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TMI Blog2019 (1) TMI 1959X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted by Tri-county Premier Hearing Services Inc, Resolution Applicant (RA). 2. The C.P. (I.B.) No. 1283/I&BP/NCLT/MAH/2017 was filed by Axis Bank Limited under section 7 of IBC for initiation of Corporate Insolvency Resolution Process (CIRP) against BSR Diagnostic Limited, Corporate Debtor. The Petition was admitted by this Tribunal vide order dated 29.09.2017. The Committee of Creditors (CoC) confirmed the appointment of the Interim Resolution Professional Mr. Sundaresh Bhat as Resolution Professional (RP) in their meeting held on 03.11.2017. The 180 days' period for CIRP was further extended by this Tribunal for another 90 days (w.e.f. 29.03.2018) vide an order dated 12.03.2018. 3. The RP Published advertisement inviting Expression of Interest (EOI) on 07.12.2017 and a subsequent addendum for extension of last date for submission of EOI on 22.12.2017. The RP received EOI from six entities of which three filed their resolution plan. In the 6th CoC meeting, held on 22.06.2018, only Resolution Plan of Tri-county Premier Hearing Services Inc, dated 21.06.2018, was voted and the rest two plans were rejected by the CoC. The resolution plan of the RA was voted upon and 51.47% vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditor 106.26 45 Payment Methodology: Upfront Cash Payment Rs.12 Cr within 60 Days from the date of order of Hon'ble NCLT Tranche 1 Rs.26 Cr by 31.03.2019 without any interest. Tranche 2 Rs.3 Cr. by 31.03.2020 with an interest of 8% p.a. (Interest on reducing balance from April 2019) Tranche 3 Rs.4 Cr. by 31.03.2021 with an interest of 8% p.a. (Interest on reducing balance from April 2019) Total Rs.45 Cr. Sources of funds: Equity infusion Rs.19 Cr. To be sourced from Resolution Applicants' own funds. Long term Loan Rs.2.50 Cr. To be sourced from Resolution Applicants' own funds NBFC Rs.15 Cr. In principle sanction available of Rs.35.00 crores from NBFC, Shanky Financial Service Private Limited. Internal Accrual Rs.8.50 Cr To be sourced from internal accruals. Total Rs.45 Cr. 2. Payment to Unsecured Financial 43.80 0.44 The Resolution Applicant proposes to settle the total outstanding claim of the Unsecured Financial Creditors at 1% of the claim amount, being Rs.00.44 crore, in the same manner, without any interest, as proposed for financial creditors. 3. Operational Creditor 17.88 1.01 5% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 10. The Resolution applicant has stated in the Plan that it has dealt with the interest of all the stakeholders of the Corporate Debtor. The Resolution Plan provides the following information with regard to the interest of various stakeholders: Sr. No. Category of Stakeholder Amount Claimed (Rs.crore) Amount Admitted (Rs.crore) Amount provided in Plan (Rs.crore) Amount provided to Amount claimed (approx.%) 1. Secured Financial Creditor 106.35 106.26 45 42 2. Un-secured Financial Creditor 43.80 43.80 0.44 1 3. Operational Creditor 18.17 20.23 1.01 5 4. Government Dues 2.95 2.95 0.51 17 5. Workmen/ Employees 1.65 1.53 1.36 82 6. Related Party Creditors 14.13 14.13 Nil 0 11. The Operational Creditors are being paid more than the Unsecured Financial Creditor, in proportion to their respective debts. The Entire proposed amount will be paid upfront as full and final settlement by 31.03.2019. 12. The Resolution Plan states that the term of the proposed resolution plan will commence from the Effective Date i.e. date of approval of the plan by the Adjudicating Authority, and shall continue for five years ending in FY 2022-23. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause of Resolution Plan (a) Provides for the payment of insolvency resolution process costs? As per Clause 7(3) of the Plan the Resolution Applicant has specified that the IRP Cost shall be paid in priority to all other debts. As per Clause 8.2 of the Plan, IRP cost is specified as Rs.4.25 crore. It is further undertaken that the actual CIRP cost, as ratified by CoC will be paid within thirty business days from the effective date. (b) Provides for the payment or the debts of Operational Creditors? Operational Creditors: Admitted claim - Rs. 20.83 crores Liquidation value - NIL Payment as full and final settlement Rs.1.01 crores (upfront payment) Employee/Workmen Dues: The Plan proposes to completely settle the existing principal outstanding dues to Workmen/Employees including payment of gratuity, over a period of three years. Income Tax Dues: The plan propose that any liability towards the demand raised by the Income Tax Department towards interest, penalty and short payment of TDS, would be settle and paid over a period of 5 five years. (c) Provides for the management of the affairs of the Corporate debtor? The plan proposes to replace and reconst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority if the Monitoring Agency is unable to satisfactorily perform its responsibilities or breaches terms of its appointment. 23. The Plan seeks approval of this Tribunal to the effect that post the approval of the resolution plan by this Tribunal, no re-assessment/revision or any other proceedings under the provisions of the Income Tax Act or any other statutory Act should be initiated on the Company in relation to period prior to acquisition of control by the RA and any consequential demand should be considered non-existing and as not payable by the Company. Any proceedings which were kept in abeyance in view of process under the code or otherwise should not be revived post the order of this Tribunal. The Income Tax Department to grant exemption from the applicability of provisions of section 79, section 41(1) and section 28 of Income Tax Act 1961 in relation to the Plan. The said reliefs cannot be granted and are hereby rejected. 24. The Plan further seeks immunity from any actions and penalties (of any nature) under any law for any non-compliance of laws in relation to the Company or by the Company, which was existing as on the date of acquisition of control by the Resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject is not identified and the relief sought is vague and general. 30. This and any other such relief if sought for in the Resolution Plan, where the contract/agreement/understanding/proceedings/ actions/notice etc. is not specifically identified or are for future and/or contingent liabilities are hereby rejected. 31. We shall clarify here that any resolution applicant shall overtake the Corporate Debtor with all its assets and liabilities. If any relief with respect to any identified liability of the Corporate Debtor is required, then that needs to be clearly mentioned and sought for in the Resolution Plan. This bench cannot allow any general power to any resolution applicant absolving him of a liability of the corporate debtor company without knowing about the liability against which such exemption is sought. In other words, reliefs/exemptions from only existing liabilities which are specifically identified can be sought and allowed in the Resolution Plan. 32. The resolution plan has necessary provisions for its effective implementation. 33. It may be noted that the MA 649/2018 filed on 27.06.2018 by the RP seeking order for Liquidation of the Corporate Debtor was still pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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