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TMI Blog2021 (12) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... e the implementation of the resolution plan. The approved resolution plan has to be implemented at the earliest and that is the mandate under the IBC. As per Section 12 of the IBC, subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of 180 days from the date of admission of the application to initiate such process, which can be extended by a further period of 180 days - As per the third proviso to Section 12 of the IBC, which is also inserted by Act 26 of 2019, where the insolvency resolution process of a Corporate Debtor is pending and has not been completed within a period stated hereinabove, i.e., within a period of 330 days, such resolution process shall be completed within a period of 90 days from the date of commencement of the IBC amendment Act, 2019, i.e., 16.08.2019. The entire resolution process has to be completed within the period stipulated under Section 12 of the IBC and any deviation would defeat the object and purpose of providing such time limit. However, by earlier order, the time limit has been condoned in view of the various litigations pending between the parties and in the peculiar facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted by respondent No.3 herein Deccan Value Investor LP (hereinafter referred to as the DVI ) and respondent no.2 herein M/s Liberty House Group Private Limited (hereinafter referred to as the Liberty ) were considered by the COC. However, DVI withdrew its Resolution Plan and therefore the revised plan of Liberty was considered and approved by the COC on 2.4.2018. Subsequently, the Resolution Plan submitted by Liberty came to be approved by the National Company Law Tribunal, Chandigarh Bench, Chandigarh (hereinafter referred to as the Adjudicating Authority ) vide order dated 25.07.2018. However, the successful resolution applicant Liberty did not act as per the approved Resolution Plan. Thereafter, number of proceedings were initiated against the successful resolution applicant Liberty. 3.1 An application under Section 60(5) read with Section 74(3) of the IBC was filed by the COC/financial creditors before the Adjudicating Authority informing that the successful resolution applicant Liberty has failed to act as per the approved Resolution Plan and it was prayed to reinstate the COC and the resolution professional to ensure that the Corporate Debtor remain as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a resolution applicant ought not to undermine the primary mischief sought to be resolved; (c) Maximisation of the value of the assets of the Corporate Debtor is imbedded in the Code and even forms the part of its Preamble and therefore, an opportunity ought to be granted to the Committee of Creditors to make an attempt at resolution specially keeping in view the availability of suitable resolution applicants in the market; and (d) Liberty, by its deliberate failure in implementing the Approved Resolution Plan, has defrauded the Adjudicating Authority, the Committee of Creditors and all the stakeholders of the Corporate Debtor, hence, the period extended in proceeding with the CIR Process with Liberty as a Resolution Applicant ought to be excluded to uphold the principles underlining the Code. 5. By order dated 6.9.2019, while issuing notice in the present appeal, this Court stayed the liquidation proceedings, until further orders. 5.1 When the appeal was taken up for further hearing on 24.09.2019, it was submitted on behalf of the COC that the resolution professional may be permitted to invite the fresh offers within a period of 21 days. This Court permitted the resolution p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue which needs to be addressed is whether recourse to the contempt jurisdiction is valid and whether it should be exercised in the facts of this case. Undoubtedly, as we have noted earlier, the conduct of DVI has not been bona fide. The extension of time in the course of the judicial process before this Court enures to the benefit of DVI as a resolution applicant whose proposal was considered under the auspices of the directions of the Court. DVI attempted to resile from its obligations and a reading of its application which led to the passing of the order of this Court dated 18 June 2020 will leave no doubt about the fact that DVI was not just seeking an extension of time but a re-negotiation of its resolution plan after its approval by the CoC. Then again, despite the order of this Court dated 18 June 2020 rejecting the attempt of DVI, it continued to persist in raising the same pleas within and outside the proceedings before the NCLAT. The conduct of DVI is lacking in bona fides. The issue however is whether this conduct in raising the untenable plea and in failing to adhere to its obligations under the resolution plan can per se be regarded as a contempt of the order of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all accordingly stand dismissed, subject to (iii) below; (iii) In terms of the submission which has been made by DVI before this Court and even otherwise, as a consequence of the dismissal of its IA on 18 June 2020, it 30 shall not set-up a plea for force majeure in the proceedings which are pending before the NCLAT in appeal against the order of the NCLT approving the resolution plan; and (iv) The appeal filed by DVI against the approval of the resolution plan by the NCLT shall peremptorily be heard and disposed of by the NCLAT not later than within a period of one month from the date of the present judgment. This Court also directed that the appeal filed by the DVI against the approval of the resolution plan shall peremptorily be heard and disposed of by the appellate authority within a period of one month from the date of the said judgment. 5.5 That thereafter, by a detailed judgment and order dated 16.04.2021, the appellate authority dismissed the appeal preferred by the DVI which was filed against the order passed by the adjudicating authority dated 9.7.2020 approving the resolution plan submitted by the DVI itself. Thus thereafter, the Resolution Plan sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate is achieved. Under the Resolution Plan, the following steps are to be undertaken a) Delisting of Amtek s equity share capital from the stock exchanges Completed. b) Increase of authorised share capital of Amtek and completion of necessary filings Completed. c) DVI and/or its affiliate to subscribe to the equity shares of Amtek by infusing nominal amounts of INR 5,00,000 ( Nominal Infusion ) - Ongoing. d) Debt identified as unsustainable to be converted into equity and equity to be issued and allotted to the creditors ( Unsustainable Equity Allotment ) - Ongoing. e) Reduction in pre-CIRP sharesholding of Amtek and equity held by way of Unsustainable Equity Allotment This action is pending and can be undertaken only upon Nominal Infusion and Unsustainable Equity Allotment. f) Issuance and allotment of 90% of equity share capital to DVI and/or its affiliates Ongoing. g) Issuance and allotment of 10% of equity share capital to financial creditors Ongoing. h) Issuance and allotment of non-convertible debentures to DVI Affiliate Ongoing DVI vide its emails dated 18.11.2021 had informed the IMC members that: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed mutually and simultaneously. It is reported that Implementation and Monitoring Committee (IMC) has been constituted comprising of resolution professional, three identified lenders of the Corporate Debtor and nominee of DVI to supervise the implementation of the resolution plan. 9. The approved resolution plan has to be implemented at the earliest and that is the mandate under the IBC. As per Section 12 of the IBC, subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of 180 days from the date of admission of the application to initiate such process, which can be extended by a further period of 180 days. As per proviso to Section 12 of the IBC, which has been inserted by Act 26 of 2019, the insolvency resolution process shall mandatorily be completed within a period of 330 days from the insolvency commencement date, including any extension of the period of corporate insolvency resolution process granted under Section 12 of the IBC and the time taken in legal proceedings in relation to such resolution process of the Corporate Debtor. As per the third proviso to Section 12 of the IBC, which is also inserted by Act 26 of 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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