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TMI Blog2019 (6) TMI 1660X X X X Extracts X X X X X X X X Extracts X X X X ..... r seeking approval of the Resolution Plan, submitted by SREI Multiple Asset Investments Trust-Vision India Fund dated 11th December, 2018 (the Resolution Applicant) duly approved by the Committee of Creditors. AVERMENTS MADEIN THEAPPLICATIONINBRIEF: 2.1 This Tribunal vide order 19.07.2017 admitted the Petition filed under Section 7 of the Code and initiated Corporate Insolvency Resolution Process (hereinafter referred to as 'CIRP') read with Rule 4 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016, against Deccan Chronicle Holdings Limited (hereinafter referred to as 'DCHL' or 'Corporate Debtor'). Further vide said order, Mr. Karuchola Koteswara Rao was appointed as the Interim Resolution Professional (hereinafter referred to as IRP/RP) under the provisions of the IBC, 2016 and subsequently appointed the Applicant as Resolution Professional vide order dated 08.02.2018. 2.2 This Tribunal extended CIRP period by 90 days beyond 180 days from 15.01.2018 based on the application moved by Resolution Professional. Thus, the CIRP period of the Corporate Debtor ended on 14.04.2018. 2.3 Thereafter, This Tribunal also allowed IA 69 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % 23 Pegasus Asset Reconstruction Pvt Ltd 2,469,096,892 3.02% 24 Photon Infotech Pvt. Ltd. 93,452,711 0.11% 25 Religare Finvest Limited 1,424,401,462 1.74% 26 Suhani Trading and Investment Consultants Private Limited 3,200,265,453 3.91% 27 SBI Pension Funds Private Limited (Central Govt. Scheme) 170,920,548 0.21% 28 SBI Pension Funds Private Limited (State Govt. Scheme) 170,920,548 0.21% 29 SREI Infrastructure Finance Limited 2,969,373,143 3.63% 30 Softlink Merchants Private Limited 9,118,220 0.01% 31 State Bank of India 906,745,682 1.11% 32 Tata Capital Financial Services Limited 1,827,162,573 2.23% 33 The Jammu & Kashmir Bank Limited 842,289,000 1.03% 34 Unilazer Ventures Private Limited 364,438,487 0.45% 35 UV Asset Reconstruction Co. Limited 11,932,096,653 14.59% 36 V Shankar 457,763,839 0.56% 37 Vidhi Sales Private Limited 18,629,726 0.02% TOTAL 81,806,458,331 100% 2.6 That Expression of Interest (EoI) was published in the All India Edition of Business Standard dated 08.02.2018 for a wide spread coverage with the last date for receipt of the EoIs being 15.02.2018 (06:00 p.m.). Thereafter, the Applicant as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 to the Resolution Applicant on the instructions CoC. 2.12 It is also averred, the Successful Resolution Applicant successfully furnished an unconditional and irrevocable Performance Bank Guarantee (bearing N0.077019IGPER0001) of Rs. 15.00 Crores (Rupees Fifteen Crores Only) dated 02.01.2019, from a scheduled commercial bank in favour of Canara Bank with respect to the implementation of the Successful Resolution Plan ("Performance Bank Guarantee/PBG") and the said PBG is valid up to 30.06.2019. 2.13 That on examination of the Performance Bank Guarantee dated 02.01.2019 by the Applicant / Resolution Professional she observed that though the PBG was issued for the mandated period of 6 months, the Bankers of the Successful Resolution Applicant expressed its inability to issue the same with no drop date. In order to ease this, an 'Undertaking' was sought from the Successful Resolution Applicant which would bind it to provide a renewed PBG as per the terms of the RFRP which would be valid for such further period as desired by Canara Bank in its sole discretion. The 'Undertaking' dated 10.01.2018 was provided by the Successful Resolution Applicant as per the format app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res of DCHL comprising of 54% of shareholding in the Company and also executed Memorandum of Entry mortgaging 13 properties of DCHL and personal properties of three promoters in favour of FCHL. PIL Industries Ltd and FCRL filed suites before Bombay High Court which passed an order dated 24.08.2012 restraining these Companies from creating any transfer, sale or Encumbrance etc to any third party in respect of 11,28,51,000 equity shares and properties mortgaged in favour of any third party. Further, vide order dated 16.04.2013, Hon'ble High Court passed an order for appointment of Receiver and formal attachment of total 16 properties both DCHL and APL. 3.4 It is averred, FCRL and PIL Industries Limited were amalgamated into Suhani Trading and Investment Consultants Private-Limited vide orders passed in CP No.756 of 2017 dated 18.10.2017 by NCLT Mumbai Bench, as such the debts of DCHL and APL vests with Suhani Trading and Investment Consultants which subsequently changed its name to Future Corporate Resources Pvt Limited (FCRPL) 3.5 It is the case of FCRPL that DCHL agreed to stand guarantee for the loan advanced to APL and FCRL and raised this point in CoC meeting and also sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to provide a detailed list of properties being transferred to it by virtue of Resolution Plan and seek no objection certificate from CoC members concerned who are having a charge or claim on those particular properties. Further it sought directions to Resolution Applicant to note the status of the FCRPL as secured creditor as already held by this Tribunal. REJOINDER FILED BY APPLICANT / RESOLUTION PROFESSIONAL TO THE REPLY / OBJECTIONS FILED By M/S FCRPL 4.1 The Applicant / Resolution Professional denies the allegations and contentions made against her by FCRPL and further stated that Resolution Professional is unable to offer her comments to the commercial aspects of the Resolution Plan including the purported treatment of claim/ loan of FCRPL and further stated that commercial decision and matters relating thereto is purely within the domain of CoC, which approved the plan with 81.39% majority and that FCRPL also voted in favour of the Resolution Plan. 4.2 The Applicant / Resolution Professional relied on paras 58, 59 and 61 of Writ Petition (Civil) No.99 of 2018 of Hon'ble Apex Court in the matter of Swiss Ribbons Pvt Ltd & Anr Vs Union of India & Ors and held that Reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider FCRPL as a secured creditor but only as unsecured creditor. 4.6 The Resolution Professional further contends that basing on the orders passed by this Tribunal on 17.07.2018 in IA 224 of 2018, she made requisite changes in the List of Creditors. 4.7. The Resolution Professional urged this Tribunal to direct FCRPL to withdraw its comments/submission/observations against the Resolution Professional and amend the counter affidavit and sought directions to implead FCRPL in IA No.66/2019 in view of directions sought by FCRPL. FINDINGS 5. I have heard the Counsel for Resolution Applicant and also the Resolution Professional. Counsel for Resolution Applicant filed written submissions. This Application is filed under Section 30 (6) of Insolvency & Bankruptcy Code, 2016 (herein after referred to as "CODE") for approval of the Resolution Plan dated 11.12.2018. The Resolution Plan is shown as Annexure-B (colly) at page nos. 47-101 of the Application. 6. The Resolution Plan was approved by CoC with a voting percentage of 81.39%. The Minutes of the 20% CoC meeting held on 10.12.2018 is shown as Annexure-A at page nos. 26-46. Thus Resolution Plan was approved by majority of creditors h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Applicant and other connected persons to take a prudent decision while considering the resolution plan for its approval. 8. The Resolution Professional filed copy of the Performance Bank Guarantee dated 02.01.2019 shown as Annexure-G at page Nos. 113-115. I have seen the performance bank guarantee (copy) which is for Rs. 15 crores. The Resolution Professional also filed undertaking given by Resolution Applicant dated 10.01.2019 shown as Annexure-H at page No. 116-118. She also filed copy of amendment of the performance bank guarantee. dated 10.01.2019 shown as Annexure-I at page Nos. 119-120. 9. The contention of the Learned Counsel for Resolution Applicant that this Tribunal to approve the Resolution Plan granting certain reliefs as stated in Clause 11.1 to 11.30. The Learned Counsel would contend the CoC with 81.39% of voting share approved the Resolution Plan submitted by the Resolution Applicant SREI Multiple Asset Investment Trust Vision India Fund (herein after referred to as SMAIT). The Counsel would contend that Resolution Applicant has endeavored to maximize the value of the assets of Corporate Debtor. The Resolution Plan takes care of the interest of the stakeholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red for waiver as held in the decision of NCLT, Chandigarh Bench, in the case of "State Bank of India v MOR Farms Pvt Ltd" dated 15.06.2018... wherein waiver is granted in respect of tax dues. (3) Hon'ble NCLT Chennai Bench order dated 11.03.2019 in the matter of UNION BANK OF INDIA v STAR AGRO MARINE EXPORTS PRIVATE LIMITED Para 9: whether the claim of operational creditors like the Income Tax Department, Sales Tax Department or any other statutory authority's dues can be waived off under the provisions of I&B Code, 2016 and the Regulations made thereunder while approving "Resolution Plan" After referring to S.30 (2) 0b) and S. 53 of IBC and keeping in sight Reg.37 of CIRP Regulations 2016, it held that statutory dues 0which are by nature of operational debts owed to operational creditors) can be entirely waived off if the assets of Corporate Debtor are not sufficient to meet out the value of the operations creditors in the event of liquidation of the CD u/s 53 IBC. "Regulation 37 makes it clear that the Resolution Plan which cures or waives of any breach of the terms of any debt due to the Creditors is valid in the eye of law and can be approved by Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voting share. However, the Plan has been approved by the members of CoC having 81.39% voting share. The certificate given by Resolution Professional is marked as Annexure-E along with Affidavit given under Section 29-A by the Resolution Applicant. The successful Resolution Applicant has also furnished Performance Bank Guarantee for 15 crores. A copy of PBG is shown as Annexure-G which is valid till 30.06.2019. However, the revised PBG was issued which is valid till 30.09.2019. The Resolution Applicant has given an undertaking for extension of PBG which is shown as Annexure-H. The total claims of Financial Creditors admitted by the Resolution Professional is Rs. 8,180.65 crores. The total claims due to the Operational creditors admitted by the Resolution Professional is Rs. 154.36 crores. The Resolution Professional has given undertaking to provide Rs. 408.06 crores. Rs. 350 crores is provided for Financial Creditors and Rs. 6 crores is provided to the Operational Creditors. The payment to the Financial Creditors consisted of cash component as well as asset component. The amount of Rs. 350 crores being provided to the Financial Creditors Category-A lenders. This amount is payable i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lief cannot be granted while approving the Resolution Plan. It is open to the Resolution Applicant to move the concerned court and seek appropriate relief. The relief prayed in Clause 11.9 can be granted in favour of Resolution Applicant. 16. The Resolution Applicant has to obtain necessary approval if any required within one year as per Section 31 (4) of the Code. The Resolution Applicant further prayed for order / direction to use brand name of the Corporate Debtor. However, an Application was filed claiming exclusive right over the brand name / trademarks of the Corporate Debtor. Subject to the result of the said Application, the Resolution Applicant is entitled to use the brand name / trademark of the Corporate Debtor as stated in Clause 11.12 of the Resolution Plan. 17. Regarding waiver / exemption of the claim in Clause 11.13, it is clear till date no claim is made before the Resolution Professional by the IT Department. The Resolution Applicant has nothing to do with the tax liability crystallized prior to commencement of CIRP. Regarding other tax waivers due to the Govt. authorities it is for the Resolution Applicant to approach the concerned authorities seeking waiver an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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