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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 ..... approved by the CoC with 81.39% voting share. Annexure-C is the copy of voting percentage. Annexure-B (Colly) is the Resolution Plan filed by SMAIT dated 11.12.2018. The Plan to be approved by CoC with 66% voting share. However, the Plan has been approved by the members of CoC having 81.39% voting share. M/s Future Corporate Resources Private Limited (FCRPL) filed counter to the Application filed by the Resolution Professional for approval of the Resolution Plan. The averments in the counter are already stated. Interestingly, FCRPL is a member of CoC which voted in favour of the Resolution Plan. Having voted in favour of the Resolution Plan, FCRPL is now asking the Tribunal to delete Clause 11.28 from the Resolution Plan and related clauses with regard to waiver of guarantees and securities given by DCHL for the loan taken by subsidiary Company Aviotech Pvt Limited. It is not open to FCRPL to ask for deletion of the Clause 11.28 from the Resolution Plan because it has voted in favour of the Resolution Plan. Without going into the merits of the objections raised by FCRPL, the objection cannot be entertained on the simple ground, it has voted in favour of the Resolution Plan. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions 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 2018 on 26.03.2018, by. excluding period of 87 days from 21.08.2017 to 16.11.2017 from the total CIRP period as prescribed under Section 12 of the IBC, 2016 and CIRP period of the Corporate Debtor ended on 10.07.2018. Subsequently, by virtue of the Order of the Hon'ble National Company Law Appellate Tribunal dated 20.07.2018 bearing Appeal (AT) (INS) No. 316 and 317 of 2017, period from 11.12.2017 till 20.07.2018 (i.e.7 months, 8 days) was excluded from the CIRP Period. Accordingly, the CIRP period of the Corporate Debtor ended on 15.02.2019. 2.4 That pursuant to initiation of resolution process, the IRP issued a public announcement and invited claims from the creditors of the Corporate Debtor. On receiving such claims, the IRP collated the same and constituted a Committee of Creditors. 2.5 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shree Tea Industries Limited 94,595,890 0.12% 18 Karur Vysya Bank Limited 765,811,177 0.94% 19 Karvy financial Services Limited 976,125,457 1.19% 20 Kotak Mahindra Bank 1,835,817,779 2.24% 21 L T Finance Limited 480,101,706 0.59% 22 Life Insurance Corporation of India 4,647,339,462 5.68% 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.12.2018 and placed the same for consideration. It is averred, the COC directed the Resolution Applicant/ SREI Multiple Asset Investment Trust-Vision India Fund to reconsider some points and submit the revised Resolution Plan for reconsideration by 11.12.2018. Post receipt of the revised Resolution Plan dated 11.12.2018, the same was circulated to the CoC for its approval and consideration by way of evoting alongwith the minutes of the 20! Meeting of CoC. 2.9 The Resolution Plan of SREI Multiple Asset Investment Trust-Vision India Fund was voted with 81.39% voting percentage. The Resolution Plan as received from SREI Multiple Asset Investment Trust Vision India Fund dated 11.12.2018 was approved as per the provisions of Section 30(4) of the Insolvency Bankruptcy Code, 2016 read with Regulation 39 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 2.10 It is further averred by Resolution Professional that the Resolution Plan as submitted by SREI Multiple Asset Investment Trust Vision India Fund was examined by her and found to be in compliance with the mandatory provision of Section 30(2) of the IBC and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IBC which is also in terms of the requirements of Section 30(2) of the IBC read with Regulations 37 and 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016, with 81.39% voting. OBJECTIONS/REPLY YFILED BYM/S FUTURE CORPORATE RESOURCES PRIVATE LIMITED IN BRIEF 3.1 It is contended CoC opened the Resolution Plan in its 10% Meeting held on 14.05.2018 and in the 12th CoC Meeting the Resolution Plan submitted by SREI-SMAIT was declared as highest bidder. Since, Resolution Plans submitted by other two Resolution Applicants i.e. Bennett Coleman Company Ltd and Arm Infra Utilities Pvt Limited failed to submit plan as per RFRP, they were pulled out from the bidding process and SMAIT became the sole bidder of DCHL and further decreased the Resolution amount offered to FCRPL from ₹ 7.87 crores as per plan dated 12.03.2018 to ₹ 3.70 crores in the present plan submitted to the Tribunal for approval. 3.2 It is contended, FCRPL was declared as Secured Creditor vide orders passed in IA No.224 of 2018 on 17.07.2018. The Resolution Plan when put to vote on 11th July 2018 received only 55.08% of vote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause. 3.7 It is contended, despite FCRPL holding charge over immovable properties that are subject matter of suits for recovery before Hon'ble Bombay High Court and further orders of attachment and formal possession through a Court Receiver, it is alleged the claim of FCRPL was not considered as Secured Creditor and further alleged there is no variance in the proportion of settlement offered to FCRPL. 3.8 It is also alleged that para 11.28 of the Resolution Plan is arbitrary and illegal in terms of consideration of the rights of the holders of the secured debt. It is also alleged that despite orders passed by this Tribunal on 17.07.2018 to declare FCRPL as secured creditor, the proportion of its receivable as per Resolution Plan did not change and that it would receive a sum of ₹ 3.70 crores as against the admitted claim of ₹ 325.00 crores and no explanation is given for differential treatment between the secured creditors. 3.9. Itis also alleged that from Schedule 5A filed along with the Resolution Plan, FCRPL is not shown as Secured Creditor for FC Category B which is against the order passed by this Tribunal on 17.07.2018. 3.10 Itis contended, the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Resolution Professional has to confirm that a Resolution Plan does not contravene any of the provisions of the law including Section 29A of the Code and contend that Section 30(2) 0e) does not empower the Resolution Professional to decide whether the resolution plan does or does not contravene the provisions of law. 4.4 The Resolution Professional further relied on Paras 41 44 of the Judgement of Hon'ble Apex Court in Civil Appeal Nos. 10673 of 2018 in the matter of K. Sashidhar V/s Indian Overseas Bank ORs dated 05.02.2019 which held that Section 30 (4) is coupled with a duty to exercise power with utmost care, caution and reason, keeping in mind the legislative intend and the spirit of the Code. Fullest attempt should be made to revive the Corporate Debtor and not to mechanically shove them to the brink of Liquidation Process, which has inevitable impact on larger public interests and the stake holders in particular, including workers associated with the Company. Further is has held that the Resolution Professional is not required to express his opinion on matters within the domain of the financial creditors, to approve or reject the resolution plan. 4.5 To the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate, the Resolution Professional certified that the Resolution Plan was approved by the CoC and it provides for:- (a) The payment of the Insolvency Resolution Process costs in priority to the repayment of other debts of the Corporate Debtor. (b) Payment of the debts of Operational Creditors in priority to any financial creditor, which shall not be less than the amount to be paid to the Operational Creditors, in the event of liquidation of Corporate Debtor under Section 53 of the Code. (c) The Resolution Professional also certified the Resolution Plan provides for the management of affairs of the Corporate Debtor. (d) The Resolution Plan provides implementation and its supervision. (e) The Resolution Plan prima facie does not contravene any of the provisions of the law for the time being in force and the Resolution Applicant has undertaken that the Resolution Plan is not in contravention of any of the provisions of the law for the time being in force. The prayers, reliefs, waivers and concessions etc sought for are subject to the approval of the Adjudicating Authority. (f) The Resolution Plan contains an affidavit stating that Resolution Applicant is eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not only essential for effective implementation of the Resolution Plan but also to protect the interest of the stakeholders including workmen and employees. The exemptions and waivers sought for are intended for effective implementation of the Resolution Plan and without which the Resolution Plan cannot be implemented / executed. 10. The Counsel contended, the Corporate Debtor is utilizing the brands / trademarks from the inception of the business and that Corporate Debtor to use the same for the purpose of its business, without which the business cannot be continued. Thus, Resolution Applicant prayed the Company to use the same brands / trademarks to continue its business. The waivers / exemptions are generally being granted by the Adjudicating Authority while approving the Resolution Plan in exercising its inherent powers. In this connection Learned Counsel for Resolution Applicant relied on the following decisions:- (1) Hon'ble NCLT Bench, Chandigarh dated 15.06.2018 in the matter of State Bank of India v MOR Farms Private Limited which approved waiver of un-crystallized tax /statutory dues for periods previous to approval of Resolution Plan that may arise in futu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Plan subject to the reliefs sought for in Clause 11.1., 11.2, 11.3, 11.4, 11.6, 11.7, 11.8, 11.10, 11.11, 11.12, 11.16, 11.20, 11.21, 11.23, 11.25, 11.26 11.27. The Counsel contended prayers in 11.13, 11.17, 11.18, 11.19, 11.22, 11.24, 11.28, 11.29, 11.30 are concerning waiver of the past dues of the Corporate Debtor which are being settled by Resolution Applicant under the Resolution Plan. The counsel contended Clause 11.14 and 11.15 contained prayers which are not crystallized till date. The counsel contended provisions of IBC shall have over riding effect over all existing laws which are in conflict with IBC, 2016 as was observed by Hon'ble Apex Court in Commissioner of Income Tax Vs Monnet Ispat Energy. Thus, the Learned Counsel for Resolution Applicant prayed the Tribunal to approve the Resolution Plan subject to grant of the reliefs prayed. 11. The Resolution Professional filed this Application under Section 30, 31 of the IBC for approval of the Resolution Plan submitted by SMAIT. The Resolution Plan shall confirm to the requirements stated in 30 (2) of the Code. The Resolution Applicant is competent to file the Resolution Plan. The Resolution Profession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an can be approved subject to the reliefs specifically claimed in Clause 11.11 to 11.16 of the Plan and 11.2 deals with passing of necessary orders / directions that Financial creditors Category-B lenders be authorized to deal with respective assets of Corporate Debtor over which they have exclusive charge including causing sale of the assets by Corporate Debtor and appropriate sale proceeds by Financial Creditors Category-B lenders as per Clause 2.2 of Resolution Plan. The plan can be approved by granting this relief. 13. The Resolution Applicant prayed exemption to pay stamp duty which may arise in implementation of the Plan including Stamp duty on transfer of immovable properties. It is open to the Resolution Applicant to approach the appropriate authority seeking exemption and that appropriate authority to consider the waiver in favour of Resolution Applicant as per law. 14. The reliefs sought in Clause 11.4 is to direct the Financial Creditors to withdraw all the suits or arbitration or other proceedings filed against Corporate Debtor for recovery of their money in view of approval of the Resolution Plan. This relief can also be granted in favour of Resolution Applicant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is therefore can be approved subject to above reliefs. 18. M/s Future Corporate Resources Private Limited (FCRPL) filed counter to the Application filed by the Resolution Professional for approval of the Resolution Plan. The averments in the counter are already stated. Interestingly, FCRPL is a member of CoC which voted in favour of the Resolution Plan. Having voted in favour of the Resolution Plan, FCRPL is now asking the Tribunal to delete Clause 11.28 from the Resolution Plan and related clauses with regard to waiver of guarantees and securities given by DCHL for the loan taken by subsidiary Company Aviotech Pvt Limited. It is not open to FCRPL to ask for deletion of the Clause 11.28 from the Resolution Plan because it has voted in favour of the Resolution Plan. Without going into the merits of the objections raised by FCRPL, the objection cannot be entertained on the simple ground, it has voted in favour of the Resolution Plan. Therefore, it is not open to FCRPL at this stage to direct the Resolution Applicant to delete Clause 11.28. Secondly, The Resolution Plan which is approved by members of CoC having voting share of 81.39% of which FCRPL is also one of the members of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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