolution applicant and for feasibility and viability of resolution plan and is hereby approved by the committee of creditors. RESOLVED FURTHER THAT the Resolution Professional is authorized to submit the applicant to NCLT, New Delhi Bench, for submission of resolution plan under section 30(6) of insolvency and bankruptcy code, 2016 read with regulation 39(4) of the Insolvency And Bankruptcy Board of India (Insolvency Resolution Process Of Corporate Persons) Regulations, 2016 for approval of resolution plan, which has been approved by committee of creditors. Copy of minutes of meeting of committee of creditors held on 02.022019 approving the resolution plan has been placed on record. 14. The Resolution Plan approved by the COC with the sole member in favor of the resolutions together with the accompanying documents have been attached with the application. 15. The resolution professional has submitted the resolution plan approved by the COC under section 30(6) of the Code and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Unsecured Financial Creditors, statutory dues as well as workmen, and employees. 50% amount is provided for the Trade Creditors. 18. The salient features of the resolution plan are given in the minutes of 6th meeting of COC held on 02.02.2019 in which the resolution plan was approved. The salient features as given are extracted below: 1. Payment to the bank in respect of cash credit, term loan and funded interest term loan will be made as per current terms and conditions sanctioned by the bank. 2. Resolution applicants will infuse ₹ 4.00 crores as unsecured loan. The funds received by corporate debtor will be partly utilized for settlement of dues of Amrit steels and the balance for working capital. There will not be change in the share capital pattern. 3. No waiver has been sought in respect of debt in respect of statutory dues, unsecured financial creditors and workers and employees. Payment will be made in the due course of business. 4. Payment to operational creditor other than to governments, unsecured financial creditor and workers and employees has been proposed at 50% of amount outstanding as on date of commencement of insolvency. Operational creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 combinations, as referred to in section 5 of the Competition Act, 2002 (12 of 2003), 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. 20. Therefore, before approving the resolution plan, the Code mandates the Adjudicating Authority to ensure that, 1) The Resolution Plan meets the requirements of section 30(2) of the Code and is approved by the Committee of Creditors under section 30(4) of the Code, and 2) The Resolution Plan has provisions for its effective implementation. 21. In respect of compliance of point (1) above, we may first state that the resolution plan has been approved by 100% voting share of the committee of creditors. As regards compliance of section 30(2) of the Code, it is necessary to refer to sub-section (2) of section 30 of the Code which reads as follows: 30. Submission of resolution plan.- (1) .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, in terms of section 31(1) of the Code, Adjudicating Authority has also to examine whether the requirements of sub-section (2) of section 30 have been complied with or not. 24. Firstly, the resolution plan approved by the CoC must provide for the payment of insolvency resolution process cost in a manner specified by the Board in priority to the payment of other debts of the corporate debtor. A perusal of the resolution plan reveals that unsecured loan of ₹ 400 lakhs proposed to be infused by the Resolution Applicants and shall be utilized first for payment of the unpaid Insolvency Resolution Process Cost. The Resolution professional additionally has certified that the resolution plan has provided for payment of insolvency resolution process costs in a manner specified by the Board in priority to the repayment of other debts of the corporate debtor in compliance to Regulation 38(1)(a) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The source of payment of CIRP Cost has been identified and the payment would be made in priority to any other payment which would be made under the Resolution Plan. The unpaid CIRP cost would be paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of any agreement, lease deed, contract, etc. executed by the company with various parties, authorities, companies, etc. save and except the provisions and scope of alterations/modifications/amendments as also such reliefs and concessions provided to the Resolution Applicant and the company under the Resolution Plan. The term of Plan and its implementation schedule as per Regulation 38(2)(a) has been provided in the Resolution Plan. It has been stated that the objective of resolution applicant is to settle the liabilities and claims of corporate debtors. Therefore, we find that the third requirement has also been fulfilled. 27. The fourth condition envisaged by Section 30(2)(d) is that it must provide for the implementation and supervision of the resolution plan. As per the Joint Resolution Plan, the term of the resolution plan will be 2 years and the resolution applicants have appointed CA Ajay Kumar Aggarwal as the monitoring professional to monitor and supervise the implementation of the resolution plan on such fee will be settled between him and the resolution applicants. The period of implementation of the plan to be monitored by the monitoring professional is for a peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions for its effective implementation is required to be ensured by the Adjudicating Authority in terms of the proviso to sub-section (1) of Section 31 of the Code. 34. Besides under sub-section (4) of section 31 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. 35. As regard implementation of the Plan the Resolution Professional has certified that the resolution plan has provided for: a. The term of the plan and its implementation schedule; b. The management and control of the business of the corporate debtor during the term of resolution plan shall lie with the joint resolution applicants and the persons nominated by it for running day to day operations of the Corporate Debtor. c. adequate means for supervising its implementation during the resolution plan. 36. It is accordingly submitted that the Resolution plan provides for term of the Plan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is found contrary to the express provisions of law and goes against the public interest. It has been argued that the revival of the corporate debtor company would certainly enhance the interest of all the stake holders and is in the line to achieve the object of the Code. 44. In the resolution plan, relief and concession has been sought in respect of statutory dues for making payment in instalments, no coercive action, waiver of requirement of pre-deposit for filing appeals, waiver of interest, penal interest or damages. These are issues to be decided by the respective government department and appropriate application may be moved before them. 45. In view of the above discussion that the resolution plan, as approved by the CoC, is in accordance with the sub-section 2 of Section 30 read with Section 31 of the Code and as the Resolution Applicant is not disqualified under Section 29A of the Code; we hereby approve the Resolution Plan under subsection (1) of Section 31 of the Code. 46. It is hereby declared that the Resolution Plan is binding on the corporate debtor, members, employees of the corporate debtor, creditors of the corporate debtor and other stakeholders involve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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