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TMI Blog2021 (12) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... o their individual exposure with the same terms as that of Assenting FCs - HELD THAT:- Section 30(2)(b) of the Code provides for the payment of debts of the Dissenting FCs in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with Section 53(1) of the Code in the event of liquidation. Explanation 1 to Section 30(2)(b) of the Code further clarifies that distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors - It is pertinent to note that the invocation of BG is as per the terms of Resolution Plan. Thus, any increase in the claim amount of the Assenting FCs due to the invocation of such BG cannot be a ground for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of the Assenting and Dissenting/Abstaining Financial Creditor be modified to the extent that all Secured Financial Creditors (FCs) inter alia Applicants be treated equally for payment of plan value subject to their individual exposure with the same terms as that of Assenting FCs. 2. Facts as submitted by Applicants, among others: a) The Company Petition (CP 1137 of 2017) filed under section 7 of the Insolvency and Bankruptcy Code 2016 (the Code) seeking Corporate Insolvency Resolution Process (CIRP) of Jyoti Structures Limited (Corporate Debtor) was admitted by this bench on 04.07.2017. Thereafter, the Committee of Creditors (CoC) was constituted and the 1st CoC meeting was held on 10.08.2017 in which 32 FCs inter alia t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant further submits that in the approved Resolution Plan, there is glaring inequality in the payment between the Assenting/ Dissenting FCs and Operational Creditors (OCs). OCs are paid 10% more than that of the Dissenting/ Abstaining FCs and Assenting FCs are getting around 18 times more under the Resolution Plan. e) The Apex Court in the matter of Committee of creditors of Essar Steel India Limited Vs. Satish Kumar Gupta held that, equitable treatment is to be accorded to each creditor depending upon the class to which it belongs: secure or unsecure, financial or operational . Therefore, although Section 30(2)b)(ii) provides for liquidation value to be given to Dissenting FCs but that does not mean there shall be any Discrimination be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Resolution Plan by the AA, then the said invoked amount shall be added to the fund based debts extended by the issuing bank and Net Present Value (NPV) of the invoked BG amount will be added to the NPV of the overall amount of 3,674 crores payable to the Secured FCs. Clause F (3) of the Resolution Plan is reproduced below: F. Bank Guarantee/Letter of Credit Limits 3. In case any BG/LC issued on behalf of the Company is invoked by the beneficiary after the date of the approval of the Final Resolution Plan by the NCLT, the Company will be liable to make good such invocation to the issuing bank as follows: (a) If the BG/LC was issued prior to the date of the approval of the Final Resolution Plan by the NCLT, the invoked amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the order of priority in sub-section (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch creditors. 7. It is pertinent to note that the invocation of BG is as per the terms of Resolution Plan. Thus, any increase in the claim amount of the Assenting FCs due to the invocation of such BG cannot be a ground for challenge by the Dissenting FCs on grounds of discrimination. Further, the decision to include the invoked amount of the BG to the fund-based debts is a commercial decision of the CoC. 8. Further, Resolution Plan once approved by the AA shall stand frozen and binding on all stakeholders including FCs. The Hon ble Supreme Court in the matter of Ghanshyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Co. Ltd. (Civil Appeal 8129 of 2019, dated 13.04.2021) in para 95 (i) at pg. 103 held That once a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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